Tuesday, January 25, 2005

CHINESE DVD MANUFACTURERS SUE 3C PATENT GROUP: Two Chinese-based DVD manufacturers, Wuxi Multimedia Ltd. and Orient Power (Wuxi) Technology Ltd., have filed a lawsuit against the 3C Patent Group in the United States, alleging that it violated US laws, leading to unfair competition.

The 3C group is a consortium owned by Sony, Philips and Pioneer that manages DVD patent rights. Patent fees of around US$20 per unit are currently levied on manufacturers of Chinese DVD players, accounting for some 20 to 30 per cent of their production costs. However, US manufacturers' patent fees are much lower, only 3 to 5 per cent of their production costs.

The plaintiffs claim that the International Trade Commission ruled in March last year that the patent pool arrangement of Philips and Sony violated several provisions of the Sherman Act. The arrangement is virtually identical to the 3C patent pool.

The high patent fees have hit Chinese DVD manufacturers hard, with exports of Chinese DVD players falling sharply last year.

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