Costa Mesa’s Discovision Says N.V. Philips to Pay ‘Significant Sum’ in Patent Dispute
Discovision Associates of Costa Mesa claimed victory Tuesday in a 3-year-old patent dispute with Dutch electronics giant N.V. Philips involving technology used in popular compact disc players and other optical storage products.
Discovision said Philips has agreed to pay a “significant” sum to license technology patented by the Costa Mesa firm, which is a joint venture of IBM Corp. and MCA Inc. Discovision President James N. Fiedler would not disclose the amount paid by Philips.
“It’s a major announcement for our company,” Fiedler said. “In our view, they (Philips) have been infringing our patents. Now they’ve agreed to take a license.”
“Philips is one of the biggest and most important players in the optical storage market,” said Les Cowan, editor of Optical Memory News, a San Francisco newsletter. “For (Discovision) to reach this agreement with Philips is significant.”
Resisted Claims
Beginning in 1985, Philips resisted Discovision’s claims that Philips’ products were infringing its patents. Although it protested Philips’ use of the technology, Discovision never filed a lawsuit against the Dutch company, Fiedler said.
“It was our hope all along to avoid filing suit,” he said.
The Costa Mesa firm hopes that Philips’ decision will persuade other electronics manufacturers to also obtain new licenses or broaden existing agreements with Discovision, Fiedler said.
Discovision contends that its patents cover fundamental optical technologies used in compact discs, disc players and other optical storage equipment.
Although many leading Japanese electronics manufacturers already have obtained licenses from Discovision for technology used in compact disc players, those agreements do not extend to the discs themselves and related products.
Plan More Talks
“We’ll be expanding our conversations with other companies,” Fiedler said.
Discovision employed 1,000 people in its home videodisc business until 1982, when IBM and MCA decided to sell the money-losing videodisc part of the operation to Japan’s Pioneer Electronics Corp.
Videodiscs, which contain digitally recorded video and audio, failed to catch on with consumers. But compact discs, which contain digitally recorded music with no video, have enjoyed explosive growth as a replacement for records and tapes.
Discovision now employs only 20 people. Its only business is licensing technology to manufacturers of optical storage products.
