Settlement of MPEG-2 litigation


 

TIDMHAR 
 
RNS Number : 3136B 
Harvard International PLC 
23 October 2009 
 

Harvard International plc 
23 October 2009 
 
FOR IMMEDIATE RELEASE 
 
 
HARVARD INTERNATIONAL PLC 
 
 
("Harvard" or the "Group") 
 
23 October 2009 
 
 
 
 
 
SETTLEMENT OF MPEG-2 LITIGATION 
 
 
 
 
 
The Board of Harvard announces that it has reached an out of court settlement of 
the MPEG-2 Litigation. 
 
 
In March 2008, certain companies which license their MPEG-2 essential patents 
through MPEG LA, LLC ("the Claimants") instigated legal proceedings against the 
Company in relation to alleged patent infringement in respect of the prior 
importation of two models of MPEG-2 enabled DVD players. In July 2009, the 
Claimants amended their claim to include all relevant products sold by the 
Group. 
 
 
The potential liability of the Group in respect of the litigation was 
unquantifiable but the Board believed that the largest foreseeable award against 
the Group in the UK was approximately US$8 million (c.GBP5 million) as outlined 
in the Circular to Shareholders dated 4 September 2009. Taking into account the 
legal expenses of the litigation, the amount of management time that was being 
committed and the uncertainty of any particular outcome,  the Board decided to 
seek a settlement. 
 
 
The following settlement has now been agreed. Harvard will make a payment of 
US$10 million by no later than 1 January 2010 in respect of all products sold 
prior to that date and has entered into a license agreement in respect of any 
sales of products requiring an MPEG-2 license from MPEG LA, LLC from 1 January 
2010. The settlement will cover Harvard and its subsidiaries on a global basis 
and not just in the UK. 
 
 
As at 31 March 2009 the Group had made a provision of GBP3 million against the 
expected cost of the MPEG-2 litigation. The provision had been made as part of 
the discontinued business of the Bush and Alba brands, which were disposed of in 
January 2009. A further charge of GBP4.7 million is expected to be incurred 
during the year ended 31 March 2010 in respect of the MPEG-2 litigation which 
will be treated as part of the discontinued business of the Bush and Alba 
brands. 
 
 
As at 30 June 2009 the Group had net cash balances of GBP20.6 million and on 30 
September the Group completed the sale of its surplus properties and its medical 
division for GBP10.0 million which was paid in cash at completion. The 
settlement of $10 million (c.GBP6.1 million) due by 1 January 2010 will be paid 
from the Group's existing cash resources. 
 
 
On 1 October 2009 the Company confirmed its intention to move the trading of its 
shares from the Official List to AIM. The settlement of the MPEG-2 Litigation 
will not impact on the move to AIM and the final day of dealings on the Official 
List is still expected to be 28 October 2009 and the first day of trading on AIM 
to be 29 October 2009. 
 
 
Commenting on the settlement of the MPEG-2 Litigation Bridget Blow, the Chairman 
of Harvard, stated; 
 
 
"Harvard has now resolved the MPEG position and can concentrate on building a 
profitable business in its chosen niches in the consumer electronics market. 
 
 
The Board will consider the level of funding that the on going business will 
require and if appropriate will consider returning surplus capital to 
shareholders" 
 
 
 
Enquiries: 
 
+-------------------------------------------------------+------------------------+ 
| Harvard International plc                             | Tel: 020 8238 7650     | 
+-------------------------------------------------------+------------------------+ 
| Bridget Blow, Chairman                                |                        | 
+-------------------------------------------------------+------------------------+ 
| Mike Ashley, Chief Executive Officer                  |                        | 
+-------------------------------------------------------+------------------------+ 
|                                                       |                        | 
+-------------------------------------------------------+------------------------+ 
| College Hill                                          | Tel: 020 7457 2020     | 
+-------------------------------------------------------+------------------------+ 
| Gareth David                                          |                        | 
+-------------------------------------------------------+------------------------+ 
 
 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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