DVD ROYALTY DEADBEATS GET BOOT AT CHINA SHOW
The lack of patent licenses and failure to pay royalties on DVD players earned expulsions for 6 Chinese manufacturers from the country’s largest trade fair last week.
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The license enforcement action by patent owners mirrored a similar incident at Berlin’s Internationale Funkausstellung (IFA) show this fall, where the exhibits of several noncompliant manufacturers were raided and the nonlicensed goods was seized (CED Sept 3 p3). Nonlicensed DVD players were on display by 9 Chinese vendors at the 94th annual Chinese Export Commodities Fair in Guangzhou, which runs Oct. 15-30 and accounts for 25% of China’s yearly trade. Investigators from the 6C patent pool (Hitachi, IBM, JVC, Matsushita, Mitsubishi, Toshiba and Warner) visited the exhibits in an effort to sign the manufacturers to royalty-bearing patent licenses, Asian news reports said. When 6 of the companies declined to comply with the 6C’s requests, Guangzhou show officials ordered their exhibits closed and removed them from the show floor. Chinese brown goods and white goods powerhouse Haier was among those expelled, the reports said. The others weren’t identified, and independent confirmation from the 6C group and others wasn’t available at our Fri. deadline. It also wasn’t known whether the 3C patent pool of Philips, Pioneer and Sony were involved with any license enforcement action.
Exporters rang up $13 billion in contracts in the first 5- day phase of the Guangzhou show, 9.5% over the same phase of last fall’s session, show officials said. That tally far exceeded the $4.42 billion in orders booked at this spring’s edition of the show, which saw little turnout owing to the SARS epidemic in Asia at that time. Nearly 85,000 foreign buyers attended this fall’s first session, up 11% over last year. Electronics and appliances remained the big draw at Guangzhou, accounting for 56.3% of the transactions reported, show authorities said. Meanwhile, over the same 5 days, 78 complaints were filed with show authorities over intellectual property rights violations.
Licensing for 6C’s patents began in 1999, and the group said it now had more than 280 licensees worldwide. Vigorous efforts to recruit Chinese manufacturers began last year, in some cases with financial incentives toward future business that balanced retroactive claims. In June, 6C announced a maximum royalty of $8 on DVD players retroactive January 1, 2003. Previously, the royalty had been 4% of the net selling price or $4, whichever was greater. In announcing the change in June, 6C said licensees who sold higher end DVD players or combination DVD player products would benefit from the royalty modification.