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Thursday, April 11, 2002
Sony sues Apex for DVD patent infringement

Sony Corp said Wednesday it has filed a lawsuit against privately owned Californian firm Apex Digital Inc. for infringements of DVD player patents. The Japanese consumer electronics giant filed the case at the Southern New York district court on March 26 , claiming Apex imports and sells cheap DVD players into the U.S. without paying the required licensing fees to Sony.

Sony holds a joint DVD technology license with Philips Electronics Ltd. ( X.PHE) and Japan 's Pioneer Corp. (PIO or 6773), and has been asking Apex and other small sellers of DVD players to pay 3.5% of the wholesale price or a minimum of $5 per player.

"This is clearly an infringement of our patent rights," said Yoshikazu Ochiai, a spokesman at Sony.

"We have been trying to get Apex to agree to pay the fees for the last year or so, but we came to the conclusion in late March that our talks would not bear fruit."

Ochiai said Sony is still open to a private resolution of the matter and will withdraw the case if Apex agrees to pay the licensing fees.

And on April 5 , Apex posted a notice on its Web site, saying it had agreed to sign a licensing agreement with Sony, Pioneer and Philips.

But Wednesday morning in Tokyo , both Sony and Pioneer spokesmen said their legal departments haven't heard of a possible deal from group representative Philips.

Pioneer spokesman Kohei Iwamoto said, "this might be because they want to avoid enormous legal costs, which they might incur if they don't pay the licensing fees."

Apex Digital wasn't immediately available for comment Wednesday morning in Tokyo .

In the last six months of 2001, Apex's DVD players captured about 20% of the U.S. market in unit terms, according to research firm NPD Techworld. With some models retailing for under $100, Apex has overtaken Sony and Samsung Corp. ( Q.SSG) of South Korea to become the top seller in the U.S.

The Ontario -based firm assembles its DVD hardware and televisions in China , using chips and components from companies such as Japan 's Sanyo Electric Co . and, ironically, Sony.

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