TOKYO — Six of the 10 companies that developed digital videodisc technology have reached an agreement on a joint licensing program for the technology.
Announced Monday, the agreement highlights the brewing feud among the 10 companies, known as the DVD Forum, that developed DVD format technology.
The six companies that agreed on the patent licensing deal are Hitachi, Matsushita Electric Industrial Co., Mitsubishi Electric Corp., Time Warner Corp., Toshiba Corp. and Victor Co. of Japan.
Under the agreement, the companies authorized Toshiba to execute the licensing program for a package of essential patents for DVD-video and DVD-ROM (read only memory). The agreement is aimed at getting DVD products to market as quickly as possible on a worldwide basis.
Licenses will be available with royalties of 4% for DVD-video players. DVD-ROM drives and DVD decoders will be available at a minimum royalty of $4, and 7.5¢ for DVDs, the companies said in a joint statement.
The six companies still are under negotiations with Sony Corp. and Philips, both DVD Forum members, about joining the patent pool, the statement said. The four forum members are not taking part in the patent licensing program are Philips Electronics, Sony, Pioneer Electronic Corp. and Thomson SA.
“We would like to have Sony, Philips and Pioneer on board with us on the joint patent licensing program,” a Toshiba spokeswoman said. “This will ease concerns among consumers about purchasing DVD products.”
Sony, Philips, Hewlett-Packard and Pioneer are backing some competing formats not compatible with the formats agreed upon by the DVD Forum in April. They also said they agreed among themselves in April on a licensing program.
DVDs are being billed as replacements for videocassettes, CDs and CD-ROMs because they offer much greater storage capacity. DVDs also promise to be a major consumer item for electronics companies. Japanese industry estimates say that by 2000 the market for DVD products should be about $25.6 billion, with rewritable DVDs accounting for 20% to 30% of the total.