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Gentex Settles Litigation With Muth
ZEELAND — Gentex Corp. has announced that it has entered into a "settlement and release agreement and covenants not to sue" agreement with K.W. Muth Co. of Wisconsin, subject to Bankruptcy Court approval. The document was made publicly available late on Feb. 19 in a filing with the U.S. Bankruptcy Court for the Eastern District of Wisconsin.
In 2006, Gentex filed suit to invalidate some of Muth's patents on a mirror incorporating a turn signal indicator. Muth countersued Gentex in a Wisconsin court, charging patent infringement, and later, Muth turned to the courts for bankruptcy protection.
Per the agreement, the parties will settle a court judgment against Gentex for damages related to breach of contract at a reduced amount of $2,550,000, compared with the original $2,885,000 judgment. In addition, under the agreement, the parties agreed to grant each other a 10-year covenant to not sue for each company's core business, to release each other from all claims that occurred in the past, and to not appeal the court's rulings.
Once the agreement is approved by the Bankruptcy Court, the adjustment to the original judgment for damages will be reflected in Gentex financial results for the first quarter of 2008. The original judgment was reflected in the Gentex financials for the year ended Dec. 31, 2007. Gentex anticipates that the Bankruptcy Court will approve the agreement.
"We are very pleased that we were able to come to a mutually beneficial agreement with Muth on this litigation settlement, and to put this current litigation behind us and avoid future litigation," said Gentex Chairman of the Board and CEO Fred Bauer. "Muth will now have access shortly to the judgment funds as opposed to waiting for two to three years if this case had gone through the appeals process. This should enable Muth to more rapidly emerge from bankruptcy.
"From Gentex's perspective, we are pleased to be able to further broaden our mirror-based product offerings without the threat of being sued on Muth's patents for a period of 10 years. Additionally, we obviously are pleased to have negotiated a reduced amount that will be required to be paid to Muth," concluded Bauer.