Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 7 of 39
`
`Case 3:07-cv-01405-BR Document 346
`
`Filed 05/11/2009
`
`Page 1 of 5
`
`Robert A. Shlachter, OSB No. 911718
`Email: rshlachter@stollberne.com
`Timothy S. DeJong, OSB No. 940662
`Email: tdejong@stollberne.com
`Jacob S. Gill, OSB No. 033238
`Email: jgill@stollberne.com
`STOLL STOLL BERNE LOKTING & SHLACHTER P.C.
`209 S. W. Oak Street, Fifth Floor
`Portland, Oregon 97204
`Telephone: (503) 227-1600
`Facsimile: (503) 227-6840
`
`Attorneys for Plaintiffs
`
`James L. Phillips, OSB No. 070307
`jarnes.phillips@millernash.com
`Kieran J. Curley, OSB No. 012414
`kieran.curley@millernash.com
`Elisa J. Dozono, OSB No. 063150
`elisa.dozono@millernash.com
`MILLER NASH LLP
`3400 U.S. Bancorp Tower
`111 S.W. Fifth Avenue
`Portland,Oregon 97204-3699
`Telephone: (503) 224-5858
`Facsimile: (503) 224-0155
`
`Bruce A. Kaser, WSBA No. 13532
`bruce@vantagelaw.net
`VANTAGE LAW PLLC
`355 N.W. Gilman Boulevard, Suite 203
`Issaquah, Washington 98027
`Telephone: (425) 391-8741
`Facsimile: (425) 381-8754
`
`Attorneys for Defendant
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF OREGON
`
`VANGUARD PRODUCTS GROUP, INC. a
`Florida corporation and TELEFONlX, INC.,
`an Illinois corporation,
`
`Plaintiffs,
`
`v.
`
`MERCHANDISING TECHNOLOGIES,
`INC. an Oregon corporation,
`
`Defendant.
`
`{SSBLS Main DocwnenlS\7748\001\00205572-3)
`
`Case No. 3:07-CV-1405 BR
`
`FINAL JUDGMENT BY CONSENT
`AND PERMANENT INJUNCTION
`
`Exhibit A
`Page I of7
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 1
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 8 of 39
`
`Case 3:07-cv-01405-BR Document 346
`
`Filed 05/11/2009
`
`Page 2 of 5
`
`Based on the record in this case, the parties' resolution of their differences in accordance
`
`with a fully executed settlement agreement, and the parties' consent to the entry of the following
`
`judgment:
`
`IT IS HEREBY ORDERED, ADJUDGED, and DECREED that:
`
`1.
`
`This cow1: has jurisdiction over the parties to this action and over the
`
`subject matter of this action.
`
`2.
`
`This Final Judgment by Consent and Permanent Injunction is subject to
`
`the terms of the Confidential Settlement Agreement dated as of May 11, 2009, entered into by
`
`and between plaintiffs Tclefonix, Inc. ("Telcfonix") and Vanguard Products Group, Inc.
`
`("Vanguard"), on the one hand (collectively, "Plaintiffs"), and defendant Merchandising
`
`Technologies, Inc. ("MTI"), on the other hand (the "Settlement Agreement").
`
`3.
`
`Telefonix is the owner ofU. S. Patent No. 6,799,994, and Vanguard is the
`
`exclusive licensee ofTelefonix's rights under U. S, Patent No. 6,799,994.
`
`4.
`
`The claims ofU. S. Patent No. 6,799,994 are valid and enforceable as to
`
`MTI, Vanguard and Telefonix.
`
`5.
`
`In its Amended Opinion and Order dated January 16, 2009, this Court
`
`adjudged that MTI directly infringed (i) each of claims 1, 2 and 4-11 of United. States Patent No.
`
`6,799,994 (the '"994 patent") by making, using, selling, offering for sale and/or importing into
`
`the United States Freedom Universal, Freedom A, Freedom A+, and Freedom C products; and
`
`(ii) each of claims 1, 2, 4 and 6-11 of the '994 patent by making, using, selling, offering for sale
`
`and/or importing into the United States Freedom LP products. Collectively, all of the Freedom
`
`products identified in this Paragraph 5 are referred to hereafter as the "Infringing Products."
`
`6.
