According to DigiTimes, Wal-Mart has shifted its OEM orders for movie DVD discs from existing partners in China to a few second-tier manufacturers of pre-recorded optical discs in Taiwan... However, China-based OEM makers for Wal-Mart are not willing to pay royalty fees to Philips, which is the patent owner, the makers pointed out. The China government wants to negotiate royalty payment with Philips on behalf of China-based makers rather than let Philips talk directly with individual makers.

Since the makers were being protected by the government, Philips instead exerted pressure on Wal-Mart to protect its patent rights, the makers noted.