Texas Instruments Inc has signed a 10-year cross-license agreement with Hyundai Electronics Industries Co that effectively settle all litigation between the two companies and will bring TI royalty payments of more than $1bn. The move follows a recent victory by TI in the first of several patent infringements suits it filed against the Korean giant since a previous agreement expired in November 1997.
In March, TI was awarded $25.2m in damages after a judge ruled that Hyundai had willfully infringed on two TI patents. Hyundai had contested that the patents in question were invalid. TI says it had been working to negotiate a new agreement with Hyundai since 1997 and took legal action in 1998 only after negotiations failed. The now-dropped suits had been filed in the US, Britain, France, Germany, the Netherlands and Japan.
The estimated $1bn windfall is based on projected Hyundai revenues over the life of the new agreement, which is retroactive to November 1997 and will expire at the end of 2007. TI said it expects to see roughly $86m in the second quarter of 1999 for catch-up royalties due under the deal, including $27m for the first quarter. Net of expense and taxes, the catch-up payment is expected to add about $0.12 to TI’s earnings per share in the second quarter. Analysts surveyed by First Call had been expecting $0.73.
