Ritek's five-year contract with Philips for licensed use of CD-R patents expired a few months ago and the company agreed to join Veeza to continue licensing the patents, Ritek pointed out. However, optical discs makers in Taiwan had originally boycotted Veeza, so Ritek's sudden reversal may cause some discontent among its fellow makers. As Ritek is currently the second largest maker of optical discs in Taiwan, its action will bring pressure on other makers, Taiwanese industry sources indicated.
Under the terms of Veeza, licensees provide detailed information on all CD-R disc shipments, but Philips affirmed its obligation to comply with the non-disclosure clause specified in the licensing system in an effort to ease any worries licensees may have.
Concerning the decreased royalty fee for recordable DVD discs, existing licensees will be able to begin applying the discounts from the third quarter of 2006 until the second quarter of 2007 as long as they fulfill licensing contracts, Philips noted. After that, Philips plans to expand its Veeza system to recordable DVD discs.