Philips recently started warning unlicensed disc makers in Taiwan to protect its DVD+R patent rights. The company also notified customs agencies and distributors in Europe that they should block import from Taiwan makers who violate Philips their patents.
Taiwan's first tier producers of optical discs like CMC Magnetics, Ritek and Prodisc Technology are licensed to use Philips DVD+R technology, but second-tier and smaller producers are not licensed.
As Philips’ DVD+R patents also cover CD-R technology, there is some ambiguity about the DVD+R royalty claim. This is why disc makers are unwilling to pay the royalty, unlicensed Taiwan users explained.
Although Philips has not yet taken legal proceedings, Taiwan optical disc makers that have received a warning from the company are watching to see how the situation develops.
In a related development, Philips lost a CD-R/RW patent suit in the US in March of this year against Taiwan makers, which means the company may have difficulty trying to claim royalty payments for its CD-R/RW patents.