Audiovox 2003 Annual Report Download - page 135

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AUDIOVOX CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
November 30, 2001, 2002 and 2003
(Dollars in thousands, except share and per share data)
manufacturers in these matters, obtained the benefit of a patent
license or has decided to vigorously defend such claims.
On September 17, 2003, AEC settled the action for patent infringement
that was instituted by Nissho Iwai American Corporation against AEC in
the United State District Court for the Southern District of New York.
Pursuant to the settlement Nissho granted AEC a non−exclusive license
for a payment covering any alleged past infringements and a per unit
payment for future infringement. Neither party to the lawsuit admitted
any liability or any merit to the allegations of either party.
The Company and ACC, along with other manufacturers of wireless phones
and cellular service providers, were named as defendants in two class
action lawsuits alleging non−compliance with FCC ordered emergency 911
call processing capabilities. These lawsuits were consolidated and
transferred to the United States District Court for the Northern
District of Illinois, which in turn referred the cases to the Federal
Communications Commission ("FCC") to determine if the manufacturers
and service providers are in compliance with the FCC's order on
emergency 911 call processing capabilities. The Company and ACC intend
to vigorously defend this matter. However, no assurances regarding the
outcome of this matter can be given at this point in the litigation.
In June 2003, ACC settled the litigation it had instituted against
Northcoast Communications, LLC ("Northcoast"). ACC received a partial
payment of its claimed amount from Northcoast. In addition, Northcoast
withdrew its counterclaims with prejudice. A Stipulation of
Discontinuance with prejudice was filed in the Supreme Court of the
State of New York, County of Suffolk.
During 2001, the Company, along with other suppliers, manufacturers
and distributors of hand− held wireless telephones, was named as a
defendant in five class action lawsuits alleging damages relating to
exposure to radio frequency radiation from hand−held wireless
telephones. These class actions have been consolidated and transferred
to a Multi−District Litigation Panel before the United States District
Court of the District of Maryland. On March 5, 2003, Judge Catherine
C. Blake of the United States District Court for the District of
Maryland granted the defendants' consolidated motion to dismiss these
complaints. Plaintiffs have appealed to the United States Circuit
Court of Appeals, Fourth Circuit. The appeal pending before the United
States Circuit Court of Appeals, Fourth Circuit in the consolidated
class action lawsuits (Pinney, Farina, Gilliam, Gimpelson and Naquin)
against ACC and other suppliers, manufacturers and distributors as
well as wireless carriers of hand−held wireless telephones alleging
damages relating to risk of exposure to radio frequency radiation from
the wireless telephones has not yet been heard. It is anticipated that
the appeal will be heard in May 2004.
(Continued)
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