|
Exhibit 10.1
SETTLEMENT AND LICENSE AGREEMENT
This Settlement and License Agreement (" Agreement ") is
entered into and made effective as of December 21, 2006 (the "
Effective Date "), by and between Silicon Image, Inc. ("
Silicon Image "), a Delaware corporation having its
principal place of business at 1060 E. Arques Ave., Sunnyvale, CA
94085, for itself and its majority owned or controlled subsidiaries
(collectively, " SIMG "), and Genesis Microchip Inc. ("
Genesis ") a Delaware corporation with its principal place
of business at 2150 Gold Street, Alviso, CA 95002, for itself and
its majority owned or controlled subsidiaries (collectively, "
GNSS ").
RECITALS
WHEREAS, Silicon Image filed suit against Genesis in the U.S.
District Court for the Eastern District of Virginia (the "
District Court ") in 2001 for alleged infringement of
Silicon Image’s U.S. patent number 5,905,769, and
subsequently added a claim for alleged infringement of Silicon
Image’s U.S. patent number 5,974,464;
WHEREAS, Silicon Image and Genesis entered into a memorandum of
understanding dated as of December 18, 2002 (the " MOU
");
WHEREAS, the parties have been involved in litigation regarding
the MOU before the District Court and the U.S. Court of Appeals for
the Federal Circuit;
WHEREAS, GNSS is currently selling, and wishes to continue to
sell Royalty-Bearing Products (as defined below), for incorporation
by its customers into personal computers, televisions and other
products that use the DVI 1.0 and/or HDMI 1.x standards (as defined
below);
WHEREAS, Silicon Image is one of the founders of the DVI 1.0 and
HDMI 1.x standards, and wishes to promote the adoption of such
standards;
WHEREAS, GNSS wishes to obtain, and SIMG is willing to grant to
GNSS, the rights set forth in this Agreement subject to the terms
and conditions of this Agreement;
NOW, THEREFORE , the parties agree as follows:
1. Definitions .
1.1 " HDMI 1.x standard " means the HDMI Version 1.0
standard and/or its Minor Updates.
1.2 " Minor Update " has the same definition herein as
the definition of "Minor Update" set forth in the High-Definition
Multimedia Interface Specification Revision 1.1 Adopter Agreement
signed by Genesis in July 2005.
1.3 " Royalty-Bearing Products " means all products
designed by GNSS or sold or offered for sale by GNSS under a GNSS
brand which implement the DVI Version 1.0 standard or the HDMI 1.x
standard. For purposes of this Agreement, Royalty-Bearing
1
Products are either "Rx products" or "Tx
products". "Rx product" means a Royalty-Bearing Product that is an
IC device capable of being used to receive and decode DVI or HDMI
signals. "Tx product" means a Royalty-Bearing Product that is an IC
device capable of being used to encode and transmit DVI or HDMI
signals. Further, an Rx product is either "discrete" or
"integrated". An Rx product is "discrete" if the sole capability of
that product is to receive pixel data over a DVI / HDMI signal link
and output the same pixel data without alteration on a parallel
signal link with separate signals for each bit of pixel data and
each control signal. An Rx product is "integrated" if it is not a
discrete Rx product as defined in the preceding
sentence.
1.4 " SIMG Licensed Patents " means all patent claims
owned by SIMG claiming entitlement to a priority date on or before
September 1, 2006, and all reissues, reexaminations and
foreign counterparts thereof.
1.5 (i) As used in this Agreement, a patent claim is "owned" by
a party if the party either owns or otherwise has the right to
assert the patent claim.
(ii) Notwithstanding anything to the contrary in this Agreement,
HDMI Licensing, LLC, a subsidiary of Silicon Image that is the
agent responsible for administering the licensing of the HDMI
specifications, promoting and enforcing the HDMI standard, and
providing education on the benefits of HDMI to retailers and
consumers, shall not be considered to be a "majority owned or
controlled subsidiary" of Silicon Image for the purposes of this
Agreement. No licenses are granted hereunder by HDMI Licensing,
LLC. Silicon Image represents and warrants that HDMI Licensing, LLC
does not own any patents or patent applications, or have the right
to assert any patents, and that HDMI Licensing, LLC will not own
any patents or patent applications or have the right to assert any
patents during the term of this Agreement. Without limiting the
foregoing sentence, Silicon Image covenants for a period of three
(3) years after the Effective Date that it shall not allow
HDMI Licensing, LLC to assert patents in a manner that would be a
breach of the covenant in Section 6.1 if such assertion were
made directly by Silicon Image.
