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DVD6C Agency Warns Dealers On Licensing

The DVD6C Licensing Agency sent letters via overnight mail earlier this month to retailers nationwide reminding them that if they are selling unlicensed DVD-Video players, DVD-ROM drives, DVD discs or DVD decoders, they “may infringe patents licensed” through the Agency.

The letter, dated May 9 and obtained by TWICE, was sent by Masahisa Saito, manager and exclusive regional agent for the DVD 6C Licensing Agency. The Agency represents the six members of the DVD6C patent pool: AOL Time Warner, Hitachi, Matsushita Electric Industrial, Mitsubishi Electric, Toshiba and Victor Company of Japan.

The letter urges retailers to check the enclosed list of licensees to make sure that their vendors are on the list. If not, the letter states, “please ask your vendor to become licensed. Please be advised that if you are selling unlicensed DVD products, you are infringing the patents of the DVD6C companies.”

Saito went further in a telephone interview with TWICE stating that “manufacturers who infringe on the patents are subject to penalty, but retailers who knowingly sell these products may also be liable under the law.”

Industry sources are speculating that since licensed manufacturers are selling DVD components to unlicensed manufacturers based in China who refuse to pay the fees, this is an attempt by the DVD6C companies to convince the vendors’ retailers to have them sign up.

Separately the DVD6C group issued a statement on May 10 that it is “providing new incentives” for companies that manufacture in China and sell DVD-Video players in China to become licensed on or before June 30.

The release states that the standard royalty for DVD-Video players is 4 percent of the net selling price of the player, or $4 per player, whichever is greater. Under the new program, for Chinese manufacturers selling DVD-Video players in China who sign up, will be exempted from royalty payments on those goods through December 31, 2002.

DVD-Video players manufactured by licensed vendors in China and exported directly or indirectly from China “shall be subject to the standard royalty rate” of either 4 percent of the net selling price or $4 per player.