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Wednesday, February 25, 2004
Sony agrees with Taiwanese DVD makers on royalty charges

Sony has signed agreements with several major Taiwanese producers of optical discs fixing royalty charges of 1.5%-3.5% for DVD+R discs, according to Taiwanese

The royalty charges depend on each maker’s production capacity for DVD+R discs and DVD+Rs and favor large producers.

In addition to the basic charge, Sony is offering flexible payment terms based on the financial strength of its customers.

The Taiwanese makers already signing with Sony include the top three, CMC Magnetics, Ritek, Prodisc Technology, and three second-tier ones, Lead Data, Gigastorage, and Princo.

Taiwanese makers are attracted by Sony’s offer because they think the rate charged by Philips for its DVD+R patent, about US$0.06 per disc, is too high. The US International Trade Commission (ITC) will make its final judgment on Philips’ suit against Gigastorage and Princo regarding infringement on its six CD-R/RW patents at the end of this month. The ITC’s initial judgment, made in mid-December 2003, was favorable to the two accused Taiwanese companies, and this is very likely to remain unchanged at the ITC’s financial decision, other Taiwanese makers pointed out. Taiwanese makers are hoping that Philips will soften its stance over the DVD-R royalty charge as the situation unfolds.

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