(iii) For avoidance of doubt, and without limiting the scope of
any rights granted to GNSS in this Agreement, in the event SIMG
offers to license a content protection, storage, or networking
scheme, protocol or standard pursuant to a standard adopters
agreement available to adopters on reasonable and nondiscriminatory
terms, this Agreement shall not be deemed to make GNSS an "adopter"
under any such adopters agreement unless GNSS executes such
adopters agreement.
2. License Grants .
2.1 Subject to the terms and conditions of this Agreement, SIMG
hereby grants GNSS a worldwide, nonexclusive license under the SIMG
Licensed Patents to make, have made, use, offer for sale, sell and
import Royalty-Bearing Products.
2
2.2 The license granted in Section 2.1 is
non-sublicensable and non-assignable (except to an entity that
gains majority ownership or control of GNSS to the extent set forth
in Section 8).
2.3 SIMG represents and warrants that it owns the SIMG Licensed
Patents and has the right to grant the license in Section 2.1,
that fewer than ten (10) of the SIMG Licensed Patents are
jointly owned, and that it has not assigned any patents or patent
applications between December 18, 2002 and the Effective Date.
Each party reserves all rights not expressly granted herein.
3. Payments .
GNSS previously has paid certain amounts in connection with the
parties’ litigation and the MOU, including a transfer from
the District Court escrow to Silicon Image in the amount set forth
in Exhibit A, Section A.1 in or around May, 2006, and a direct
payment by Genesis to Silicon Image in the amount set forth in
Exhibit A, Section A.2 in or around July, 2006.
In addition, Genesis will pay Silicon Image, within seven
(7) working days (i.e. excluding weekends and holidays) after
the Effective Date, the following amounts:
(i) the amount set forth in Exhibit A, Section A.3; and
(ii) the amount set forth in Exhibit A, Section A.4.
In addition, within seven (7) working days after the
Effective Date, Genesis will provide to SIMG a written statement in
the form attached as Exhibit B, setting forth sales information, by
quarter, for Royalty-Bearing Products sold by GNSS to third parties
("Sold," and each such sale, "Sale") from December 18, 2002
through September 30, 2006 (including without limitation the
number of DVI integrated Rx products Sold since December 18,
2002, and including the number of units set forth in Exhibit A,
Section A.5 of DVI integrated Rx products Sold after
December 18, 2002, but excluding Royalty-Bearing Products
excluded pursuant to Section 4.5).
4. Royalty Payments .
4.1 For all Royalty-Bearing Products Sold beginning on
October 1, 2006 until the earlier of the expiration of this
Agreement or the termination of this Agreement in accordance with
its terms (other than (a) the number of units set forth in
Exhibit A, Section A.5 of DVI integrated Rx products Sold after
December 18, 2002 and (b) Royalty-Bearing Products
excluded pursuant to Section 4.5), Genesis shall pay Silicon
Image the per IC royalties set forth in Exhibit C.
4.2 The foregoing royalties are in addition to royalties payable
by GNSS, if any, under its HDMI adopter agreement or any adopter
agreement GNSS may execute for any other standard.
3
4.3 Units with DVI or HDMI circuitry that is not
functional and cannot be made functional (i.e. as a result of not
being bonded-out or as a result of other permanent and irreversible
disablement, the IC is not capable of being used to receive and
decode DVI or HDMI signals in the case of receiver circuitry, and
the IC is not capable of being used to encode and transmit DVI or
HDMI signals in the case of transmitter circuitry), will not be
subject to payment of royalties under this Agreement. On a
quarterly basis, GNSS shall provide Silicon Image with a written
list identifying by part number any such GNSS products Sold
containing DVI or HDMI circuitry that is not functional and cannot
be made functional.
