Exhibit 10.1
SETTLEMENT AGREEMENT
This Settlement Agreement is made and entered into effective September
14, 2006, by and between Paxar Americas, Inc. ("Paxar"), on the one hand, and
Zebra Technologies Corporation, for and on behalf of itself and ZIH Corp., and
Zebra Technologies International, LLC (collectively "Zebra"), on the other hand.
WHEREAS, Paxar and Zebra are engaged in litigation in the Federal
District Court in the Southern District of Ohio, Western Division, in Dayton,
Ohio, Civil Action No. C-3-03-142 ("the Litigation");
WHEREAS, Paxar asserted in the Litigation and hereby represents and
warrants that it holds title to and has the right to enforce its rights in the
following United States patents: 5,483,624; 5,805,779; 5,594,838; 5,833,800;
6,805,183; 6,712,112; 6,386,775; 6,163,538 and 6,533,476 (collectively the
"Paxar Patents-In-Suit");
WHEREAS, in addition to the Paxar Patents-In-Suit, Paxar also asserted
in the Litigation United States patent 4,652,317;
WHEREAS, Paxar and Zebra hereby consent to the entry of a separate
Consent Judgment and Agreed Order of Dismissal in the form attached hereto as
Exhibit A; and
WHEREAS, the parties to this Settlement Agreement desire to avoid
further litigation risks and expenses and therefore to settle and to compromise
all claims set forth in the Litigation as well as any other claims that were or
could have been brought on or prior to the date of this Agreement and therefore,
for good and valuable consideration, the sufficiency of which the parties
acknowledge, the parties agree as follows:
1. DEFINITIONS
1.1 "Affiliate" shall mean, in relation to any party hereto, any
corporation or other business entity controlled by, controlling, or under common
control with that party. For this purpose, "control" shall mean direct or
indirect beneficial ownership of more than fifty percent (50%) of the voting
stock of, or of a greater than fifty percent (50%) interest in the income of, or
the power to direct or cause the direction of the management and policies (by
contract, stock ownership, or otherwise) of, such corporation or other business
entity.
1.2 "Production Product" shall mean any tooled product
manufactured by or for Zebra or its Affiliates.
1.3 "Licensed Patents" shall mean the Paxar Patents-In-Suit and
any continuation, continuation-in-part, division, reexamination, reissue,
extension or renewal patents or patent applications of the Paxar Patents-In-Suit
and any foreign counterpart patents or patent applications to any of the
foregoing, and any United States or foreign patent or patent application,
including any continuation, continuation-in-part, division, reexamination,
reissue, extension or renewal thereof, claiming priority to any patent or patent
application to which any of the Paxar Patents-In-Suit claim priority; however,
as set forth in Section 5.1, U.S. Patent Nos. 5,683,545; 5,800,669; 5,900,110;
and 6,279,638 shall not be fully "Licensed Patents" until September 14, 2009.
1.4 "Zebra Licensed Product" shall mean (1) any product
manufactured, used, sold, offered for sale or imported by Zebra or its
Affiliates that would, in the absence of the license granted to Zebra and its
Affiliates under Section 5.1, infringe, contribute to the infringement of, or
induce the infringement of any claim of a Licensed Patent or (2) any product
manufactured for Zebra's own use and sale that would, in the absence of the
license granted to Zebra and its Affiliates under Section 5.1, infringe,
contribute to the infringement of, or induce the infringement of any claim of a
Licensed Patent. Notwithstanding the foregoing, any such product that (a) is a
Production Product that infringes, contributes to the infringement of, or
induces the infringement of any claim of a patent owned by Paxar or its
Affiliates that is not a fully Licensed Patent is not a "Zebra Licensed
Product;" or (b) infringes, contributes to the infringement of, or induces the
infringement of any claim of a patent owned by Paxar or its Affiliates that is
not a Licensed Patent is not a "Zebra Licensed Product."
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1.5 "Acquired Zebra Licensed Products" shall mean those Zebra
Licensed Products that are Production Products that (1) are the same as those
that were commercially sold by Zebra at least twelve months prior to the date of
any acquisition pursuant to Section 7.4(b); (2) were part of the capital assets
sold by Zebra Technologies Corporation to the acquirer under Section 7.4(b); and
(3) are not made, used, distributed, sold, offered for sale, or imported by
Zebra or its Affiliates, or made for Zebra or its Affiliates, after the date of
acquisition.
