AMD 2011 Annual Report Download - page 110

defendants from GPHI’s allegations of infringement as to AMD graphics products and designs in that case and
requested the defendants’ agreement to the joint dismissal of the claims and counterclaims asserted in this
litigation matter. The defendants agreed to joint dismissal. Accordingly, on May 2, 2011, the case was
terminated.
Samsung Settlement
In the fourth quarter of 2010, the Company entered into a Patent License and Settlement Agreement with
Samsung to end all outstanding legal disputes related to pending patent litigation between the Company and
Samsung. Pursuant to this agreement, all claims between the parties were dismissed with prejudice and Samsung
agreed to pay the Company $283 million less any withholding taxes not to exceed a maximum rate of 16.5%. The
Company received the first payment of $119 million (which represents $143 million less withholding taxes) in
December 2010. The remaining amount of $117 million (which represents $140 million less withholding taxes)
was paid in two equal installments in May 2011 and in November 2011. In addition, pursuant to the settlement
agreement, Samsung granted to the Company, and the Company granted to Samsung, non-exclusive, royalty-free
licenses to all patents and patent applications for ten years after the effective date of the Agreement to make,
have made, use, sell, offer to sell, import and otherwise dispose of certain semiconductor- and electronic-related
products anywhere in the world.
This settlement encompassed all patent litigation and disputes between the parties. At the time the Company
entered into the Agreement, it did not have any future obligations that it was required to perform in order to earn
this settlement payment. Accordingly, the Company recognized the entire settlement amount in its 2010
operating results.
Intel Settlement
In the fourth quarter of 2009, Intel Corporation and the Company entered into an agreement to end all
outstanding legal disputes between the Company and Intel including antitrust litigation and patent cross license
disputes. Under the terms of the agreement:
• The Company and Intel agreed to a new 5-year patent cross license agreement that gives the Company
broad rights and the freedom to operate a business utilizing multiple foundries;
• Intel and the Company gave up any claims of breach from the previous license agreement;
• Intel paid the Company $1.25 billion;
• Intel agreed to abide by a set of business practice provisions going forward;
• the Company dropped all pending litigation, including a case in U.S. District Court in Delaware and two
cases pending in Japan; and
• the Company withdrew all of its regulatory complaints worldwide.
This settlement encompasses all past antitrust litigation and disputes between the Company and Intel. At the
time the Company entered into the agreement, it did not have any future obligations that the Company would
need to perform to earn this settlement payment. That is, the patent cross license agreement represents fully paid
up licenses by both the Company and Intel for which no future payment or delivery is required. Accordingly, the
Company recognized the entire settlement amount in its 2009 operating results.
104