Infineon Technologies and its subsidiary Qimonda announced the conclusion of license agreements with Tessera Inc., San Jose, USA. Infineon, Qimonda and Tessera have also agreed to settle all outstanding litigation between them.
Under the terms of the license agreement, Infineon and Qimonda are granted a license to use a portfolio of Tessera patents relating to packaging for integrated circuits. Infineon and Qimonda will pay Tessera one-time license fees of $ 10 million and $40 million, respectively, during the fourth quarter of the 2006 financial year. In addition, Infineon and Qimonda will pay royalties over a six year period based on the volume of products sold. The combined royalties for Infineon and Qimonda are expected to amount to approximately $20 million to $30 million in the 2007 financial year. In the remaining years in which the royalty is payable, it will increase or decrease in proportion with the volume of products sold. A predominant portion of the royalties payable to Tessera is expected to be borne by Qimonda.
The license agreement will be effective until May 2012, unless Infineon and Qimonda elect to extend the agreement for additional five years. In case of an extension, royalties will be reduced to 50 percent of the current royalty rates.
Infineon Qimonda