2. ACKNOWLEDGEMENT THAT THE PAXAR PATENTS-IN-SUIT ARE NOT
INVALID AND ARE ENFORCEABLE
Zebra agrees that each of the Paxar Patents-In-Suit, and each and every
claim thereof, is not invalid and is enforceable.
3. CONSENT JUDGMENT AND AGREED ORDER OF DISMISSAL
3.1 The parties agree to enter the separate Consent Judgment and
Agreed Order of Dismissal that is attached hereto as Exhibit A. The United
States District Court for the Southern District of Ohio, Western Division, shall
maintain jurisdiction of the Litigation for enforcement of the Consent Judgment
and Agreed Order of Dismissal and this Settlement Agreement.
3.2 The parties shall file the Consent Judgment and Agreed Order
of Dismissal in the Litigation (Civil Action No. C-3-03-142) within seven (7)
days after Paxar's receipt of the payment set forth in Section 4 herein.
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4. PAYMENT
Zebra shall pay to Paxar the lump sum, one time payment in the amount
of sixty-three million seven hundred fifty thousand dollars ($63,750,000.00) on
September 14, 2006, by wire transfer to an account identified by Paxar.
5. LICENSE GRANT AND COVENANT NOT TO XXX
5.1 Paxar hereby grants to Zebra and its Affiliates an
irrevocable, perpetual, fully paid, non-exclusive, worldwide license under the
Licensed Patents, without the right to sublicense, to make, have made for its
own use and sale, use, distribute, sell, offer for sale, and import Zebra
Licensed Products; however, with respect to U.S. Patent Nos. 5,683,545;
5,800,669; 5,900,110; and 6,279,638, the foregoing patent license is limited
until September 14, 2009 such that the license to manufacture, have manufactured
or sell a Zebra Licensed Product that is a Production Product shall not begin
until September 14, 2009. The license granted in this Section 5.1 is
non-transferable and non-assignable except as set forth in Section 7.4(a).
5.2 For any Zebra product that meets the definition of "Zebra
Licensed Product" under the first sentence of Section 1.4, but is excluded from
the definition of "Zebra Licensed Product" due to the last sentence of Section
1.4 (i.e., 1.4(a) or 1.4(b)) because it infringes, contributes to the
infringement of, or induces the infringement of any claim of a patent owned by
Paxar or its Affiliates that is not a fully Licensed Patent, Paxar covenants not
to xxx Zebra or its Affiliates for infringement of a fully Licensed Patent on
such product. However, there is no covenant not to xxx for infringement of any
other patent owned by Paxar or its Affiliates.
5.3 Paxar hereby covenants not to xxx Zebra or its Affiliates
for any claim regarding United States patent 4,652,317.
5.4 To give comfort to Zebra's customers, Paxar hereby covenants
not to xxx any person or entity who has purchased a Zebra Licensed Product
before or after the date of this Settlement Agreement for any claim of
infringement of any Licensed Patent or United States patent 4,652,317 for the
use or resale of that Zebra Licensed Product.
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6. MUTUAL RELEASE
Paxar and Zebra and their respective parents, subsidiaries, officers,
directors, employees, representatives, agents, Affiliates, successors, and
assigns, in their capacities as such (the "Releasing Parties"), do hereby
release and discharge one another and their respective parents, subsidiaries,
officers, directors, employees, representatives, agents, Affiliates, successors
and assigns, in their capacities as such (the "Released Parties"), from all
Released Matters, where "Released Matters" means any and all manner of debts,
damages, demands, duties, liabilities, accounts, sums of money, liens, costs,
expenses, obligations, suits, actions, claims and causes of action of any kind
and nature whatsoever, that any of the Releasing Parties had against any of the
Released Parties as of the date of this Settlement Agreement, whether now known,
unknown or unknowable, suspected or unsuspected, at law or in equity, which the
Releasing Parties now own or hold, or at any time heretofore owned or held, by
reason of any act, matter, cause or thing whatsoever, except for the specific
obligations in this Settlement Agreement. Zebra and Paxar, on behalf of
themselves and their respective Affiliates, covenant not to xxx one another for
any reason with respect to any claim that reasonably could be interpreted as
falling, in whole or in part, within the scope of a Released Matter. For
purposes of clarity, Paxar and its Affiliates' Opposition to Zebra's European
Patent 1 052 109 and their rights to challenge the validity and/or patentability
of that European patent and/or any national patent based thereon or resulting
therefrom (including but not limited to national patents in Germany, France, and
Great Britain) are not "Released Matters."