`
`Except for a limited transition period and service period provided in the
`
`Settlement Agreement, MTI and its officers, agents, servants, employees, affiliates, successors,
`
`Page 1-
`
`FINAL JUDGMENT BY CONSENT AND PERMANENT INJUNCTION
`
`Consent Judgment
`
`Exhibit A
`Page 2 of7
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 2
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 9 of 39
`
`Case 3:07-cv-01405-BR Document 346
`
`Filed 05/11/2009
`
`Page 3 of 5
`
`and assigns, from the date of this Final Judgment to and including March 16, 2018, are
`
`permanently enjoined from infringing, contributing to the infringement of, or actively inducing
`
`the infringement of, any of the claims of U.S. Patent No. 6,799,994, by (i) making, using, selling,
`
`offering for sale, or importing into the United States any Infringing Products that were the
`
`subject of this action or any product that is not more than colorably different therefrom,
`
`regardless of the trade name, model number, or other product designation under which any such
`
`product is made, used, sold, or offered for sale, or imported into the United States (collectively,
`
`the "Enjoined Products"); or (ii) selling, offering for sale or delivering any component parts
`
`(Smart Cables, reels or retractors, pucks or posts) for use in combination with or as part of any
`
`Enjoined Product.
`
`7.
`
`Vanguard and Telefonix acknowledge that MTI may be able to design
`
`new and/or modify existing Freedom products so that they do not infringe and, therefore, are not
`
`Enjoined Products. This injunction does not apply to:
`
`a.
`
`b.
`
`MTI products with coiled cord and no reel; and
`
`Freedom LP3, with a conductor-less mechanical retractor,
`
`both as shown in MTI's 2Q09 Virtual Store Tour Video and available at www.mti(cid:173)
`
`interactive.com as of May 8,. 2009,
`
`8.
`
`Except as otherwise provided in this Final Judgment by Consent and
`
`Permanent Injunction, (i) this action, including all claims of Plaintiffs against MTI and all
`
`counterclaims ofMTI against plaintiffs, is hereby dismissed with prejudice; and (ii) the previous
`
`dismissal of a prior, related action captioned Merchandising Technologies, Inc. v. Telefonix, Inc.
`
`et al., District of Oregon Case No. 3:05-CV-1195 BR, shall be considered dismissed with
`
`prejudice.
`
`Page 2 -
`
`FINAL JUDGMENT BY CONSENT AND PERMANENT INJUNCTION
`
`Consent Judgment
`
`Exhibit A
`Page 3 of7
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 3
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 10 of 39
`
`Case 3:07-cv-01405-BR Document 346
`
`Filed 05/11/2009
`
`Page 4 of 5
`
`9.
`
`This Court shall retain continuing subject matter and personal jurisdiction
`
`for the purposes of construing or enforcing the tenns oft.bis Final Judgment by Consent and
`
`Permanent Injunction, and the Settlement Agreement between the parties, or for resolving any
`
`other dispute arising hereunder.
`
`10.
`
`11.
`
`Each party shall bear its own attorney fees, costs and disbursements.
`
`There shall be no appeal from this Final Judgment by Consent and
`
`Permanent hijunction,
`
`f-/
`Dated this l.L day of May, 2009.
`~ United States District Judge
`
`AGREED TO:
`
`By: --+--Ml!P!----+-1--------(cid:173)
`R- beft A. Shlach r, OSB No. 911718
`STOLL STOLL BERNE LOKTING &
`SHLACHTER P.C.
`209 S.W. Oak Street, Fifth Floor
`Portland, Oregon 97204
`Email: rshlachter@stollbeme.com
`Telephone: (503) 22 7-1600
`Facsimile: (503) 227-6840
`
`Attorneys for Plaintiffs Vanguard
`Products Group, Inc., and Telefonix,
`Inc.
`
`MILLER NASH LLP
`
`By: -----1+-~>-'d--------(cid:173)
`James
`. P · ips, OSB No, 070307
`MILLE NASH LLP
`3400 U.S. Bancorp Tower
`111 S.W. Fifth Avenue
`Portland, Oregon 97204-3699
`Email: james.phillips@millernash.com
`Telephone: (503) 224-5858
`Facsimile: (503) 224-0155
`
`-and(cid:173)
`
`V ANb LA w PLLC
`By :~ c~
`
`Bruce A. Kaser, WSBA No. 13532
`VANTAGELAWPLLC
`355 N.W. Gihnan Boulevard, Suite 203
`Issaquah, Washington 98027
`Email: bruce@vantagelaw.net
`Telephone: (425) 391-8741
`
`Page 3 -
`
`Consent Judgment
`
`FINAL JUDGMENT BY CONSENT AND PERMANENT INJUNCTION
`Exhibit A
`Page 4 of7
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 4
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 11 of 39
`
`Case 3:07-cv-01405-BR Document 346
`
`Filed 05/11/2009
`
`Page 5 of 5
`
`Facsimile: (425) 381-8754
`
`Attorneys for Defendant
`Merchandising Technologies, Inc.
