The DVD Forum, representing owners of DVD related patents, is preparing to crack down on manufacturers who are not paying royalties. The industry group is aggressively seeking both payments and government assistance in preventing trade in unlicensed DVD players. Companies in China and Taiwan, however, believe the royalties, which can total to 10 percent of a player’s costs, are excessive.
China, a major supplier of DVD players, is threatening to create its own DVD standard, the Advanced Video Disk (AVD) spec, if DVD technology licensers do not offer more attractive terms. This would force DVD manufacturers to pay fees to the AVD group to sell into China. Some analysts, however, believe that AVD is merely a bargaining tactic, as it faces possibly insurmountable technical obstacles associated with engineering backward compatibility with existing DVD technologies.