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Still no decision on royalties for DVD makers

6 companies demanded $20 per player sold, talks continue

SHANGHAI — Negotiations between foreign DVD makers and their domestic counterparts over patent royalties on borrowed technology continue.

An agreement may be reached as early as the end of this month.

In early April, Variety reported that the 100 or so domestic manufacturers represented by the Chinese Acoustic Equipment Assn. had agreed in principle to the idea of royalties.

However, Hitachi, Panasonic, Mitsubishi, Time Warner, Toshiba and JVC — collectively known as the 6C group — were demanding $20 per player sold, a figure that the domestics rejected. Despite a threat from 6C companies to start filing lawsuits after March 31 if payments were not made, talks continued. A framework agreement was reached last month, though the exact royalty figure remains open to debate.

The latest proposal is that 6C companies receive 4% of the unit price. The final numbers may differentiate between players sold on the mainland and those pushed into the international market, where Chinese manufacturers are priced significantly lower than their foreign counterparts.

Around 2,000 patents apply to DVD players, most of them owned by foreign developers. 6C companies have already started signing deals with local manufacturers on the basis of the April agreement, according to the China Daily.