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Thursday, October 10, 2002
Sony, Pioneer resolve DVD patent dispute in China

Sony Corp. (SNE or 6758), Pioneer Corp. (PIO or 6773) and the Netherlands' Philips Electronics N.V. have agreed with a Chinese industry group to resolve their patent dispute on DVD players by receiving royalties from related Chinese firms, Kyodo News reported, citing Japanese company officials.

Given the accord, Philips will negotiate in place of Sony and Pioneer with some 100 Chinese companies individually to sign patent contracts and collect royalties as soon as possible, the officials said, according to the report.

Earlier this week, sources close to the case said about 50 Chinese companies have begun paying a total of Y1.5 billion for DVD players to five Japanese firms - Toshiba Corp. (J.TOS or 6502), Hitachi Ltd. (HIT or 6501), Victor Co. of Japan (J.VIC or 6792), Mitsubishi Electric Corp. (J.MBE or 6503) and Matsushita Electric Industrial Co. (MC or 6752)) - and two U.S. firms, AOL Time-Warner Inc. (NYSE:AOL - News) and International Business Machines Corp. (NYSE:IBM - News) .

The payment apparently represents a change in Beijing's trade policy following its entry into the World Trade Organization late last year.

The agreement by Sony, Pioneer and Philips calls for Chinese firms to pay $5 per DVD player for export products for the time being, the officials said.

The three concerns will continue to seek royalty payments for DVD players shipped in China, they said.

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