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Toshiba Sues over DVD Licenses

April 16, 2007 | Author: Ibex Marketing

The battle rages between Blu-ray and HD DVD to become the high-definition DVD format. One question I often hear is “Why can’t they just agree on a compromise format?” Aside from the technical issues that account for significant physical differences between the two formats, the best answer can be found by following the famous advice, “follow the money!”

The two different standards are based on different technology, and lots of it. The ownership of the intellectual property behind all this technology rests in the hands of a variety of companies, large and small. And there is lots of money to be made in licensing the patents for this technology. Oceans of money, as a matter of fact.

One needs look no further than the current red laser DVD technology to see how important all these licensing fees can be. The standard DVD technology is very mature and stable, and you can buy a DVD player for $60 or less. Earlier this month, Toshiba petitioned the International Trade Commission to block the import of DVD players into the United States from 17 manufacturers and importers. Most of the companies named are based in Hong Kong and China, and Toshiba claims that these companies are selling DVD products without paying the licensing fees that are owed to Toshiba. The company is also suing in US federal court, seeking damages from the 17 companies.

Making money on licences for patents can be a big source of revenue, even for a large company such as Toshiba. It’s no surprise, then, that neither side of the high-definition battle is ready to walk away from those potential earnings, just to settle on a single blue laser DVD format.