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7. MISCELLANEOUS
7.1 Zebra and its Affiliates, on behalf of themselves, their
officers, directors, employees, and agents in their capacity as such, agree that
they will not challenge or contest in any way the validity, patentability,
and/or enforceability of any claim of the Licensed Patents in any future
proceeding regardless of the product(s) or process(es) at issue.
7.2 Within a reasonable period of time, Zebra and its Affiliates
shall take the same reasonable steps to comply with the marking provisions of 35
U.S.C. ss. 287 by marking the Zebra Licensed Products or their packages as Zebra
takes to comply with the marking provisions of 35 U.S.C. ss. 287 for Zebra
products covered by its own patents. Paxar's exclusive remedy for breach of this
Section 7.2 shall be specific performance.
7.3 It is agreed and understood that this Settlement Agreement
(including without limitation Zebra's payment to Paxar under Section 4 and the
license granted to Zebra and its Affiliates under Section 5) shall not and
cannot be revoked, voided, terminated, annulled or rescinded for any reason
whatsoever, with the sole exception being any failure by Zebra to pay the monies
due as set forth in Section 4.
7.4 (a) Zebra may transfer this Settlement Agreement and
the license granted hereunder to any acquirer of all or substantially all of the
capital stock, assets or business of Zebra Technologies Corporation.
(b) If Zebra Technologies Corporation sells a portion
of its business that includes Zebra Licensed Products, Paxar shall covenant not
to xxx the acquirer of such portion for any claim of infringement of any
Licensed Patents for the manufacture, use, importation, sale, or offer for sale
of any Acquired Zebra Licensed Products if and only if, within ten (10) days
following such an acquisition, Zebra notifies Paxar in writing of that
acquisition and provides to Paxar: (1) a list of the Zebra Licensed Products
that will be Acquired Zebra Licensed Products; (2) three samples of the Zebra
Licensed Products that will be Acquired Zebra Licensed Products; and (3) one
copy of all service manuals and all manuals given to, or accessible by,
customers related to the Zebra Licensed Products that will be Acquired Zebra
Licensed Products.
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(c) As a condition precedent for any transfer or
covenant under this Section 7.4, any acquirer must agree in writing to be bound
by this Settlement Agreement, including without limitation Sections 2, 7.1, and
7.2, and must provide such written agreement to Paxar within ten (10) business
days following said acquisition.
(d) Consistent with Section 7.10, nothing contained
herein shall be construed as conferring any express or implied license or right
(including any license to any patent owned by Paxar or its Affiliates that is
not a Licensed Patent) to any acquirer other than as specifically and expressly
provided in this Section 7.4.
7.5 This Settlement Agreement shall inure to the benefit of and
is binding upon Zebra, its officers, agents and employees in their capacity as
such, and successors and assigns of Zebra, and shall inure to the benefit of and
be binding upon Paxar, its officers, agents and employees in their capacity as
such, and successors and assigns of Paxar.
7.6 Paxar and/or its Affiliates represent and warrant that they
hold title to the Licensed Patents and that there are no outstanding agreements
with third parties that would be inconsistent with the license granted herein.
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7.7 Nothing in this Settlement Agreement shall be construed as
conferring on either party the right to use, in any advertising, publicity,
statement, disclosure, or the like, any name, trade name, service xxxx, or
trademark of the other party or its Affiliates.
7.8 Paxar and Zebra each represents that it has the right and
authority to enter into and consummate this Settlement Agreement on behalf of
itself and its Affiliates and to bind its Affiliates where the context so
requires.
7.9 Each person signing the Settlement Agreement on behalf of a
corporate party represents that he or she is authorized to sign on behalf of
that corporate party.
7.10 Nothing contained in this Settlement Agreement shall be
construed as conferring any express or implied license or right (including any
license to any patent owned by Paxar or its Affiliates that is not a Licensed
Patent) to Zebra or any other person or entity other than as specifically and
expressly provided in this Settlement Agreement.
7.11 Nothing contained in, or excluded from, this Settlement
Agreement shall be construed as an admission by either party regarding any
matter not expressly set forth herein (including an admission of liability or
wrongdoing on the part of any party).
