Patent Licensing Deal Will Lower Cost of Blu-ray

In a joint press release, Panasonic, Philips and Sony announced that they are working with other patent holders to create a license for Blu-ray products.  The license will cover essential patents for Blu-ray discs, DVDs and CDs.  Furthermore, it is expected that this deal will lower royalty rates by at least 40%, reducing the cost of movies, music or games to consumers.

The licensing program will be offered by a new licensing company that is based in the United States.  The head of the license company is Gerald Rosenthal, a former head of IP at IBM and CEO of Open Invention Network.  In addition to lowering the cost of royalties, this licensing program will create a “one-stop-shop” for product licenses, reducing the burden on licensed companies.  As Mr. Rosenthal said:

By establishing a new licensing entity that offers a single license for Blu-ray Disc products at attractive rates, I am confident that it will foster the growth of the Blu-ray Disc market and serve the interest of all companies participating in this market, be it as licensee or licensor.

The companies are stating that this license will be introduced in the middle of 2009.  This program also offers measures to identify unlicensed products in the market, as well as a system to address those who have not properly obtained a license.

Hopefully this license will fulfill the promise of reducing the prices of Blu-ray discs, making it easier for the consumer.