Chinese companies sue patent-holders over DVD royalties

Two Chinese companies, Wuxi Multimedia and Orient Power (Wuxi) Technology, have filed a lawsuit against the 3C
Patent Group, saying it has violated U.S. antitrust laws. The 3C group is a consortium owned by Sony, Philips and Pioneer that manages DVD patent rights. At the crux of the case is a $20-per-unit patent fee, which manufacturers say unfairly impacts their ability to keep prices down for their DVD players. The $20 fee was hammered out several years ago, in order to stop sales of unlicensed Chinese DVD players. However, now that prices for players have plummeted, the fee accounts for as much as half of the manufacturers' wholesale costs. Of course, in many ways, the case is already moot, as manufacturers are already gearing up for the
high-definition market, and Chinese and Taiwanese companies continue to push home-grown formats such as EVD and FVD to avoid patent fees.