Time Warner vs Orc

1953 WordsJan 27, 20138 Pages
Time Warner vs ORC Optical Recording Corporation (ORC) was established in 1984 with the main purpose of capitalizing on the technological innovation of James T. Russell. Russell’s new technology was based on his recent invention that revolutionized recorded music storage devices. Although Russell was not the first to come up with the concept of the Compact Disk (CD), he was among the first people to patent this technology. By 1985, Russell held over 25 patents in 7 countries across the world to various technologies related to optical recording and playback. Russell's intellectual property was purchased by ORC in Toronto in 1985, the firm then proceeded to notify a number of CD manufacturers that their CD technology was infringing on…show more content…
It was key for ORC to sign Sony to a licensing agreement. Agreeing to Sony’s terms was a strategic move which not only solidified a revenue stream but also paved the way for other firms to follow suit. Upon signing Sony to a licensing agreement, Phillips Dupont seemed to follow suit primarily to avoid costly litigation. Specifically, ORC managed to sign a licensing agreement with Phillips on moderate terms that did not fully utilize the legal leverage of ORC. In other words, ORC was not able to negotiate the license on their terms but more out of desperation of signing a licensing agreement. Despite having the upper hand, ORC was unable to capitalize on their strong position. During the Sony deliberations, ORC was experiencing financial troubles in Canada. The Canadian government wished to immediately resend their tax credits which awarded ORC, as a research firm, $6.5 million Canadian dollars. Adamson refused to pay the $6.5 million which was primarily based on the fact that ORC could not afford to pay them. Nevertheless, the aforementioned decision of the Canadian government was a potential threat to ORC, and could have resulted in a different business development strategy employed by the company. To capitalize on the recently successful licensing program, ORC turned their attention towards the next largest manufacturer of CD media in the U.S. - WEA Manufacturing (Subsidiary of Time Warner). Initial talks to Time Warner

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