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TV Makers to Fight Royalties
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Chinese TV makers are calling for a united voice in their royalty negotiations with international patent holders for TV sets to be sold in the United States.

Shen Jian, a spokesman for China's second-largest TV maker Skyworth, said yesterday that patent holders with the US standard of Advanced Television System Committee (ATSC) asked for more than US$20 in royalties on each TV set. Chinese TV producers say that such high royalties would make it impossible for them to break even.

The US Government requires all TV sets and tuning devices sold in its market to include an ATSC tuner. The requirement will go into effect from March, 2007, in order to provide time for the industry to adjust before the formal closure of analogue programmes in February, 2009.

As the world's largest TV producer exporting about 50 million sets a year, China might suffer if the royalty claims are too high. The United States and Europe are two of its major export markets.

"If the patent holders ask for US$23 per unit, that could be disastrous for everybody," Shen said. An executive with TCL, the third-largest TV producer in terms of sales, said the impact should not be very serious, but that would not come without hard-fought bargains.

According to the 21st Business Herald newspaper, the State Intellectual Property Office (SIPO) has a list of digital TV set royalty claims, which amounts to US$23 per unit almost three times more than the previous estimate.

It said the French firm Thomson and Japanese giant Sony are two major patent holders antagonizing the sharp increase in royalties.

A SIPO official, who declined to be named, said she had no knowledge of the royalty charge list. Thomson was not immediately available to comment.

Skyworth President Zhang Xuebin said earlier that US$10 might be a reasonable price.

Bao Ran, editor of the Consumer Electronics World magazine and a digital TV expert, said the charges from the ATSC standard are too high. The European DVB-T standard charges less than US$1 per unit.

Lin Yuanfang, vice-president of the China Video Industry Association, which groups all major TV makers in China, said in an earlier interview that 13 leading TV makers were discussing forming a joint venture, one primary function of which would be royalty negotiations.

Last year, China produced half of the world's TV sets, with Shenzhen as the nation's biggest TV manufacturing base.

(China Daily December 27, 2006)

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