Philips insists that the DVD patent fee is reasona

2022-10-22
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Philips insists that the collection of DVD patent fees is reasonable

lubid said that the $3.5 patent fee is a relatively reasonable price, and Philips has no plan to reduce the patent fee in the near future. Previously, the reason for reducing $5 to $3.50 was to encourage manufacturers' support for the development of the DVD market

Philips couldn't sit still. As soon as Anton Handal, an American lawyer, left, ruudpeters hurried to Beijing

the two Americans appeared in Beijing the same week. Although they talked about the same thing, their positions were different: Anton Handel represented the plaintiff's Chinese DVD enterprise, while lubid was the executive vice president and CEO of Philips' intellectual property and Standards Department

for lubid, the sudden counterattack of the always weak Chinese DVD enterprises surprised him: This is the first class action lawsuit he has encountered since Philips' patent authorization

Philips' challenge

Philips' strong position in the field of global intellectual property is being challenged

Philips is undoubtedly a giant in patents and standards: it has more than 20000 patents, has formed multiple patent pools in different industries, has more than 500 employees in intellectual property and standards, has branches in many countries in the world, and has offices in Shanghai, Beijing, Shenzhen and Hong Kong, China

"we are the Department of Philips' sales technology and the guarantee to keep the company dynamic." Lubid commented on the importance of this department to Philips

however, the two lawsuits may change lubid's optimistic view

the first time was on June 24, 2002, Philips requested the United States International Trade Commission (ITC) to investigate the infringement of six patents by 19 CD-R and CD-RW manufacturers. Philips asked ITC to issue a permanent prohibition order to prevent the products of these manufacturers from being sold to the United States. After nearly 14 months of review by ITC, a preliminary judgment was made on October 24, 2003: it was found that Philips' claim for authorization was unreasonable, and that Philips' authorization to wait for employment constituted an abuse of patent rights in U.S. law and could not exercise relevant rights

although this lawsuit has not yet waited for the final judgment, it has caused a great blow to Philips' intellectual property policy - some enterprises have come forward to openly oppose Philips' authority

but lubid doesn't think so: it's inaccurate to say that Philips lost the case. Because ITC's preliminary judgment has three conclusions: first, it recognizes that Philips' patent is valid; Second, Philips' patents have been infringed; Third, Philips enforced the intellectual property procedures

"we do not agree with ITC's ruling and have appealed." Although lubid believes that the preliminary judgment of this lawsuit is unfair. However, it cannot be concealed that the intellectual property policy that Philips has always followed is being challenged

it is this case that led to the class action of Wuxi multimedia (Hong Kong) Co., Ltd. and Dongqiang (Wuxi) Digital Technology Co., Ltd. against Philips

"ITC case will be our very important basis." Handel believes that the litigation of Chinese DVD enterprises will become the most important intellectual property case in the 21st century, which may change the mode of patent authorization and enable enterprises to compete freely

3.5 USD dispute

Philips levied a patent fee of $3.5 per DVD player, which is the focus of the dispute in this case

in this regard, lubid believes that Philips charges a patent fee of $3.50 per DVD player, which is calculated on the basis of Philips' R & D investment. It is an encouragement for technology research and development, and there is nothing inappropriate

"according to international practice, it is appropriate for patent fees to account for 1% to 5% of the selling price," Dr. Wei Yanliang, research center of the State Intellectual Property Office, told, "charging a fixed amount is also controversial." Wei Yanliang believes that the price of DVDs has fallen so fast that the patent fee paid by each DVD, including 4C, has reached more than 15%, and the hegemony of multinational enterprises in intellectual property rights is extremely unreasonable

settle down Handel told us that $3.50 is just a figure we all know. In fact, there are many hidden clauses in the contract signed with the enterprise, including requiring the enterprise to pay the patent fee on time and having the right to review the sales data of the enterprise

"China's DVD industry is on the verge of collapse." Wei Yanliang believes. DVD enterprises have been transformed one after another: Xinke's main business now is LCD TV and GPS positioning system. Wanlida will focus on the field of small household appliances and build electric bicycles step by step. The next step of SARFT is to focus on vehicle DVD. Amoi has made achievements in LCD TV and

"these large enterprises will naturally have a stronger ability to resist the storm. Many small and medium-sized enterprises do not have such a good fate, and the only way waiting for them is to close down."

however, lubid does not believe that patent fees will lead to the survival crisis of DVD enterprises. He said that the sharp decline in profits and the collapse of enterprises in the DVD player industry were caused by vicious competition. Once Philips cancels the patent fee today, the price of DVD player will come down within a week

lubid said that for many years, Philips has adopted the method of charging a fixed amount of patent fees. There is only one exception: at the beginning, cdaudio charged a patent fee of 2% of the selling price, but due to the cumbersome accounting, it was only implemented for a short time

lubid believes that it is too troublesome to charge the patent fee by percentage, which is sometimes difficult to operate. If you charge by percentage, the different prices of each model must be tracked and recorded, which brings inconvenience to the management of the manufacturer, and it is also difficult for Philips to more accurately locate children in the data with limited GPS. The more complicated problem is that if the products sold are bundled products such as home theater, CD, DVD, etc., they cannot be separated out and the price can be calculated separately. It is simply unclear what price should be charged

lubid suggested that DVD enterprises should include the patent fee into the fixed cost and calculate it as the R & D expenditure reduced by using mature technology

as for whether Philips will reduce the patent licensing fee in the near future, lubid said that the $3.50 patent fee is a relatively reasonable price, and Philips has no plan to reduce the patent fee in the near future. Previously, the reason for reducing $5 to $3.50 was to encourage manufacturers to support the development of the DVD market

customs is not the source of all data

although lubid has spent a lot of time on "fighting the fire", Philips is still facing an embarrassing accountability situation

on the one hand, many Chinese DVD enterprises authorized by patents are in danger of transformation or even bankruptcy; On the other hand, many enterprises cannot obtain the patent authorization of Philips and cannot sell their DVD products abroad

Wuxi multimedia, the plaintiff, is one of the enterprises that has not been authorized by the patent. Settle down Handel told Wuxi multimedia that it took Philips to court because it repeatedly applied for patent authorization but was unreasonably refused

"there are not a few such enterprises." Wei Yanliang told. When applying for patent authorization from Philips, enterprises are often required to provide previous sales data, but Philips does not agree with the data provided by enterprises, "even the customs data can not be recognized by Philips."

"this is unfair competition." Anton Handel bluntly said that according to relevant U.S. laws, Philips must treat all enterprises applying to it fairly and cannot refuse without reason

in this regard, lubid said: "Philips is fair to any enterprise, only requiring enterprises to report sales data, but many enterprises are unwilling to have their data audited by a third-party auditor, so they will not be authorized by us."

"the data provided by the customs may not meet the requirements." Lubid believes that the customs can be used as the most basic data source, but many times the data of European and American customs and the data provided by Chinese customs are "inconsistent, even very different"

lubid believes that there is another reason why the customs cannot be used as the third-party audit data, that is, the organizational structure of Chinese enterprises is complex, and they are registered in different places with different names. This situation "the customs simply cannot distinguish"

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