Philips revokes CD-R patent license for CMC and Ritek

September 25, 2006

The dispute between Philips and Taiwan media manufacturers, for non-payment of royalties on CD media, just got kicked up a notch. Philips is upset, as they are not receiving royalties on their patent. The media manufacturers are upset, as they feel the royalties are too high. You can check out the full report by visiting DigiTimes.

Royal Philips Electronics has revoked CD-R disc patent licenses for CMC Magnetics and Ritek, the top two producers of optical discs in Taiwan, as well as Prodisc Technology and Lead Data, two second-tier makers, according to a list of CD-R licensees published on Philips Intellectual Property & Standards' (PIPS') global website.

Philips' withdrawal of CD-R licensing was due to the Taiwan-based makers, except for Ritek, violating existing licensing contracts, industry sources in Taiwan cited Philips as saying. Ritek lost licensing because its contract with Philips expired in May of this year, the sources noted.

Philips has been pushing for CD-R disc makers to adopt its new Veeza licensing scheme. As no Taiwan-based makers have accepted Veeza so far, the revoking of licenses is interpreted as Philips applying pressure on CD-R disc makers in Taiwan to sign up for Veeza, the sources pointed out.

Prodisc confirmed it received notification of license revocation from Philips late last month. Since the revocation of patent licenses is expected to prevent exports of CD-R discs to Europe and the US, CMC, Ritek, Prodisc and Lead Data all indicated they will soon meet to discuss how to handle the situation.