7.12 This Settlement Agreement, and each document relating
hereto, has been jointly prepared by the parties hereto and their respective
counsel, and the provisions hereof or thereof will not be construed more
strictly against one party than another as a result of its participation in such
preparation.
7.13 This Settlement Agreement shall be construed under the
Patent Laws of the United States and the law of the State of Ohio, without
regard to the state's conflicts of laws.
7.14 This Settlement Agreement constitutes the complete and
entire agreement between the parties hereto respecting the subject matter
hereof, and supersedes and terminates all prior agreements with respect to the
settlement of the Litigation.
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IN WITNESS WHEREOF, the parties have executed this Settlement Agreement
by their respective duly authorized officers.
PAXAR AMERICAS, INC. ZEBRA TECHNOLOGIES CORPORATION, for and behalf of
itself, ZIH CORP. and ZEBRA TECHNOLOGIES
INTERNATIONAL, LLC
By: /s/ Xxxxxx X. van der Merwe By: /s/ Xxxxxx Xxxxxx
_______________________ __________________
Xxxxxx X. van der Merwe Xxxxxx Xxxxxx
President and Chief
Executive Officer of
Paxar Corporation, acting
under a Power of Attorney
issued by Paxar Americas, Inc.
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EXHIBIT A
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION (DAYTON)
:
PAXAR AMERICAS, INC., : CASE NO. C-3-03-142
:
Plaintiff, : Judge Xxxxxx X. Xxxx
: Magistrate Judge Xxxxxxx X. Xxxx
v. :
:
ZEBRA TECHNOLOGIES CORPORATION, ZIH CORP., :
and ZEBRA TECHNOLOGIES INT'L, LLC. :
:
:
Defendants.
___________________________________________
CONSENT JUDGMENT, AND AGREED ORDER OF DISMISSAL
Plaintiff Paxar Americas, Inc. and Defendants, Zebra Technologies
Corporation, ZIH Corp., and Zebra Technologies Int'l, LLC, have settled their
differences and agreed, pursuant to the Settlement Agreement attached as Exhibit
A to this Order, to entry of this Consent Judgment and Agreed Order of Dismissal
to resolve this action. This Court hereby states and orders as follows:
1. This Court has jurisdiction over the subject matter of this
action and has personal jurisdiction over the parties. Venue is proper in this
District.
2. Each of the following United States patents in suit, and
each and every claim thereof, is not invalid and is enforceable: 5,483,624;
5,805,779; 5,594,838; 5,833,800; 6,805,183; 6,712,112; 6,386,775; 6,163,538; and
6,533,476.
3. Each party shall bear its own respective costs and
attorneys' fees.
4. This Court shall retain jurisdiction to enforce this Consent
Judgment and Order of Dismissal and the Settlement Agreement attached as Exhibit
A.
5. This Judgment shall be final and this action shall be dismissed with
prejudice pursuant to the Settlement Agreement attached as Exhibit A.
IT IS SO ORDERED.
_________________________________________
Xxxxxxxxx Xxxxxx X. Xxxx
United States District Judge
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The foregoing Consent Judgment and Agreed Order of Dismissal is hereby
consented to:
DATE:_________________ By: _______________________
Xxxx Xxxxx Xxxxxxx, Esq.
Xxxxx X. Xxxxxxxxx, Esq.
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx X. Xxxxxxxx, Esq.
XxXXXXXXX, HELD AND XXXXXX
000 Xxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxxxxxxx, Esq.
XXXXXX, XXXXX &
XXXXXX 400 National
City Center 0 Xxxxx
Xxxx Xxxxxx Xxxxxx,
XX 00000
ATTORNEYS FOR PLAINTIFF
PAXAR AMERICAS, INC.
DATE: ________________ By: _______________________
Xxxxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxxx, Esq.
XXXXXXX PROCTER LLP
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxx
(0010417) XXXXXX
XXXXXXX & XXX PLL 000
Xxxxxxxxxx Xxxxx, XX
00 Xxxxx Xxxxxx
Xxxxxx Xxxxxx, XX
00000
ATTORNEYS FOR DEFENDANTS ZEBRA TECHNOLOGIES
CORPORATION, ZIH CORP., AND ZEBRA TECHNOLOGIES
INTERNATIONAL, LLC
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