Infineon with legal action against Qimonda’s insolvency administrator

When Infineon’s memory business was carved out to form Qimonda AG in 2006, Infineon transferred, among other things, patents and other intellectual property rights to the Qimonda Group. At the same time, Infineon retained rights of use to these patents and other intellectual property rights, secured the same for its licensees, and reached agreements with the Qimonda Group on licenses to future intellectual property rights. Qimonda’s insolvency administrator, however, asserts that, as a result of the insolvency of Qimonda AG, these rights of use no longer apply. The purpose of the legal action is for the court to determine that Infineon’s and its licensees’ rights to the aforementioned intellectual property rights of the Qimonda Group remain valid. Prior to bringing this action, Infineon negotiated intensively with the insolvency administrator with a view to resolving the differences of opinion out of court. However, as these efforts have failed to produce an amicable settlement, it is now in the interests of Infineon and its licensees that the legal issues in dispute are settled in court through the legal action brought today. Besides claiming that the aforementioned rights of use no longer apply, the insolvency administrator, as noted in Infineon’s Annual Report for the 2010 fiscal year, has also sought to assert various claims against Infineon: In connection with (i) Infineon’s earlier position as a shareholder of Qimonda Dresden GmbH & Co. ohG, (ii) Qimonda’s sale of its interest in Inotera to Micron, and (iii) the allegation that Infineon utilized a previously formed shell company and “economically reestablished” that company through the transfer of the memory business; regarding the topic the administrator has, as reported, brought declaratory action against Infineon. Provisions formed by Infineon at December 31, 2010, in connection with the Qimonda insolvency total Euro 104 million. This figure includes a sum set aside by the company based on the positions taken in the settlement negotiations – a sum which the company will continue to increase in forthcoming quarters and which, from today’s perspective, is estimated to amount to a total future charge against earnings of Euro 80 million. Infineon will continue to defend itself resolutely against the claims being made and will draw, as necessary, on all legal remedies available. Nonetheless, the company remains open to finding a settlement with the insolvency administrator in respect of all of the claims he has advanced so that a conclusive solution can be found to all of the issues at stake.