4.4 SIMG and GNSS acknowledge, in connection with the products
described in this settlement proposal, the unusual technical
difficulties in determining the use or non-use of particular patent
claims, and the mutual convenience of computing royalties on
defined classes of products without regard to actual use of patent
claims. Accordingly, and in furtherance of their desire to resolve
their present disputes and to avoid future disputes, the parties
acknowledge that computing royalties on the products described
herein, regardless of actual use of particular patent claims,
provides a mutually convenient means for measuring the value of the
licenses granted.
4.5 For avoidance of doubt and notwithstanding anything to the
contrary, only a single royalty will be payable by GNSS directly to
SIMG under this Agreement on a single unit of Royalty-Bearing
Product. If multiple royalties would otherwise apply to a single
unit of Royalty-Bearing Product under this Section 4, only the
highest of the applicable royalties will apply. Royalties will not
be due on Royalty-Bearing Products sold to third parties that have
a royalty-bearing or fully paid up patent license with SIMG that
covers the third party’s sale of products containing
components from such third party’s suppliers that implement
the DVI Version 1.0 standard or the HDMI 1.x standard, including
without limitation (as of the Effective Date) Sony, Toshiba and
Pace Micro Technology. In the event SIMG enters into additional
such licenses in the future, Silicon Image shall promptly notify
Genesis of the identity of the third party so that GNSS may adjust
its calculations accordingly. (A license or non-assert relating to
a specification or standard that is granted to a founder or adopter
of the specification or standard pursuant to a form agreement
available to founders or adopters on nondiscriminatory terms to
implement the specification or standard (such as, for example and
without limitation, the HDMI Specification Adopter Agreement or the
Digital Visual Interface Specification Revision 1.0 Adopter’s
Agreement) will not be deemed a "royalty-bearing or fully paid up
patent license with SIMG" for purposes of the preceding sentences).
In the event GNSS becomes licensed to SIMG Licensed Patents under a
separate agreement with SIMG, whether by merger or acquisition or
otherwise, and a Royalty-Bearing Product under this Agreement would
also bear a royalty under that separate agreement absent this
Section 4.5, then GNSS may pay only the higher of the two
royalties under either this Agreement or that separate agreement
for such Royalty-Bearing Product. For avoidance of doubt, and
notwithstanding anything to the contrary, if GNSS acquires or
develops a product line that incorporates a licensed core provided
by SIMG or anyone authorized by SIMG to provide such licensed core
pursuant to a royalty-bearing or fully paid-up core license
agreement, then those products will continue to be governed solely
by the core license agreement and not be covered by this
Agreement.
4
4.6 Within forty-five (45) days after the
end of each calendar quarter during the term of this Agreement,
commencing with the quarter ending December 31, 2006, Genesis
shall provide Silicon Image with a written statement in the form of
Exhibit D setting forth the basis for the calculation of the amount
payable by GNSS to SIMG under Section 4.1 of this Agreement
for GNSS’s sales to third parties of Royalty-Bearing Products
during the just-ended quarter, together with payment of such
amount. GNSS shall pay interest on all overdue, undisputed amounts
at the WSJ prime rate.
4.7 For purposes of computing and reporting royalties hereunder,
royalties shall accrue only for Sales, which may be reduced to
account for returns, exchanges, credits, and other similar
adjustments or allowances.
5. Mutual Release .
5.1 Upon receipt by Silicon Image of the payments in Sections
3(i) and 3(ii) and the written report in Section 3, SIMG and
GNSS hereby irrevocably release each other and their suppliers,
manufacturers, licensees, distributors, resellers, customers,
successors and assigns from all claims, causes of action and
liability arising prior to the Effective Date: (i) relating to
the MOU, (ii) which the releasing party had against the other
party that relate to the litigation settled by the MOU and
subsequent litigation over the interpretation of the MOU,
(iii) arising out of or related to all claims and
counterclaims that were asserted, or could have been asserted by
the releasing party, in such litigations, or (iv) arising out
of or related to infringement of any SIMG Licensed Patents by the
manufacture, use, offer for sale, sale or importation of a
Royalty-Bearing Product. However, the foregoing release shall not
affect GNSS’s right to challenge, or assert, after the
Effective Date, any claims, counterclaims or defenses w
|
