The disagreeable negotiations between Taiwan's CD-R makers and Philips Electronics NV over the level of its patent fee charge are continuing, but so far the dispute has yet to be resolved, with Taiwan's CD-R companies claiming that Philips is charging too much for licensing its CD-R patents.
Philips has now responded by suspending the patent qualifications of all the local CD-R companies, with the exceptions of Acer Media Technology Inc. and Nan Ya Plastics Corp. Local CD-R companies said they were not surprised by this development, but also admitted they had yet to find a way to respond to Philips's decision.
After Philips struck Lead Data Inc. and Gigastorage Corp. off the list for licensing its CD-R patent, it also retracted on May 2 the license for using its CD-R patent from other small- and medium-sized CD-R companies in Taiwan. Even Prodisc Technology Inc., previously expected to escape unscathed, also faced the prospect of losing its license for producing CD-Rs. Acer Media and Nan Ya Plastics, whose shipments have been comparatively small so far, have been allowed to keep their licenses.
The action by Philips did not surprise local companies, as they have long refused to pay the higher patent fee demanded by the Dutch giant. Philips recently notified Taiwan's CD-R companies that it expected payment by the end of April. Local CD-R companies ignored the demand, vowing to continue the struggle for what they feel is a more reasonable patent charge.
Philips has also refused to renew the patent license of CMC Magnetic Corp., even though the pair were able to resolve the fee dispute and have signed a draft contract, because CMC did not pay on schedule the fee owed since last year.
Separately, the European Union has announced that it will extend its anti-dumping investigation to two more CD-R companies in Taiwan. Previously, the EU revealed that it would investigate Ritek Corp., CMC Magnetic Corp. and Princo Corp. in a CD-R anti-dumping probe. As a result, the EU will name five local CD-R makers in total as samples for the probe.
Asked why the probe was being extended in this way, an EU spokesman noted that both companies are affiliates of Ritek and Hung Jen Group. Hung Jen Group is sponsored by Winston Wang, a son of Taiwan's Formosa Plastics Group Chairman Wang Yung-ching. He also noted that both companies have placed their shipment focus on the European market.