DVD FORUM NEWS


DVD Forum turns aggressive on licenses, royalties
As the global DVD market skyrockets, the DVD Forum will begin this year to aggressively enforce DVD licenses and collect DVD royalties, according to Koji Hase, chairman of the DVD Forum and vice president of Toshiba Corp., at the 2001 International Consumer Electronics Show.
"It’s time to start collecting money," Hase said, so that the owners of essential patents for the DVD standard can recoup their research and development investment.
Spelling out the DVD Forum’s strict policing activities, Hase warned, "We’re prepared to stop imports of unlicensed DVD players and bring lawsuits to those who are shipping DVD players without a licensing agreement."
At a time when DVD system manufacturers face tough price competition around the world, the DVD Forum’s move will put manufacturers without DVD intellectual property (IP) at a disadvantage, and could deepen the disparity between the IP haves and have nots.
The overall royalties could be taxing for a DVD player manufacturer, reaching as high as 10 percent of a player’s hardware cost, according to Hase. A manufacturer could owe royalty payments to two separate DVD patent pool orga

Since the DVD Forum failed to form a one-stop shop for DVD IP licensing, two competing patent pooling organizations are independently carrying out licensing programs and collecting royalties.
One group called 6C is composed of six companies—Toshiba Corp., Matsushita Electric Industrial Co. Ltd., Victor Co. of Japan (JVC), Mitsubishi Electric Corp., Hitachi Ltd and Time Warner Inc.—and alone is asking for 4 percent royalties per a hardware unit, according to Hase. A separate DVD patent pool, called 3C—comprised of Royal Philips Electronics, Sony Corp. and Pioneer Corp.—is demanding 3.5 percent royalties per a hardware unit. In addition, MPEG LA is seeking royalties from manufacturers using patents related to MPEG-2 video, while Dolby is after those who implement Dolby Digital in their DVD players. Both Thomson and DiscoVision own patents involving optical disc technology, and each is looking to collect separate royalties. There is also a licensing fee for a copy protection system used within a DVD player.
Royalties have begun to flow in from many companies in Japan, the United States and Europe, Hase said. "We will be very adamant about going after those who do not have a DVD license or those who haven’t paid royalties. Because otherwise it would be hugely unfair to those who already do."
The DVD Forum will also be rolling out much tougher verification activities for DVD software and hardware, Hase said. Rather than waiting for vendors to bring their products to the DVD Forum for verification, "We are now going out and purchasing players and discs on our own from all over the world, in order to conduct verification tests," he said. The goal is to maintain better compatibility among DVD products that bear a DVD logo, and to reduce the number of poor quality products in the market, Hase said. "We are prepared to evoke a DVD license from them, if necessary."
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DVD Format/Logo Licensing Unit Opens Website
The DVD Format/Logo Licensing Corporation (DVD FLLC), the official licensor for rights to use DVD formats and logos, has opened its own website http://www.dvdfllc.co.jp.
DVD FLLC is a joint venture of the ten companies that originated the DVD formats. In addition to DVD format and logo licensing, the group handles production, maintenance, issuance of DVD Format Books, trademark registration and maintenance for DVD Logos, verification related activities and polices pirate manufacturers, non-compliant products and incorrect usage of DVD Logos.

Similarly Video Sound avoids the DD5.1 argument by labelling their DVD AC3 and not Dolby Digital 5.1 – when its a case of a pseudo mono to 5.1 mix.