One-Red LLC, spun off six months ago from Philips

One-Red LLC, spun off six months ago from Philips as patent licensing agent for DVD Video, DVD-ROM, CD Audio and CD-ROM, is offering a mandatory per-batch licensing program at the request of shareholders Philips, Sony, Pioneer and LG, it said Monday. Under the new program, which took effect Sunday, licensees pay a royalty that’s roughly 20 percent less on a “per batch” basis than the previous license issued to each manufacturer, Ben Beune, executive vice president of One-Red, told us. The royalty rate for a DVD player is $3.60 under the standard licensing program, and it goes down to $2.80 per player under the new plan, he said. Companies fully compliant with terms and conditions of the license agreement receive the lower rate “as a reward for being compliant licensees,” he said. Licensed products can be tracked under the batch approach, where a manufacturer receives a license status confirmation document, enabling customers and customs authorities to confirm that shipped products are licensed, he said. Philips has been offering a per-batch option in the past, but it’s now mandatory, Beune said. Under previous manufacturer license agreements, when a licensee becomes “non-compliant and sells products to the market without paying royalties, there’s nothing you can do downstream to collect royalties,” Beune said. By setting up a per batch license, manufacturers have to apply for a license for every shipment and they “become liable for the payment of those royalties,” he said. The majority of Red-One employees, roughly 80-90 percent, are ex-employees of Philips’ Optical Storage Licensing Program, Beune said. The group is a standalone company owned by Philips, Sony, Pioneer and LG, and is “open to become the licensing agent for other companies for all kinds of technologies,” Beune said. There are now no specific future plans for other technologies, he added. The group is also the licensing agent for Blu-ray players and discs.