DVD equipment producers and copyright organizations are expected to reach an agreement under which makers will raise wholesale prices of their DVD recording machines and discs by 1 percent to cover the cost of paying royalties to the organizations, industry sources said Friday.

Royalties will be paid to organizations such as the National Association of Commercial Broadcasters in Japan, with a limit to be set at 1,000 yen per unit, they said. The organizations were concerned about the possibility of rampant piracy of their intellectual property rights.

Unlike videocassette recorders — which use an analog format — DVD recording machines use a digital format that reproduces high-definition images. The agreement, which would settle the compensation issue, is expected to prompt makers of DVD-related products to promote sales of DVD devices — the next generation of recording equipment.

Pioneer Corp. and Sharp Ltd. have already marketed DVD recording machines, while Matsushita Electric Industrial Co. plans to introduce a new product in June.

The Copyright Law stipulates that copyright holders must be compensated for sales of recording machines and discs that can be used for home-recording of sound and images.

Chinese sue Toshiba

BEIJING (Kyodo) Three Chinese consumers have filed a lawsuit against Toshiba Corp. in a Beijing court, seeking at least 80,000 yuan ($9,660) for the company’s alleged failure to inform owners about flaws in some of its notebook computers and to remedy them, a newspaper said Friday.

According to the report in the Beijing Morning Post, the plaintiffs are suing Toshiba for allegedly violating the Chinese Consumer Protection Law, the Product Quality Law and a law covering “trustworthiness, fairness and equality,” although they have not claimed that their own computers are faulty.

The three plaintiffs — Zhu Guoqiang, Wu Jinsong and Yang Jinping — are owners of Toshiba notebook computers, according to the newspaper. They filed the suit Thursday. After listening to media reports some 11 days ago, they realized that their computers may contain faulty floppy disk controllers, which could result in the loss of data. They are also demanding apologies to all Chinese Toshiba laptop customers.

A May 8 Internet report pointed out that Toshiba notebook owners in the U.S. had reached an out-of-court settlement worth $1.1 billion in a class-action lawsuit against the company but that Chinese consumers were ineligible.

The announcement set off a volley of anti-Japan invective in Chinese Internet chat rooms. Toshiba maintains that despite the settlement, reached Oct. 29 in Texas, it “is not aware of any instance in which one of our owners has experienced data loss or data corruption under the circumstances described in the lawsuit,” according to its U.S. Web site.

The Web site says compensation for U.S. customers ranges from $443.21 per customer to free software patches to repair the floppy disk controller flaw. “We have seen this report and are now in the process of investigating the facts,” a Toshiba representative in Beijing said. Japanese, European and other non-U.S. Toshiba consumers are also ineligible for compensation.