"...As the global DVD market skyrockets, the DVD Forum will begin this year to aggressive enforce DVD licenses and collect DVD royalties, according to Koji Hase, chairman of the DVD Forum and vice president of Toshiba Corp., at the 2001 International Consumer Electronics Show this week. "It's time to start collecting money," Hase said, so that the owners of essential patents for the DVD standard can recoup their research and development investment.

Spelling out the DVD Forum's strict policing activities, Hase warned, "We're prepared to stop imports of unlicensed DVD players and bring lawsuits to those who are shipping DVD players without a licensing agreement." The move is already causing uproar among system OEMs in China and in Taiwan that have been producing DVD players without a license. At a time when DVD system manufacturers face tough price competition around the world, the DVD Forum's move will put manufacturers without DVD intellectual property (IP) at a disadvantage, and could deepen the disparity between the IP haves and have nots.

The overall royalties could be could be taxing for a DVD player manufacturer, reaching as high as 10 percent of a player's hardware cost, according to Hase. A manufacturer could owe royalty payments to two separate DVD patent pool organizations, and to MPEG LA, Dolby Laboratories, and a few other individual companies..."