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Wednesday, October 29, 2003
ITC rules not to block imports of CD-R discs

The US International Trade Commission (ITC) has initially ruled that it will not enforce at present a request from Royal Philips Electronics to block imports of CD-R discs from Taiwan's makers and other suppliers, though it has found that those makers and suppliers do infringe on six registered patents of the Dutch electronics giant.

The ITC's initial determination appears to be a victory for Taiwan's CD-R disc suppliers, whose export sales have been battered after Philips filed a complaint with the ITC in mid-2002, accusing them of infringing on its patented technology.

Philips took the legal action against GigaStorage and Digital Storage Technology in June and then added Princo to the case in July.

The ITC's ruling does confirm the validity of the six patents claimed by Philips involving the manufacture of CD-R and CD-RW discs and allows Philips to demand Taiwanese makers to make royalty payments for the use of its patents.

Nevertheless, sources at Taiwan's CD-R disc makers said that the initial determination has profound implications for them, as it will help them boost sales to the US market before they reach an agreement on royalty payments with Philips.

The ruling might in effect force Philips to lower its request for the amount of royalty payments. It will also place Taiwan's makers of DVD-R discs in a stronger position when they meet with Philips in the next round of negotiations on the similar royalties on DVD-R and DVD+R discs, sources said.

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