British tech minnow Nanoco draws a line under Samsung’s IP spat with $150m settlement – but the AIM-listed company’s shares tumble 25%
- Nanoco accused Samsung of stealing unique patented techniques
- The companies avoided further legal drama by agreeing to a ‘no-fault’ settlement
Nanoco has reached a settlement over a long-running intellectual property dispute with Samsung that will see the Korean tech giant pay $150m (£122m) to the AIM-listed company.
The move ends a legal battle that has seen Manchester-based Nanoco accuse Samsung of stealing its unique patented techniques for creating tiny, specialized semiconductors.
But Nanoco shares tumbled as much as 25% to 27.7p in early trading, suggesting investors were unimpressed with the size of the settlement.
Transaction: Nanoco sued Samsung in early 2020 for an intellectual property dispute
The “no-fault” settlement, which the companies agreed to finalize to avoid costly new legal proceedings earlier this month, ends any global litigation with Samsung, “fully validates” Nanoco’s intellectual property and guarantees the group “complete freedom to operate in all markets, territories, products and types of materials”.
Under the terms of the agreement, Samsung purchased “non-core” Nanoco patents and entered into a “global, perpetual, fully paid license agreement.”
Nanoco will receive $65 million under an IP license agreement and $85 million for an IP sale agreement, payable in two equal installments by March 5, 2023 and by February 3, 2024.
The group said it planned to keep “more than 60%” of the $150 million, “after deducting legal and in-court financing costs”, as well as a “modest” tax liability.
Nanoco Group Chairman Chris Richards said: “It has been a long and difficult battle for Nanoco. The result is remarkable, considering the relative scale of Nanoco and Samsung.
“The settlement value is almost three times our own low damages model; Settling now avoids the risks associated with further litigation and the negative impact of the time value of money in an appeal process that would have taken years. More importantly, it validates Nanoco’s core intellectual property, which we will continue to vigorously defend.
He added that the allocation of proceeds from the deal will have to “balance any investment need from Nanoco’s growing biologics business with a firm intention to provide a significant return of capital to shareholders.”
CEO Brian Tenner said, “Today marks the start of a new chapter for Nanoco. We have successfully validated our core IP with one of the largest electronics companies in the world, which has been advised by one of the most expensive law firms in the world. Others operating in our space should take note.
“We therefore remain vigilant for other potential infringing activity, as well as opportunities to proactively provide new license agreements.” The confirmation of the validity of our intellectual property is already encouraging increased commercial interest in Nanoco as a supplier of advanced nanomaterials.
In a separate business update released on Friday, Nanoco said its operating performance in the six months to Jan. 31 had been “ahead of expectations,” while revenue and cost management were in line with forecasts. The direction.
Tenner said, “We have also generated transformational value for our stakeholders, while providing the funding for investment in the business.
“We did this while transforming Nanoco and positioning ourselves for significant organic growth in the near term.
“Most importantly, we have a baseline to focus on in the biological business as we continue to build on the significant positive momentum achieved over the past few years.”