`
`Page 4-
`
`Consent Judgment
`
`FINAL JUDGMENT BY CONSENT AND PERMANENT INJUNCTION
`Exhibit A
`Page 5 of7
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 5
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 12 of 39
`Page 1 of 2
`
`Anne Buck
`
`From:
`info@ord.uscourts.gov
`Sent:
`Tuesday, May 12, 2009 11 :30 AM
`To:
`nobody@ord.uscourts.gov
`Subject: Activity in Case 3:07-cv-01405-BR Vanguard Products Group, Inc. et al v. Merchandising
`Technologies, inc. Order on motion for judgment
`
`by the CM/EGF "''""·,·,.,.,,., Phlase DO MOT
`Thi[+ is an tmtomatic tMnail me,;sanc
`RESPOND to ttlis e••rnail bet:aum,i the rnail box is 1.matti2:mdet:L
`***NOTE TO PUBLIC ACCESS USERS*** There is no charge for viewing opinions.
`
`U.S. District Court
`
`District of Oregon
`
`Notice of Electronic Filing
`
`The following transaction was entered on 5/12/2009 at 11 :29 AM PDT and filed on 5/11/2009
`Case Name:
`Vanguard Products Group, Inc. et al v. Merchandising Technologies, Inc.
`Case Number:
`3:07-cv-1405
`Filer:
`Document Number: 346
`
`Docket Text:
`FINAL JUDGMENT BY CONSENT AND PERMANENT INJUNCTION: [345]. (see judgment)
`Signed on 5/11/09 by Judge Anna J. Brown. (ljl)
`
`3:07-cv-1405 Notice has been electronically mailed to:
`
`Alan T. McCollom
`
`alan@techlaw.com, litigationdocketing@techlaw.com
`
`Bruce A. Kaser
`
`bruce@vantagelaw.net, paulsewell@vantagelaw.net
`
`Elisa J. Dozono
`
`elisa.dozono@millernash.com, sandy.hanson@millernash.com
`
`Hillary A. Brooks
`
`hillary@techlaw.com, litigationdocketing@techlaw.com
`
`Jacob S. Gill
`
`jgill@ssbls.com
`
`James L. Phillips
`
`james.phillips@millernash.com, kristin.martinezclark@millernash.com
`
`Kieran J. Curley
`kieran.curley@millernash.com, doris.dickson@millernash.com,
`elise.brickner~schulz@millernash.com, teri.cochran@millernash.com
`
`Robert A. Shlachter
`
`rshlachter@stollberne.com, tkim@stollberne.com
`
`5/12/2009
`
`Exhibit A
`Page 6 of7
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 6
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 13 of 39
`Page 2 of 2
`
`Timothy S. DeJong
`
`tdejong@ssbls.com, abuck@ssbls.com
`
`3:07-cv-1405 Notice will not be electronically mailed to:
`
`Lara V. Hirshfeld
`Neal, Gerber & Eisenberg
`Two North LaSalle Street, Suite 2200
`Chicago, IL 60602
`
`Robert Edward Browne
`Neal, Gerber & Eisenberg
`Two North LaSalle Street, Suite 2200
`Chicago, IL 60602
`
`Thomas C. McDonough
`Neal, Gerber & Eisenberg
`Two North LaSalle Street, Suite 2200
`Chicago, IL 60602
`
`The following document(s) are associated with this transaction:
`
`Document description:Main Document
`Original filename:Not Available
`Electronic document Stamp:
`[STAMP ordStamp_lD=875559790 [Date=5/12/2009] [FileNumber=2825863-0] [
`277fd99c0647c97de98483f5f17b1 ded5be99aa87d426d07b82569502ef5d6f1 e22436
`39968cd3b6fafc8e40e25a 70ac25918b98542d92db 7ff82024b8772e121]
`
`5/12/2009
`
`Exhibit A
`Page 7 of7
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 7
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 14 of 39
`
`CONFIDENTIAL SETTLEMENT AGREEMENT
`
`This Settlement Agreement ("Agreement") is made and entered into by and between
`Telefonix, Inc. ("Telefonix"); Vanguard Products Gmup, Inc, ("Vanguard"); and. Merchandising
`Technologies, Inc. ("MTI"). Telefonix, Vanguard and MTI shall be referred to herein
`collectively as the "Parties" or individually as a "Party," The Effective Date of this Agreement
`is May 11, 2009.
