Terms of Prometic/GE settlement -- from Prometic SEDAR financial statement for the quarter and the nine months ended on September 30, 2016
- (In thousands of Canadian dollars, except for per share amounts) (Unaudited)
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'13. Settlement of litigation
During the year ended December 31, 2012, the Corporation was served with a lawsuit in the Federal Court of Canada (Court) relating to a claim for infringement of two Canadian issued patents held by a third party plaintiff, GE Healthcare Biosciences AB (“GE”). The Corporation filed a statement of defence on the infringement claims, in addition to a counterclaim requesting that the Court declare both patents invalid and unenforceable.
The Corporation and GE entered into a settlement and license agreement on October 25, 2016 to mutually discontinue all past claims and counterclaims between the parties and to commercialize the underlying technologies over the term of the license, which shall not extend, on a country-by-country basis, beyond October 2021 (the “Term”).
Under the agreement, ProMetic shall pay GE an aggregate amount of $1,000 between October 25, 2016 and October 25, 2020 in consideration thereof, Minimum Annual Royalty (“MAR”) payments totaling $587 over the Term and a 2% net sales royalty on sales of certain ProMetic bioseparation products to third parties and affiliates during the Term; the royalties being creditable against the MAR. The net sales royalty expense will be recorded as such product sales are incurred. As of September 30, 2016, the Corporation recorded an expense of $913 representing the present value of the $1,000 fee determined using a market interest rate of 15.84%, under administration expenses in the consolidated statement of operations. '
Jim |
