Imation, maker of Memorex brand DVDs and videotapes, said it agreed to pay Royal Philips Electronics NV $53 million over three years to end litigation over optical-storage media. The companies had been previously involved in a complex series of disputes in multiple jurisdictions regarding cross-licensing and patent infringement related to recordable optical media. The settlement provides resolution of all claims and counterclaims filed by the parties without any finding or admission of liability or wrongdoing by any party. As a term of the settlement, Imation will pay Philips $53 million over a period of three years. Other terms of the settlement were not disclosed. As a result of the settlement, Imation expects to record a charge, based on the present value of these payments, of approximately $49 million or $0.81 per share in the second quarter of 2009. The pre-tax cash impact for 2009 will be approximately $16.5 million, occurring during the second half of this year.

"We are pleased to settle this very costly and distracting litigation and to eliminate an ongoing risk for the Company. In addition to resolving our differences, we have established a framework for cooperation going forward," said Frank Russomanno, vice chairman and chief executive officer of Imation. "As a global leader in the data storage industry, Imation looks forward to continuing to provide high-quality optical media under Imation, Memorex, TDK Life on Record, and private label brands to our customers around the world."