Harman Kardon 2008 Annual Report Download - page 92

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beneficiaries of the Harman International Industries, Incorporated Retirement Savings Plan (“the Plan”),
compensatory damages for losses to the Plan as well as injunctive relief, constructive trust, restitution,
and other monetary relief. The amended complaint alleges that from April 26, 2007 to the present,
defendants failed to prudently and loyally manage the Plan’s assets, thereby breaching their fiduciary
duties in violation of ERISA, by causing the Plan to invest in Company stock notwithstanding that the
stock allegedly was “no longer a prudent investment for the Participants’ retirement savings.” The
amended complaint further claims that, during the Class Period, defendants failed to monitor the Plan
fiduciaries, and failed to provide the Plan fiduciaries with, and to disclose to Plan participants, adverse
facts regarding the Company and its businesses and prospects. The Russell Plaintiff also contends that
defendants breached their duties to avoid conflicts of interest and to serve the interests of participants in
and beneficiaries of the Plan with undivided loyalty. As a result of these alleged fiduciary breaches, the
complaint asserts that the Plan has “suffered substantial losses, resulting in the depletion of millions of
dollars of the retirement savings and anticipated retirement income of the Plan’s Participants.”
On March 24, 2008, the Court ordered, for pretrial management purposes only, the consolidation of
Patrick Russell v. Harman International Industries, Incorporated, et al. with In re Harman International
Industries Inc. Securities Litigation.
Defendants moved to dismiss the complaint in its entirety on August 5, 2008.
We believe the lawsuit, which is still in its earliest stages, is without merit and we intend to vigorously
defend against it.
Siemens vs. Harman Becker Automotive Systems GmbH.
In October 2006 Harman Becker received notice of a complaint filed by Siemens AG against it with the
Regional Court in Düsseldorf in August 2006 alleging that certain of Harman Becker’s infotainment
products including both radio receiver and Bluetooth hands free telephony functionality, infringe upon a
patent owned by Siemens. In November 2006 Harman Becker filed suit with the German Federal Patent
Court in Munich to nullify the claims of this patent.
On August 14, 2007, the court of first instance in Düsseldorf ruled that the patent in question had been
infringed and ordered Harman Becker to cease selling the products in question in Germany, and to
compile and submit data to Siemens concerning its prior sales of such products. Harman Becker has
appealed that ruling.
Despite the pending appeal, Siemens AG provisionally enforced the ruling against Harman Becker.
Accordingly, Harman Becker ceased selling aftermarket products covered by the patent in Germany, and
submitted the required data to Siemens AG.
On June 4, 2008 the German Federal Patent Court nullified all relevant claims of Siemens’ patent. As a
result, Harman Becker resumed selling the affected products, and Siemens suspended further attempts to
enforce the patent. Siemens also requested that Harman Becker suspend its appeal of the Düsseldorf
court’s ruling of infringement until the German Federal Patent Court’s nullity ruling has become final.
Harman has consented to this suspension. The written decision of the German Federal Patent Court has
not been issued. Upon receipt of the written decision, Siemens will have one month to appeal.