Dana reaches $1.63 million patent dispute settlement with American Axle & Manufacturing

By Caroline Salls

Pittsburgh, Aug. 2 - Dana Corp. requested court approval of a settlement agreement with American Axle & Manufacturing, Inc. under which American Axle will pay Dana $1.63 million in connection with patent-related disputes, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Also under the agreement:

• As of the effective date, Dana will grant American Axle a perpetual, worldwide, irrevocable, non-exclusive, royalty-free, non-transferable fully paid-up license under the licensed Dana patents to make, use, sell, offer to sell, import or export vehicle driveline assemblies or components;

• As of the effective date, American Axle will grant Dana a perpetual, worldwide, irrevocable, non-exclusive, royalty-free, non-transferable, fully paid-up license under the licensed AAM patent to make, have made, use, sell, offer to sell, import or export licensed products for programs in commercial production; and

• The two patent-related lawsuits will be dismissed within five business days after American Axle makes the settlement payment.

Under a 1998 lawsuit, Dana alleges that American Axle is infringing some of Dana's patents in connection with the production of driveline assemblies.

Dana is seeking monetary damages for infringement of the patents in an undetermined amount and an injunction preventing further infringement by American Axle.

Dana estimated that its damages range between $2.5 million and $7.7 million, while American Axle claimed that any damages would be $165,000 at most.

American Axle asserted counterclaims, alleging that the patents are not valid because they were not timely filed, and that no infringement has occurred.

In a 2000 lawsuit, American Axle further alleged that Dana's procuring of the patents violated antitrust laws.

A hearing is scheduled for Aug. 16.

Dana, a Toledo, Ohio-based supplier of components, modules and systems to vehicle manufacturers and related aftermarkets, filed for bankruptcy on March 3. Its Chapter 11 case number is 06-10354.

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