A task force of local, state and federal agencies seized more than 20,000 CyberHome-brand DVD recorders that allegedly use Philips patents without a license.
CyberHome U.S.A. of Fremont, Calif., markets DVD players, DVD recorders, portable DVD players and a handful of LCD TVs. Its customers include Amazon, Best Buy, Circuit City, Fry's, Target and Wal-Mart.
The task force, whose lead agency is the FBI, obtained a search warrant to enter the warehouse as “part of an ongoing investigation into the illegal manufacture and sale of products bearing counterfeit trademarks,” the task force said. California law provides for imprisonment up to three years and fines up to $500,000 for the manufacture, possession, or sale of more than 1,000 items bearing a counterfeit mark, the task force said. Eight tractor-trailer loads of infringing DVD recorders were seized with an estimated retail value of more than $2 million.
The Santa Clara County district attorney's office called CyberHome “one of the world's largest manufacturers and importers of DVD devices.” The company's Web site said its products are also sold in Europe.
The task force, called REACT, was tipped off by Philips, said a spokesman for Philips Electronics North America in New York. “CyberHome has been using Philips DVD technology in its DVD players and recorders for a very long time now without paying royalties,” the spokesman said. “Their debts currently are a multimillion amount of dollars. At this moment, CyberHome is not licensed at all, so they infringe upon our patents. This is illegal, and it also creates unfair competition in the market, as many other companies are licensed. We always want to find solutions in a peaceful way, but if companies do not respect our [intellectual property], we are forced to take legal steps.”