PATENT AND PLAYABILITY ISSUES LINGER FOR ‘DUALDISC’ HYBRID

The first phase of DualDisc ended Feb. 29, nearly a month after labels BMG, Capitol-EMI, Sony Music, Warner and Universal put about 15 titles on sale at selected stores in Boston and Seattle. The hybrid is dual sided, with Red Book CD content on one side and either video, music video or DVD-Audio on the DVD side. Some of the labels included the trademarked CD and DVD logos on their flippers, although Sony used neither.

Dual-sided hybrids have raised concern in the industry owing to their slightly greater thickness compared with standard DVDs and CDs. Concerns include that the hybrids might jam in slot- loading disc drives, or show aerodynamic instability in all drives that could lead to reading errors. The nominal thickness of CDs and DVDs is 1.2 mm; the specs says the discs can’t be more than 1.5 mm thick. The earliest dual-sided flippers bonded a 1.2 mm CD to a 0.6 mm DVD layer, but progress over the years has slimmed the sandwich, and DualDisc’s backers claimed their flippers are less than 1.5 mm.

In hands-on evaluations by Consumer Electronics Daily (CED Feb 17 p2) and others, jamming didn’t emerge as a problem, but DVD and CD playback has been inconsistent. One independent replication lab found DVD read-errors attributable tilt-error from the DualDisc’s divergence from flatness (CED Feb 19 p3). It’s speculated that the unequal thickness of the flipper’s halves -- about 0.6 mm for DVD and 0.9 mm for CD -- affect the DualDisc’s flatness. Additionally, the 0.9 mm side compared to a CD’s 1.2 mm imposes capacity limitation on DualDisc, vs. 74-78 min. for standard Red Book CDs. Now, another source tells us that tests performed by another independent replication lab finds the CD side of DualDisc to be out of spec with the Red Book standards -- so much that any scratches, blemishes or dirt on its surface would result in severe playability problems.

Another concern to the industry is legal. Dieter Dierks, principal of DVD Plus International -- which has been producing the DVD [plus] hybrid for some years and says it’s now down to 1.43 mm thickness -- claims patent ownership of the dual-sided hybrid process (CED Feb 9 p2). It’s still not known who developed or controls the process for DualDisc. Patent applications, if any, have yet to become public record, although Time-Warner has applied for trademarks on the DualDisc logo and terms (CED Feb 18 p3).

Correspondence and legal documents we obtained between Warner and DVD Plus International shows a relationship going back to April 2000, when the parties signed an agreement that assigned Warner’s hybrid patents to the Dierks group. In that contract, with the then-Warner owned WEA Mfg. and signed by Vp-Legal Affairs Jeffrey Raider, Warner also agreed to use Dierks’ DVD [plus] process and logo on any hybrids it offered, assuming DVD Plus International perfected the process. Dierks’ company has since produced about 2 million DVD [plus] hybrids for 70 titles. The agreement moreover gave the Warner companies -- but not other record companies -- a royalty-free license to use the DVD [plus] technology and logo through June 2005, after which the April 2000 agreement would need to be renegotiated.

WEA Mfg. had 1998 patent applications on dual-sided hybrid discs, and those for Australia, Europe and Japan were transferred to Dierks. Another patent application, for the U.S., wasn’t part of the agreement because WEA Mfg. had let the Feb. 27, 1998, application lapse. Dierks’ group told us although it wanted ownership of the WEA Mfg. U.S. application, it already had its own patent application in the U.S. (US 09/455980, still pending) that superceded WEA Mfg.’s. As part of the agreement to use the DVD [plus] logo worldwide, WEA Mfg. included a 34-page attachment to the agreement listing all Time-Warner owned companies at the time -- including WMG’s labels. In part, WEA Mfg. included the list so Dierks and company couldn’t claim royalties in case a Warner company anywhere in the world was left out.

A falling-out between Warner and Dierks’ group began last March, after a N.Y.C. meeting between WMG and DVD Plus International executives to discuss WMG’s planned introduction of DVD/CD hybrids. After asking Warner executives Thomas Costabile and Paul Vidich to confirm the company would honor the 2000 agreement, DVD Plus International was informed by letter March 7 that Warner would -- with an exception. “We certainly do intend to comply with the agreement between WEA and Dieter,” wrote WMG Vp Mark Ansorge. “However,… the Agreement does not require us to use the DVD [plus] name or logo with respect to DVD/CD hybrid discs in the U.S.”

Discussions through last May failed to resolve the issue, resulting in a June 13 letter from DVD Plus International’s patent attorney that reiterated the Dierks’ patent claims and licensing agreement with Warner, and said the company was “prepared to file a preliminary injunction against WEA if contrary to our expectation WEA really should break the contract.” Dierks’ group has since said it would defend its patents and licenses (CED Feb 9 p2).

On the basis of the contracts and correspondence, we queried WMG for comment on DVD Plus International’s claims and WMG’s position on the April 2000 contract. In a Feb. 27 e-mail to Paul Vidich, WMG exec. vp-strategic planning/business development, we also asked whether WMG had made the other DualDisc partner labels fully aware of the 2000 licensing agreement between WEA Mfg. and Dierks. Although Vidich immediately replied that Warner would respond soon, a spokeswoman informed us late last week the company would have no response because WEA Mfg. no longer was a Time Warner company. Instead, WMG suggested we contact for comment Cinram -- the Canadian replicator that purchased the WEA Mfg. operation last year and, like Sony, has been making the DualDisc. Cinram has yet to reply to our March 5 request for comment.

Another lingering question regarding hybrid disc technology is whether the DVD Forum will approve any flippers and grant them license to use the DVD logo. Sources at the Forum told us evaluations and testing were ongoing, but there’s serious dissent within the group, particularly regarding the DualDisc. Meanwhile, DVD Plus International told us it approached the DVD Forum last Nov. to inquire about certification for “DVD plus” and provided samples of the then-1.48 mm hybrid. The company said it will be submitting also the latest 1.43 mm discs, produced at replicator Digital Valley in Val-de-Reuil, France. The first 1.43 mm “DVD plus” title went on sale in France last month, the technology website pcinpact.com reported. The discs have a gold surface on the DVD side and a silver surface for the CD.