Proxim Corp. recently reached a settlement and cross-licensing agreement with Symbol Technologies Inc. that resolves all outstanding litigation between the two wireless companies.
Proxim Corp . recently reached a settlement and cross-licensing agreement with Symbol Technologies Inc. that resolves all outstanding litigation between the two wireless companies. Proxim manufactures wireless networking equipment for Wi-Fi and broadband wireless networks.
As part of their agreement, Proxim has agreed to pay $22.75 million to Symbol during the next two and a half years, beginning with the quarter that ended on Sept. 30, 2004. These payments will be made in $2.5 million installments per quarter in each of the agreement period’s first eight quarters, then reduced to $1.5 million for the ninth quarter and $1.25 million for the 10th quarter.
Proxim also has agreed to pay Symbol a 2% royalty on future sales of certain wireless LAN products. The two companies have cross-licensed some patents, and Proxim has assigned certain intellectual property to Symbol. Finally, Proxim and Symbol have agreed not to sue each other over patent infringement involving networking products through September 2009.
As a result of the agreement, Proxim anticipates that it will record a one-time, non-cash gain of approximately $8 million during the quarter that ended on Sept. 30, 2004. This gain is the difference between the net present value of the $22.75 million settlement, and accrued liability of $28.7 million, which was recorded on the firm’s balance sheet as of July 2, 2004.
“We’re pleased to have this matter finally resolved and behind Proxim,” says Frank Plastina, Proxim’s chairman and CEO. “The most important result of this agreement is that Proxim can now focus solely on taking full advantage of its unique market position in both the WiFi and emerging WiMAX markets. We also believe this agreement is an important step toward what we hope is joint opportunity and cooperation between Proxim and Symbol.”
—Jim Montague, news editor, Control Engineering, [email protected]
