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Monday, May 17, 2004
Philips and Taiwan makers negotiate new royalty charges for CD-R discs

Royal Philips Electronics and major optical disc manufacturers in Taiwan are negotiating new royalty charges for using CD-R patents owned by Philips, with a consensus not being expected till the end of June at the earliest, according to

Philips currently imposes royalty charges of US$0.045 per CD-R disc and US$0.06 per DVD+R disc on Taiwanese licensees. As the OEM price for CD-Rs has dropped to US$0.15-0.2 per disc, royalty payments have risen to 22.5%-30% of revenues.

In addition to the drop in CD-R pricing, other factors lead Taiwanese makers to expect Philips to lower its royalty charges. On March 11, a US International Trade Commission’s (ITC) final judgment ruled against Philips in a case where the company accused two Taiwanese optical disc makers of patent infringement. Also, Japanese companies including Sony, Taiyo Yuden and others have offered lower royalty charges for Taiwanese makers.

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