Chinese manufacturers of DVD players have started hinting that they might now be more willing to enter contracts with the patent management group, 6C.
The reason behind the Chinese manufacturers' more flexible attitude -- after negotiations have been at a deadlock for some time -- is that 6C has proposed a new framework that would give the China-based firms preferential treatment. 6C announced May 10 that patent fees could be waived, for a limited time period, for DVD players made in Chinese factories as long as they are then marketed to Chinese consumers.
6C also says that as soon as it finalizes licensing agreements with particular Chinese firms, it will publicize those companies' names on its official Web site.
Normally, companies that want to manufacture DVD players have to obtain patent licenses and then also pay a patent royalty fee for each player they produce. However, in China many patent applications are still under review , and the licensing/royalty system has never functioned properly. Having said that, 6C has put in place a common licensing program that works on a global scale and all along has been calling on the Chinese makers to sign contracts and start paying royalties for the patented technologies they use in their products.
Until now, most Chinese manufacturers have refused to pay, citing as their reason the fact that licensing fees are set too high.
In the United States in particular, low-priced Chinese DVD players have been inundating the market since around 2001. As a result, many Japanese DVD player makers have been seeing their market share slowly eaten away.