`
`WHEREAS the foregoing are parties lo a civil action en1i~[ed Vanguard Products Group,
`et al v. Merchandising Technologies, Inc., Case No. 07-1450-BR (the "Litigation"), in the United
`States District Court for the District of Oregon (tl1e "District of Oregon");
`
`WHEREAS the District of Oregon fmmd by Amended Opinion and Order [docket #245]
`dated January 16, 2009, that MTI's Fteedom Universal, Freedom A, Fteedom A+, and Freedom
`C products directly infringe each of claims I, 2 and 4-11 of United States Patent 6,799,994 (the
`'" 994 patent"), and that MTI' s Freedom LP products directly infringe each of claims 1, 2, 4 and
`6-11 of the '994 patent (collectively, the "Infringing Products"), and a trial is scheduled for May
`18, 2009, on certain remaining issues;
`
`WHEREAS the Parties desire to resolve as between them all claims and defenses asserted
`and/or pe11di11g in the f ,itigation;
`
`NOW, THEREFORE, in consideration of the foregoing and in consideration of the
`promises and mutual undertakings set forth helow, the Parties agree as follows:
`
`l.
`
`Termination of Litigation
`
`The Parties agree that the Litigation shall be terminated pursuant to a Consent Judgment
`in the form attached hereto as Exhibit A, Concurrently with the execution of this Agreement, the
`Parties shall execute and deliver to Stoll Stoll Berne Lokting & Shlachter P.C. ("Telefonix and
`Vanguard Counsel") the Consent Judgment, and the Joint Motion for Entry of Consent Judgment
`attached hereto as Exhibit B, for filing with the court clerk for the District of Oregon. No Party
`shall take any action to oppose entry of the Ccusent J udgrnent or to vacate or modify the Consent
`Judgment, The Parties agree that no Party has any right of appeal, and no appeals will be taken
`by any Party from such Consent hidgment.
`
`2.
`
`Agreement Not to Bell Products
`
`2.1
`Except as otherwise agreed in Section 4 below, MTI agrees not to (a)
`manufacturn, use, sell, offer for sale, deliver or import into the United States, from the Effective
`Date to and iJJcluding March 16, 2018, any Infringing Products that were the subject of this
`action or any product that is not more than colorably different therefrom, regardless of the trade
`name, model number, or other product designation under which any such product is made, used,
`sold or offered for sale, or imported into the United States (collectively, the "Enjoined
`
`1 ~ CONFIDENTIAL SETTLElVIENT AGREEMENT
`{SSBLS Main Doornnonts\7748\00110020$574-7 J
`
`ExhibitB
`Page 1 of26
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 8
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 15 of 39
`
`Products"); or (b) sell, offer for sale or deliver any component parts (Smart Cables, reels or
`retractors, pucks or posts) for use in combination -with or as part of any Enjoined Product.
`
`During the Transition and Service Periods only, Vanguard agrees not to
`2.2
`offer or sell replacement component parts (Smart Cables, retractors, pucks or posts) for use with
`Infringing Products installed at MTI's customers as of May 11, 2009. For example, Vanguard
`will not sell Vanguard-manufactured power couplers manufacti:red to tbe specifications of an
`MTI Smart Cahle for use with a Freedom Universal Unihase assembly which had heen installed
`at Best Buy prior to May 11, 2009. This provision shall not apply to Vanguard's existing
`customers for power couplers compatible with MTI Freedom products, e.g., customers to whom
`Vanguard has sold these products prior to May 11, 2009. Nothing in this Agreement shall
`prohibit Va11guard from offering or selling any product or component part to any customer for
`any new installation or retrofit. Other than as specified in this provision 2.2, nothing in this
`Agreement shall prohibit Vanguard frnm offering or selling any current 01· future Vanguard
`product or component patt
`
`The restrictions in provision 2.2 above end on the earlier of (a) expiration
`2.3
`of the Tnmsition and Service Periods or (b) termination of s11ch Periods due to default hy MTI.
