The DVD6C Licensing Group announced that it has terminated the DVD6C Patent License Agreement with two Chinese companies – Chaoyue (Jiangsu) Digital and Shenzhen AKI Digital Electrical Appliance – effective as of 15 July and 12 August respectively.

Both companies failed to fulfill their material obligations of royalty reporting and/or royalty payment under the DVD6C Patent Licensing Agreement. They are therefore cautioned that "the sale, offering for sale, use, importation or other disposal of DVD products" of these companies may constitute infringement of patent rights in countries where essential patents of DVD6C members have been issued or registered.

The termination of Chaoyue (Jiangsu) Digital patent license agreement marks the first time the DVD 6C has revoked a license in China, according to sources in Taiwan's optical disc drive (ODD) manufacturing industry.

Makers of DVD players/recorders have closely watched the situation following the license cancellation, for they view it as a sign that the DVD6C is cracking down on manufacturers who use its patents without paying royalties. The incident, however, will have little impact on Taiwan-based ODD makers because most makers receive DVD licensing through joint ventures or licensing agreements with major DVD patent holders, the sources noted.

The DVD6C Licensing Group consisting of nine leading developers of DVD technology and formats – Hitachi, Matsushita, Mitsubishi, Samsung, Sanyo, Sharp, Toshiba, JVC and Warner Bros. Home Entertainment.

Story filed 21.08.07