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DVD Cos. Allowed To License Patents
WASHINGTON (AP) - Looking to technology that appears destined to replace VCRs and compact discs, the Justice Department gave the go-ahead Thursday for six manufacturers jointly to license patents so other companies can produce digital video discs and players.

Under an arrangement approved by the Justice Department's antitrust division, companies that make DVD-Video and DVD-ROM discs and players can use the technology owned by the six manufacturers.

Pooling the patents held by the six businesses will reduce costs for obtaining the technology, while raising little possibility of competitive harm, said Joel I. Klein, assistant attorney general in charge of the department's antitrust division, in a letter.

A DVD - which is the same size as a CD but with seven times the capacity - can hold a two-hour feature film. Nintendo's next-generation video game player will have DVD technology, as will Sony Corp.'s next-generation Playstation video game system.

Matsushita Electric Industrial Co. Ltd. - one of the six companies - will make DVD drives for Nintendo. Matsushita is the world's largest maker of consumer electronics with brands such as Panasonic and Quasar.

Toshiba Corp. will offer licenses on behalf of Hitachi Ltd., Matsushita, Time Warner Inc., and Victor Co. of Japan Ltd.

The six companies plus four others established specifications for players to read the discs and convert them into images for screen display.

It is the second request for the Justice Department to approve a DVD-Video and DVD-ROM patent pool.

Last December, the department approved the pool formed by Koninklijke Philips Electronics N.V., Sony Corp. of Japan and Pioneer Electronic Corp. of Japan.

Sony is moving to DVDs for its next-generation of video games.

Under Justice Department procedures, organizations submit proposals to the antitrust division headed by Klein and receive a statement on whether the government will challenge the action.




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