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Thursday, 7 March, 2002, 18:18 GMT
China in DVD royalty row
DVD image inside a vehicle
DVD technology has made huge progress in recent years
Chinese officials say Britain and Germany have seized batches of digital versatile disc players because of a row over copyright.

Some countries are trying to persuade China to force its manufacturers to pay a royalty for every DVD player produced.

Two international electronic companies claim they hold the patent to at least some of the technology involved in DVD players, and have demanded compensation.

The row has exploded because of a sudden growth in cheap exports of DVDs from China.

Trade obligations

Shanghai correspondent Duncan Hewitt told the BBC's World Business Report that, with two groups demanding royalty payments, the fuss threatens to add $10 to the price of a China-made machine.

Companies such as Philips, Hitachi, Toshiba and Sony say the Chinese have simply taken their technology and are using it without permission.

With China now a member of the World Trade Organisation (WTO), it should abide by international patent rights, they say.

But there has been a argument from some of the Chinese firms that the disputed patents not been formally registered in China.

Boycott threat

"It does seem that the Chinese companies realise they will have to pay something," Mr Hewitt said.

But there has been a dispute about how much they should pay, and some firms have seemed determined to hold out for as long as possible before making payments.

Some European companies in China have urged against the start of a trade war

They have called for the matter to be resolved through talks, but their lawyers have in the past threatened the Chinese with a boycott of DVD products.

"There is a lot of money involved and the Europeans and Japanese are seeing their market share eroded by China," Mr Hewitt added.

The BBC's Duncan Hewitt
"The Europeans and Japanese are seeing their market share eroded by China."
See also:

21 Feb 02 | New Media
Next generation DVD born
10 Feb 02 | Business
Global weakness hits China's exports
07 Feb 02 | Asia-Pacific
China admits jobs crisis
04 Jan 02 | New Media
DVD sales double in 2001
10 Dec 01 | Business
Demand for DVDs rockets
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