SOURCE: Gentex Corporation

December 13, 2007 16:59 ET

Court Renders Opinion in Litigation Between Gentex and Muth

ZEELAND, MI--(Marketwire - December 13, 2007) - The United States Bankruptcy Court in the Eastern District of Wisconsin recently rendered its opinion in the case of Debtors (Muth Mirror Systems, LLC, et al, hereafter "Muth") v. Gentex Corporation (NASDAQ: GNTX) ("Gentex") v. Debtors, et al. (Case No. 06-25609-DVM).

The Court found that Muth's U.S. Patent No. 6,005,724 is invalid and unenforceable, and that Gentex's Razor™ Turn Signal Mirror does not infringe that patent. The Court also denied all but one of Muth's other motions with prejudice, including its motion for an injunction, and its claims for tortious interference with its business relationships. The sole point of liability for Gentex was that the Court found that Gentex breached one provision of the alliance agreement it has with Muth, and granted Muth damages in the amount of approximately $2.9 million.

Gentex Senior Vice President Enoch Jen said that the Court's decision that Gentex's new Razor exterior mirror product does not infringe Muth's patent is good news for the Company moving forward, as it allows Gentex to provide auto-dimming mirrors with Razor turn signals and other value-added features in the exterior mirror. The Company has begun shipping non auto-dimming exterior mirrors with a side blind zone feature in low volume.

"While we agree with the Court's other findings, we disagree with the Court's decision that Gentex breached the alliance agreement and the award of damages," said Gentex Senior Vice President Enoch Jen.

Gentex has continued to pay Muth royalties in accordance with the terms of the agreement. Jen said that the agreement with Muth, which the Court has previously determined was an exclusive agreement between the two parties, remains in force through May 14, 2008. Gentex will continue to fulfill its legal obligations until the agreement expires.

The Company will record a $2.9 million charge (pre-tax) in the fourth quarter of 2007 as a component of operating expense on its income statement in accordance with generally accepted accounting principles.

The Court is expected to enter its judgment in this case sometime during the next 30 days. At that time, the Company will determine whether it plans to appeal the finding with respect to a breach of the alliance agreement and the award of damages. If Gentex decides to appeal, the judge has already authorized Gentex to post a bond in lieu of immediate payment of the $2.9 million until the appeal process is resolved.

"While we believe there is a good likelihood of success if Gentex appeals the finding with respect to breach of the alliance agreement and damage award, we will also consider all of the costs associated with an appeal before we make that decision," concluded Jen.

Founded in 1974, Gentex Corporation (NASDAQ: GNTX) is an international company that provides high-quality products to the worldwide automotive industry and North American fire protection market. Based in Zeeland, Michigan, the Company develops, manufactures and markets interior and exterior automatic-dimming automotive rearview mirrors that utilize proprietary electrochromic technology to dim in proportion to the amount of headlight glare from trailing vehicle headlamps. Many of the mirrors are sold with advanced electronic features, and more than 96 percent of the Company's revenues are derived from the sale of auto-dimming mirrors to nearly every major automaker in the world.

Contact Information

  • CONTACT:
    Connie Hamblin
    616/772-1800

    EXCHANGE: NASDAQ Global Select Market
    SYMBOL: GNTX
    WEBSITE: www.gentex.com