When you are using a technology developed by another company in your devices you have to buy a license to use this technology. This to cover the development costs of the technology and to make sure you are not the only one who makes money from a technology developed by someone else.
Chinese DVD player manufacturers till now thought different about this and some of them never paid any license fees to Philips/Sony for DVD licensing. Philips however took action and the Chinese producers will now also pay the required license fees.
Under the terms of the agreements to be signed the Chinese manufacturers will pay the standard royalty rate of US$5.00 per DVD player and they will also immediately be eligible to participate in a standard world wide DVD Player Compliance Reward Program under which compliant licensees may apply a royalty rate of US$3.50 per DVD player for sales as from July 1, 2002. As an additional benefit to licensees who manufacture and sell DVD players in China, Philips will not require them to pay royalties on DVD Players manufactured and sold for end use in China until December 31, 2002. This benefit will apply to all manufacturers who have successfully applied for the DVD player license agreement within the coming weeks. |
Source: Philips
