On May 10, the DVD6C Licensing Agency, representing six leading DVD technology and format developers, announced new incentives for manufacturers in China to obtain patent licensing. Companies accepting the offer before July 1 will be exempt from royalty payments on DVD players they manufacture in China and sell for the use of end-users in China through December 31. By China, the agreement does not include Hong Kong, Macao or Taiwan. However, DVD players manufactured in China and then exported will still be subject to the DVD6C Licensing Agency’s standard royalties of the greater of 4% of the net sales price or US$4 per player.

The incentive program will extend to current licensees as well.

The six group members are Hitachi, Matsushita Electric Industrial, Mitsubishi Electric, AOL Time Warner, Toshiba and Victor Company of Japan (JVC).

A Chinese-language media report said that the terms had been negotiated with the China Audio Industry Association (CAIA), which represents over 50 DVD player manufacturers in China, giving an indication that member companies might sign on to the agreement.

However, according to the report, whether fees should be paid retroactively and the amount of those fees remain unresolved...