Contact Information: CONTACT: Connie Hamblin 616/772-1800 EXCHANGE: NASDAQ Global Select Market SYMBOL: GNTX WEBSITE: www.gentex.com
Court Renders Opinion in Litigation Between Gentex and Muth
| Source: Gentex Corporation
ZEELAND, MI--(Marketwire - December 13, 2007) - The United States Bankruptcy Court in the
Eastern District of Wisconsin recently rendered its opinion in the case of
Debtors (Muth Mirror Systems, LLC, et al, hereafter "Muth") v. Gentex
Corporation (NASDAQ : GNTX ) ("Gentex") v. Debtors, et al.
(Case No. 06-25609-DVM).
The Court found that Muth's U.S. Patent No. 6,005,724 is invalid and
unenforceable, and that Gentex's Razor™ Turn Signal Mirror does not
infringe that patent. The Court also denied all but one of Muth's other
motions with prejudice, including its motion for an injunction, and its
claims for tortious interference with its business relationships. The sole
point of liability for Gentex was that the Court found that Gentex breached
one provision of the alliance agreement it has with Muth, and granted Muth
damages in the amount of approximately $2.9 million.
Gentex Senior Vice President Enoch Jen said that the Court's decision that
Gentex's new Razor exterior mirror product does not infringe Muth's patent
is good news for the Company moving forward, as it allows Gentex to provide
auto-dimming mirrors with Razor turn signals and other value-added features
in the exterior mirror. The Company has begun shipping non auto-dimming
exterior mirrors with a side blind zone feature in low volume.
"While we agree with the Court's other findings, we disagree with the
Court's decision that Gentex breached the alliance agreement and the award
of damages," said Gentex Senior Vice President Enoch Jen.
Gentex has continued to pay Muth royalties in accordance with the terms of
the agreement. Jen said that the agreement with Muth, which the Court has
previously determined was an exclusive agreement between the two parties,
remains in force through May 14, 2008. Gentex will continue to fulfill its
legal obligations until the agreement expires.
The Company will record a $2.9 million charge (pre-tax) in the fourth
quarter of 2007 as a component of operating expense on its income statement
in accordance with generally accepted accounting principles.
The Court is expected to enter its judgment in this case sometime during
the next 30 days. At that time, the Company will determine whether it
plans to appeal the finding with respect to a breach of the alliance
agreement and the award of damages. If Gentex decides to appeal, the judge
has already authorized Gentex to post a bond in lieu of immediate payment
of the $2.9 million until the appeal process is resolved.
"While we believe there is a good likelihood of success if Gentex appeals
the finding with respect to breach of the alliance agreement and damage
award, we will also consider all of the costs associated with an appeal
before we make that decision," concluded Jen.
Founded in 1974, Gentex Corporation (NASDAQ : GNTX ) is an international
company that provides high-quality products to the worldwide automotive
industry and North American fire protection market. Based in Zeeland,
Michigan, the Company develops, manufactures and markets interior and
exterior automatic-dimming automotive rearview mirrors that utilize
proprietary electrochromic technology to dim in proportion to the amount of
headlight glare from trailing vehicle headlamps. Many of the mirrors are
sold with advanced electronic features, and more than 96 percent of the
Company's revenues are derived from the sale of auto-dimming mirrors to
nearly every major automaker in the world.