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LITIGATION - Intellectual Property Patent Litigation Settlement (Details Narrative) (Intellectual property patent litigation settlement, USD $)
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0 Months Ended | 1 Months Ended | |
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May 25, 2011
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Jul. 31, 2010
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May 31, 2009
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Intellectual property patent litigation settlement
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| Gain Contingencies [Line Items] | |||
| Domicile of Litigation | United States District Court for the Eastern District of Texas, Tyler Division | ||
| Name of Defendants | Adtran, Inc, Cisco Systems, Inc. and Cisco-Linksys, LLC, (collectively, "Cisco"), Enterasys Networks, Inc., Extreme Networks, Inc., Foundry Networks, Inc., and 3Com Corporation, Inc. | ||
| Settlement agreement (licensed defendants) counterpartys name | Cisco Systems, Inc. and Cisco-Linksys, LLC, (collectively, "Cisco") | Adtran, Cisco, Enterasys, Extreme Networks and Foundry Networks | Netgear, Inc. ("Netgear") |
| Settlement agreement, Terms | Obliged to pay the Company royalties (which began in the first quarter of 2011) based on its sales of PoE products up to maximum royalty payments per year of $8 million through 2015 and $9 million per year thereafter for the remaining term of the patent. The royalty payments are subject to certain conditions including the continued validity of the Company’s Remote Power Patent, and the actual royalty amounts received may be less than the caps stated above, as was the case in 2011. Under the terms of the Agreement, if the Company grants other licenses with lower royalty rates to third parties (as defined in the Agreement), Cisco shall be entitled to the benefit of the lower royalty rates provided it agrees to the material terms of such other license. Under the terms of the Agreement, the Company has certain obligations to Cisco and if it materially breaches such terms, Cisco will be entitled to stop paying royalties to the Company. This would have a material adverse effect on the Company’s business, financial condition and results of operations | License the Remote Power Patent for its full term, which expires in March 2020 |
Under the terms of the license, Netgear licenses the Remote Power Patent for its full term which expires in March 2020, and pays quarterly royalties (which began as of April 1, 2009) based on its sales of PoE products, including those PoE products which comply with the Institute of Electrical and Electronic Engineers 802.3af and 802.3at Standards. Licensed products include Netgear's PoE enabled switches and wireless access points. The royalty rates included in the license are 1.7% of the sales price of Power Sourcing Equipment, which includes Ethernet switches, and 2% of the sales price of Powered Devices, which includes wireless access points. The royalty rates are subject to adjustment, under certain circumstances, if the Company grants a license to other licensees with lower royalty rates and Netgear is able to and agrees to assume all material terms and conditions of such other license. |
| Upfront payments by licensed defendants (in dollars) | $ 32,000,000 | $ 350,000 | |