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Philips Denies Blocking Exports by Chinese DVD Player Makers
Jan 21, 2005
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Royal Philips Electronics has denied media reports that it is seeking to block the exports of Chinese DVD player manufacturers that have not paid royalty fees to the Dutch firm.

Ruud Peters, CEO of Philips' Intellectual Property & Standards division, said Philips is seeking to share technologies with Chinese manufacturers to expand the market rather than suffocate the DVD player manufacturing business.

Media reports, first run in Taiwan, have been mounting over recent weeks that Philips asked customs agencies in the U.S. and Europe to ban imports of DVD players made by Chinese firms.

As a result, the shares of DVD makers on the Chinese mainland have dropped, the reports said.

The reports also said Philips has shifted all of its OEM orders from the Chinese mainland to Taiwan and South Korea, causing a large-scale shutdown of mainland manufacturers.

Mr. Peters said such reports are groundless, and "are misleading to the public and harming Philips' reputation on the Chinese mainland."

"We don't have a policy of blocking Chinese exports. That is not our goal," he told China Daily.

According to Mr. Peters, DVD makers on the mainland produced 40 million units in 2003, accounting for 75 percent of the global market.

Last year, this figure reached 135 million, making up 90 percent of the global output of 150 million units.

"The Chinese mainland's market share has been increasing, not decreasing," he said.

Philips outsourced 8 million units last year, compared to 3 million in 2003, to Chinese mainland OEM firms, the executive noted. "We have neither a policy nor the intention of removing DVD player production from the Chinese mainland," he said.

He added that Philips is committed to working with the Chinese Government which is aiming to establish a solid intellectual property (IP) system in the country.

Philips last year teamed up with three leading Chinese universities to establish IP academies to help China train IP experts and judges, which are said to be urgently needed across the country. Philips invested 1 million euros (approx. U.S. $1.3 million) in each academy.

Mr. Peters said the Dutch Government has pledged financial support to expand the scope of IP academies in China. "There is a big demand for experts and judges" capable of handling complicated IP issues, though IP awareness has improved significantly in China, he said.

IP registration and disputes have been on the rise in China in recent years. Although most provincial courts in China have set up IP sections, many judges have not yet had adequate legal training in the complex field, Boston Consulting Group said in a recent report. (XIC)

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