"With or without the DVD royalty payment issue, Chinese companies are a threat to us in terms of their cost-competitiveness," said Yoshikazu Ochiai, a Sony spokesman in Tokyo. "Rather than getting involved in a price war, we will pursue high value-added products that other makers and other countries can't afford."
The Japanese companies have made some headway on the legal front. TCL Holdings Co said in mid-April it was willing to settle a Sony lawsuit by paying part of the fees. Apex Digital Inc, which sells Sichuan Changhong players in the US, also settled a Sony suit earlier this year.
China's Xinhua news agency reported today that more than 100 Chinese DVD makers agreed to pay patent fees to use the technology. The state-run news agency didn't say how what that fee would be.
"We do understand that these companies want to protect their rights, since they were the ones that first developed the technology," said Li Dongsheng, president of TCL, whose stock was the best performing on the Hang Seng 100 Index last month. "But too much protection inhibits innovation and competition, which is not good for the industry."
Still, such arguments may prove moot. Some 19 Taiwanese DVD makers are in talks with their Chinese counterparts to create a new DVD standard that would allow them to skirt patent fees, the Digitimes newspaper reported last month.
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