`
`3.
`
`Sale ofNew Products
`
`Vanguard and Telefoiux aclrnowlcdgo that MTI may be able to design new and/or modify
`existing Freedom products so that they do not infringe and, therefore, are not Enjoined Products.
`For example, Telefonix and Vanguard agree that MTl may sell the following products: (1)
`freedom Universal 2.0, with coiled cord and no reel, and (2) Freedom LP3, with a conductor(cid:173)
`less mechanical retractor, both as shown in MTI's 2009 Virtual Store Tom Video m1d available
`at www.mti-intcractive.com as of May 8, 2009 (collectively, tho "Now Products"). 111is Section
`is not intended as a limitation as to whether any other new products are Enjoined Products or not.
`
`4.
`
`Transition m1d Service Periods
`
`To f<1dlitate MTI's transition from the Infringing Products to new
`4.1
`products, Telefonix and Vanguard agree that MTI may utilize the following parts associated with
`Infringing Products: Smart Cables, retrnctors, puck~ and po8ls (collectively "Transition and
`Service Parts"), limited as follows:
`
`For existing customer commitments for new store openings m1d
`a.
`retrofits during the time period from May 11, 2009, through December 31, 2009 (the "Transition
`Period"); and
`
`For ,;ervice ofinfringing Product8 during the time period from
`b.
`May 11, 2009 through December 31, 2010 (the "Service Period").
`
`4.2
`
`Time is of the essence of this Agreement.
`
`2 - CONFIDENTIAL SETTLEMENT AGREEMENT
`
`(SSBLS Maill Documents\7748\001\00205574•7}
`
`Exhibit B
`Page 2 of26
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 9
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 16 of 39
`
`4.2.1 If MTI fails to timely make the initial Past Damages Payment by
`May 15, 2009, 01· ifMTI breaches section 4. l(a) by using, selling or shipping Transition and
`Service Parts after December 31, 2009 (except as othetwise allowed under 4.1 (b)), Vanguard
`and Telefonix may, at their option and in addition to any other remedies which they may have,
`immediately terminate any of the remaining Transition and Service Periods upon notice to MTI.
`
`4.2.2 IfMTI fails to timely make the second or third of the Past Damages
`Payments (including accrued interest) or any of the Transition and Service Payments, Vanguard
`and Telefonix may, at their option and in addition to any othee remedies which they may have,
`te1minate any of the remaining Transition and Service Pel'iods if, within five (5) business days
`after written notice of such failme has been provided to MTI, MTI has not made payment.
`
`4.3 Within thirty (30) days of this Agreement, MTI agrees to provide to
`Telefonix and Vanguard a parts list with itemized parts numbers to identify and accom1t for
`Transition and Service Paits. MTI shall update the parts list and provide an updated parts list
`with each Transition and Service Payment.
`
`5,
`
`Payment for Past Damages
`
`5.1 MTI shall pay Vanguard and Telefonix the total amom1t of Three Million
`Dollars ($3,000,000) as payment for damages to the Patent in Suit and to Vanguard's and
`Telefonix's business goodwill and to settle all damages alleged by Vanguard and Telefonix to
`have occurred before May 11, 2009 (the "Past Damages Payment").
`
`To facilitate and secure payment of the Past Damages Payment, MTI shall
`5.2
`execute and deliver to Va11guard and Telefanix concurrently with execution of this Agreement a
`Confession of Judgment in the form attached hereto as Exhibit C. So long as there has been no
`event of default of the payment terms for the Past Damages Payment set forth below, Vanguard
`and Telefonix will not file the Confession of Judgment. If MTI fails to timely make 111e First
`Past Damages Payment, Vanguard and Telefonix may at their' option and i11 addition to any other
`remedies which they may have immediately file the Confession of Judgment upon notice to MTI,
`and there shall be no cure period. IfMTI fails to timely make the second or third of the Past
`Damages Payments (including accrued interest), Vanguard and Telefonix may at theh option and
`in addition to any other remedies which they may have, file the Confession of Judgment if,
`within five (5) business days after written notice of such failure has been pnwided to MTI, MTI
`has not made payment. MTI shall not oppose the filing and entry of the Confession of Judgment
`ifit is filed in accordance with this Section 5.
