Newsletter
NEW CD-R LICENSE NEGOTIA-TIONS NOT IN BREACH OF FTL
After initial investigation of the licensing process in Taiwan of CD-R patents held by Philips, Sony and Taiyo Yuden, the Fair Trade Commission (FTC) stated that the three companies have ceased their former activities challenged by the FTC.
In response to strong representations made to the FTC by the DVD Club Taiwan and the Taiwan Electrical and Electronic Manufacturers Asso-ciation, who claimed that, after reopening nego-tiations, the three foreign licensors demanded excessive royalty payments, the FTC issued an interim opinion, stating that the three companies had ceased their previous actions challenged by the FTC as violating the Fair Trade Law (FTL), and that a new determination would be required to ascertain the individual market status of each licensor in the market for CD-R technology. The FTC could not determine whether the three companies' demands as to the level of royalties or as to other contractual conditions constitute abuse of dominant market position. The FTC had no specific evidence that any of the compa-nies violated the FTL. Further, after resumption of licensing negotiations, the question of whether contractual conditions or royalty levels are rea-sonable for new licensing agreements are com-mercial matters to be agreed between the parties. While contract negotiations between the parties were still in progress, the FTC would not inter-vene in such negotiations.