UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 29, 2014
ITUS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 000-11254 | 11-2622630 |
(State or other jurisdictionof incorporation) | (CommissionFile Number) | (IRS Employer Identification No.) |
900 Walt Whitman Road, Melville, NY | 11747 |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (631) 549-5900
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01
Entry into a Material Definitive Agreement.
On December 29, 2014, ITUS Corporation (the Company) and AU Optronics Corporation (AUO) entered into a Settlement Agreement (the Settlement Agreement) and a Patent Assignment Agreement (the Patent Assignment Agreement and together with the Settlement Agreement, the Agreements) pursuant to which the Company received an aggregate of $9,000,000 from AUO. The Agreements were entered into to resolve a lawsuit filed by the Company against AUO, relating to the Companys patented ePaper® Electrophoretic Display, and Nano Field Emission Display (nFED) technologies.
Background
In May 2011, the Company entered into an Exclusive License Agreement (the EPD License Agreement) and a License Agreement (the Nano Display License Agreement) with AUO (together the AUO License Agreements). Under the EPD License Agreement, the Company provided AUO with an exclusive, non-transferable, worldwide license to its ePaper® Electrophoretic Display (EPD) patents and technology, in connection with AUO jointly developing EPD products with the Company. Under the Nano Display License Agreement, the Company provided AUO with a non-exclusive, non-transferable, worldwide license to its Nano Field Emission Display patents and technology, in connection with AUO jointly developing nFED products with the Company.
On January 28, 2013, the Company terminated the AUO License Agreements due to numerous alleged material and continual breaches of the agreements by AUO. On January 28, 2013, the Company also filed a lawsuit in the United States District Court for the Northern District of California against AUO and E Ink Corporation in connection with the AUO License Agreements, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent inducement, unjust enrichment, unfair business practices, and other charges (the AUO/E Ink Lawsuit). In June of 2013, the Company and AUO agreed to arbitrate the charges (the case against E Ink Corporation had been dismissed without prejudice) (the AUO/E Ink Arbitration).
The Agreements
Pursuant to the Settlement Agreement, AUO paid the Company $2,000,000 in U.S. currency, net of any Taiwanese withholding taxes. The Settlement Agreement further provides that:
·
the Company will dismiss the AUO/E Ink Lawsuit and AUO/E Ink Arbitration, with prejudice;
·
the AUO License Agreements are terminated;
·
AUO gives up all rights to the nFED Technology;
·
for a period of two years, the Company agrees not to initiate (whether on its own or through a third party) any patent infringement lawsuits against AUO or its affiliates alleging infringement by AUOs or AUOs affiliates' products or services, for patents owned or controlled by the Company as of the date of the Settlement Agreement. Any potential damages for patent infringement will toll uninterrupted during this two year period. The prohibition does not apply to patents acquired by the Company after the date of the Settlement Agreement; and
·
each of AUO and the Company mutually released each other from all claims that either may have against the other in connection with the AUO License Agreements, including any claims relating to the ePaper® Electrophoretic Display and nFED patents and technologies.
Pursuant to the Patent Assignment Agreement, AUO paid the Company $7,000,000 in U.S. currency, net of any Taiwanese withholding taxes in exchange for the Companys ePaper® Electrophoretic Display patent portfolio for which AUO was previously the exclusive licensee, consisting of:
·
10 active U.S. patents and 1 U.S. pending patent application; and
·
103 expired and/or abandoned U.S. and foreign patents and/or patent applications.
The Settlement Agreement and Patent Assignment Agreement are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and such documents are incorporated herein by reference. The foregoing is only a brief description of the material terms of the Agreements, does not purport to be a complete description of the rights and obligations of the parties thereunder, and is qualified in its entirety by reference to such exhibits.
Item 8.01
Other Events
On January 5, 2015, the Company issued a press release announcing the settlement with AUO and entry into the Agreements. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 | Settlement Agreement, dated as of December 29, 2014, between the Company and AU Optronics Corporation |
10.2 | Patent Assignment Agreement, dated as of December 29, 2014, between the Company and AU Optronics Corporation |
99.1 | Press Release dated January 5, 2015 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: January 5, 2015
ITUS CORPORATION
By:/s/ Robert A. Berman
Name: Robert A. Berman
Title: President and Chief Executive Officer
EXHIBIT INDEX
Exhibit No.
Description
10.1 | Settlement Agreement, dated as of December 29, 2014, between the Company and AU Optronics Corporation |
10.2 | Patent Assignment Agreement, dated as of December 29, 2014, between the Company and AU Optronics Corporation |
99.1 | Press Release dated January 5, 2015 |