`
`The Past Damages Payment shall be payable to Telcfonix and Vanguard in
`5.3
`three installments, as follows:
`
`a.
`
`$1,500,000 on or before May 15, 2009.
`
`$750,000, together with accrned simple interest on the 1mpaid
`b.
`_principal balance of the Past Damages Payment at the rate of nine percent (9%) per ammm, all to
`be paid on or before May 11, 201 0; and
`
`3 - CONFIDENTIAL SETTLEMENT AGRRRMENT
`
`{SSBLS MainDocmnents\7748\001 \00205574-7}
`
`ExhibitB
`Page 3 of26
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 10
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 17 of 39
`
`$750,000, together with accrued simple interest on the unpaid
`c.
`principal balance of the Past Damages Payment at the rate of nine percent (9%) per rumum, all
`to be paid on or before May 11, 2011.
`
`Failme to pay any of the above Past Damages Payments when due shall
`5.4
`cause the entire unpaid balance and accrued interest to be immediately due and owing.
`
`Each installment shall be delivered by wire transfer to Vanguard Products
`5.5
`Group, Inc,, as follows:
`
`SunTrust Ba11k
`401 E. Jackson St.
`Tampa, Florida 33602
`Vanguard Products Group, Inc.
`Routing #0610000104
`Acvt #1000020078274
`
`In any action or proceeding to enforce the Confession of Judgment, MTI
`5.6
`will be entitled to a credit for all Past Damages Payments made, if any, including interest.
`
`6,
`
`Transition and Service Payments and Audits
`
`6.1 MTI shall pay Vanguard and Telefonix the following amom1ts for the
`following Transition and Service Parts utilized during the Transition Period and Service Period;
`
`a.
`
`b.
`
`c.
`
`d.
`
`$3.00 per Smart Cable;
`
`$3.00 per rettactor;
`
`$4.50 per puck; and
`
`$1.50 per post
`
`Transition and Service Payments shall be made quarterly. Payments shall
`6.2
`be due within thirty (30) calendar days after the end of each quaiter. The first quarterly payment
`shall be a partial quarterly payment for the period commench1g May 11, 2009 and ending Jmie
`30, 2009, and shall be due on or before July 30, 2009.
`
`Each Tra1isitio11 and Service Payment shall be accompanied by a rep01i,
`6.3
`itemizing the Transition and Service Parts (net of returns and/or warranties) utilized during the
`quarter by category, under the following headings:
`
`Part Number Used Returns Wmrnnties Net Parts
`
`$$/Pmt Total Due
`
`4 - CONFIDENTIAL SETTLEMENT AGREEMENT
`
`{SSBLS Main Documcnls\7748\001\00'!,05574•7}
`
`ExhibitB
`Page 4 of26
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 11
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 18 of 39
`
`6.4 MTI shall keep true and accurate records and books of accmmt containing
`all data necessary for the determination of all Transition and Service Payments payable
`hereunder. MTI 8ha11 permit a certified public accountant designated by Vanguard or Telefonix
`to examine the books of account and information of MTI, at the sole expense of Vanguard and
`Telefonix, sufficient for Vanguard and Telefonix to verify the accuracy of the reports required by
`this Agreement, at any time during regular working hours but not more than twice amrnally. Any
`additional amounts clue as a result of such examination shall be paid within fifteen (15) days of
`notification thereof by Vanguard or Telefonix. Any excess payments identified as a t·esult of
`such examination shall be reftmcled by MTI withln fifteen (15) days of notification thereof by
`Vanguard or Telefonix. If any such examination reveals an underpayment of more than ten
`percent (10%), then MTI shall pay the amount of the fee chm-ged by such accountant for
`conducting such examination, together wiih interest on the underpay':llent at the rate of len
`percent (10%) per ammm from the date of the underpayment.
`
`7.
`
`Mutual Release
`
`Effective upon delivery of the first installment of the Past Damages
`7.1
`Payment ($1,500,000), Vanguard and Telefonix release MTI and its present and former officers,
`directors, employees, shareholders, attorneys and customers from all liability, claims, causes of
`action, and damages arising from any and all of their acts, omissions and conduct, known or
`unknown, occurring before the Effective Date, including without limitation all claims bmught in
`the Litigation or thal could have been brought in the Litigation. However, ~uch release shall. not
`apply to the obligations of the Parties unde1· this Agreement, Joint Motion for Entry of Consent
`Judgment, the ConRent Judgment or the Confession of Judgment (collectively, the "Settlement
`Documents). The release of customers is limited to and only in connection with Infringing
`Products obtained by customers directly or indirectly from MTI before the Effective Date.
