Ritek gets out of CD-R licensing pickle


— 9:39 AM on September 26, 2006

Word got out yesterday that Philips had pulled CD-R patent licenses from Ritek and three other Taiwanese optical media manufacturers. Philips has now announced that Ritek is the first Taiwanese disc maker to have adopted its new "Veeza" licensing scheme for CD-R disc patents. Veeza is a new licensing model under which individual disc shipments are licensed and bear special logos and serial numbers to allow distributors to verify their authenticity. Traditional licensing schemes grant licenses to actual disc manufacturers, but Philips claims those schemes make it difficult for retailers and distributors to ensure shipments are licensed.

Ritek's adoption of the Veeza scheme will allow it to keep exporting CD-Rs to the U.S. and Europe. However, the other three manufacturers that had their licenses pulled—CMC, Prodisc, and Lead Data—have yet to take action. Since Ritek is reportedly Taiwan's second-biggest optical disc manufacturer, DigiTimes' industry sources reckon its move will put pressure on competitors to follow suit.

Aside from the CD-R patent controversy, Philips has also announced that it will cut royalties for recordable DVDs by 41.7%, bringing the fee for each DVD from $0.06 to $0.035. The cut will be in effect from next month until the second quarter of next year, after which Philips intends to carry its Veeza scheme over to recordable DVDs.

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