`
`7 .2
`Effective upon delivery of the first installment of the :Past Damages
`Payment, MTI releases Vanguard and Telefonix and their present and former officers, directors,
`employees, shareholders and attorneys from all liability, claims, causes of action, and darrrages
`arising from any and all of his acts, omissions and conduct, known or unknown, occurring before
`the Effective Date, including without limitation all claims brought in the Litigation or that could
`have been brought in the Litigation. However, suc:1 release shall not apply to the obligations of
`the Parties under any of the Settlement Documents,
`
`8.
`
`Time Limits for Performance
`
`8.1
`The Paities shall execllte and deliver the (a) Joint Motion for Entry of
`Consent Judgment and (b) Consent Judgment to Telefonix and Vanguard Counsel concurrently
`with the execution and delivery of this Agreement, and in any event no later the start of the May
`11, 2009 pretdal conference.
`
`The Parties agree that the presently scheduled trial date for the Litigation
`8.2
`shall be vacated only upon delivery of the folly executed Settlement Documents and entry by the
`Court of the Consent Judgment.
`
`5 ~ CONJnUENTIAL SETTLEMENT AGREEMENT
`
`(SSBLS Malt\ Dt)Cuments\7748\00l\00205574-7)
`
`ExhibitB
`Page 5 of26
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 12
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 19 of 39
`
`Upon execution of the Settlement Documents, Vanguard and Telefonix
`8.3
`shall cause the Joint Motion for Entry of Consent Judgment and the Consent Judgment to be filed
`with the comt clerk for the District of Oregon.
`
`9.
`
`Validity and Enforceability of the '994 Patent
`
`9.1 MTI shall talce no action to aid, induce, assign, or participate in, directly or
`indirectly, any action contesting the validity and/or enforceability of the '994 patent in any court
`or other tribunal, including without limitation any litigation, ·declaratory judgment action, or any
`request in the United States Patent and Trademark Office ("PTO") for the reexamination or
`cancellation of the '994 patent.
`
`9.2 MTI agrees not to asse1t and hereby waives and is estopped from asserting
`any and all defenses of invalidity and/or unenforceability of the '994 patent in any futlU'e
`litigation, arbitration, or other proceeding, including any proceeding before the PTO. This
`agreement, waiver and estoppel apply to any litigation, arbitration, or other proceeding involving
`any present or future product made, used, sold, or imported into the United States by MTI or any
`of its assignees, successors, or those who act for or in concert with any of them at any time
`during the life of the '994 patent.
`
`The Parties acknowledge that MTI previously initiated-an inter partes re-
`9.3
`examination before the PTO. MTI agrees to cooperate with Telefonix to withdraw or terminate
`the re-examination. Wi1l1in three (3) business days of entry of the Consent Judgment, MTI shall
`file the Consent Judgment with the PTO, together with a written request to withdraw or terminate
`the request for an inter part es re-examination. If the PTO does not allow MTI to withdraw its
`request and does not terminate the re-examination, MTI agrees to take no furti1er action in
`connection with the re-examination, including making any response to any inquiry, action,
`request, or filing by the PTO, Telefonix, Paul Burke, or any other pers011.
`
`9.4
`The Settlement Documents shall be enforceable by and binding upon the
`Parties, and MTI shall be obligated to make all payments pursuant to the Settlement Documents,
`including the Transition and Service Payments, as they become due whetber or not any oftht:
`claims of the '99'1 patent are (a) held invalid and/or unenforceable in any p1·oceeding anywhere
`hereafter, including proceedings involving third parties, or (b) reissued by the Patent Office.
`
`If MTI is not in violation of sections 9 .1, 9 .2 and 9. 3, m1d a third party
`9 .5
`unconnected to MTI is successful in invalidating each of claims I, 2, and 4-11 of the '994 patent,
`then the injunction in the Consent Judgment and the restrictions on MTI in section 2.1 shall be
`dissolved and elinrinatcd on the later of:
`
`.(a) the date such detenninatlon of invalidity of all of clairni:; 1, 2, 4-11 of
`the '994 patent becomes final (i.e., after the exhaustion of all appeals from any such
`determination), and
`
`(b) 12/31/14.
`
`6 - CO~FIDENTIAL SETTLEMENT AGREEMENT
`
`{SSBLS Mnin Documents\7748\001\00205~74-7}
`
`Exhibit B
`Page 6 of26
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 13
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 20 of 39
`
`10.
`
`No License
`
`The Parties agree tl1at this Agreement does not create or constitute a license and that no
`license is intended.
`
`11.
`
`Event of Breach or Default
`
`11.1. Time is of the essence of this Agreement. In the event of any breach by
`any of the Parties or default under any of the Settlement Documents, the non-offending Party
`may immediately seek any and all appropriate rnmedies, both legal and equitable.
`
`11.2 Except as otherwise provided in Section 4.2.1 and 5.2 (regarding specific
`i11stru1ces where there shall be 110 cure period), default may be declared and remedies pursued in
`connection with any default if, within five (5) days of receipt of written notice, the breaching
`party has nol cured lhe breach.
`
`11.3 Notices to be given to the Parties under this Agreement shall be sent by
`certified mail addressed as follows:
`
`Merchandising Technologies, Inc.
`Attn: Mike Cook
`1050 N.W. 229th Avenue
`Hillsboro, OR 97124
`
`With a copy to:
`
`Attn: Roger Rowe
`1050 N.W. 229111 Avenue
`Hillsboro, OR 97124
`
`Vanguard Products Group, Inc.
`Attn: Chris Kelsch
`720 Brooker Creek Blvd., Suite 223
`Oldsmar, Fl 34677
`
`And:
`
`Telefonix, Inc.
`Attn: Paul Blll'ke
`2340 Ernie Krueger Circle
`Waukegan, I1 60087
`
`7 - CONFIDENTIAL SETTLEMENT AGREEMENT
`
`{SSBLS Main Documcnts\7748\001\00205574-7}
`
`ExhibitB
`Page 7 of26
`
`InVue Exhibit 1013
`InVue v. MTI
`Page 14
`
`

`

`Case 3:10-cv-00392-BR Document 1 Filed 04/09/10 Page 21 of 39
`
`With a copy to:
`
`Stoll Heme
`Attn: Timothy S. DeJong
`209 S.W. Oak St., Suite 500
`Portland, OR 97204
`
`12.
`
`Dis-pi1te Resolution
`
`12. l The parties agree and consent to the exclusive jurisdi_ction of the District
`of Oregon to decide any dispute between the Patties arising out of this Agreement or the Consent
`Judgment. The Parties agre.: that the decision of the District of Oregon as to any such dispute
`shall be final and binding, and no Party shall have the right to appeal therefrom.
`
`12.2 The Parties agree that, in the event of any dispute involving the '994
`patent, the District of Oregon's Claim Construction Ordet' dated March 24, 2008, shall govern
`and shall not be challenged by a11y Party.
`
`13.
`
`Attorneys' Fees and Costs
`
`If any proceeding is instituted to interpret or enforce any term or provision of any
`of the Settlement Docw11ents, then the prevailing party shall be entitled to recover from the othe1·
`party its reasonable attorneys' foes and aU court costs incurred in such proceeding.
`
`14.
`
`Execution and Counterparts
`
`This Agreement may be executed in counterparts and by facsimile signatures, each of
`which shall constitute an original and all of which taken together shall constitute one and the
`same instrument and shall be immediately effective upon sig:nature by all Parties. If this
`Agreement is executed by facsimile, ihe Parties shall thereafter promptly exchange original
`signature pages.
`
`15. Wanantics
`
`15.1 Each individual executing this Agreement on behalf of a corporation
`warrant.ci and represents that he or she has the authority to execute this instmmcnt on behalf of
`such corporation,
`
`15 .2 Nothing in this Agreement shall be construed as a warranty or
`representation by Telefonix or Vanguard that the practice of the subject matter of any patent is or
`will be free from infringement of any patent held by a third pmty, nor that Telefonix or Vanguard
`will grant any license to .anyone or enforce or maintain any patent or initiate an infringement
`action as against any third party. Telefonix and Vanguard shall not be obligated or required to
`enforce the '994 patent against any third party, and the Settlement Documents shall have full
`force and effect regardless of whether Telefonix and Vanguard enforce the '994 patent against
`any third party.
`
`8 - CONFIDENTIAL SETTLEMENT AGREEMENT
`
`{SSBLS M•in Dooum