FORM 20-F THOMSON multimedia - Technicolor

from the Court giving final approval of the settlement agreement and a judgment of dismissal with
respect to THOMSON Multimedia, Inc. In July 2001, four objectors to the settlement filed notices of
appeal with the Appellate Court of Illinois, Fifth District, Madison County, Illinois. The appeals were
dismissed in November 2001 and the settlement is now final.
At the present time, it is not possible to make a precise determination of the total cost of the
settlement that was reached between Thomson and the plaintiffs. During 2000, an estimate was
made and expense recorded based on information available to us. Based on information currently
available, we believe that we have adequately reserved for the class action settlement.
In February 2000, Echostar Communications Corporation and two of its affiliates filed suit in
U.S. District Court for the District of Colorado against DIRECTV Enterprises, Inc. (and certain
affiliates) and THOMSON Multimedia, Inc., alleging violations of federal and state antitrust laws and
tortious interference with contractual relations arising from defendants’ ongoing attempts to
monopolize the distribution of high power direct broadcast satellite service. In 2001, Echostar filed an
amended complaint which included additional antitrust claims and named Radio Shack Corporation,
Circuit City Stores, Inc. and Best Buy Company, Inc. as additional defendants. On November 2,
2001, the U.S. District Court dismissed with prejudice the litigation.
In June 1998, Tanashin Denki Co. Ltd. filed suit in the U.S. District Court for the Eastern District
of Virginia alleging infringement of four utility patents and one design patent that relate to various
sub-components of audio cassette drive mechanisms. The case was subsequently transferred to the
U.S. District Court for the Southern District of Indiana. We purchase the cassette drive mechanisms
from third party vendors. In October 2001, a jury trial was held and a verdict was returned in favor of
Tanashin Denki in the amount of U.S.$10.65 million (0 12.1 million). Tanashin Denki is seeking
treble damages, recovery of attorneys’ fees and pre-judgment interest based upon the jury’s finding
of willful infringement. Several motions by each party are pending before the Court and judgment
has not been entered. We believe that the accrual settled in connection with this litigation is
adequate.
In June 2000, Superguide Corporation filed suit in the U.S. District Court for the Western District
of North Carolina against DIRECTV Enterprises, Inc. et Al., THOMSON Multimedia, Inc. and
Echostar Communications Corporation et Al. alleging infringement with respect to three patents
relating to program guide data retrieval, display and program recordation. Gemstar Development
Corporation was added as a defendant in March 2001. We believe that we have meritorious
defenses and patent indemnity rights and are vigorously defending against the allegations raised.
In December 2000, Pegasus Development Corporation and Personalized Media Communications,
L.L.C. filed suit in the U.S. District Court for the District of Delaware against Thomson
Consumer Electronics, Inc. (now THOMSON Multimedia, Inc.), DIRECTV, Inc., Hughes Electronics
Corporation, and Philips Electronics North America Corporation alleging infringement with respect to
seven patents relating to digital satellite signal processing. In November 2001, StarSight Telecast,
Inc., TVG-PMC, Inc., and Gemstar-TV Guide International, Inc. were added as counter-defendants
as a result of the Company’s claim of license. We believe that we have meritorious defenses and
are vigorously defending against the allegations raised.
In November 2001, THOMSON Multimedia, Inc., filed a demand for arbitration and a Statement
of Claims with the American Arbitration Association seeking to dissolve and/or terminate the @TV
Media Joint Venture with Gemstar TV Guide International, Inc. and recover damages for breach of
contract. Gemstar TV Guide International, Inc. has counterclaimed that Thomson S.A. terminated,
without good cause, a Memorandum of Terms outlining a proposed joint venture relating to the
development of an electronic program guide business in Europe. Thomson S.A. believes that
Gemstar’s counterclaims are without merit.
On February 15, 2002, James Stalcup and Mary Gick filed an individual and purported class
action pursuant to Section 5/2-801 of the Illinois Code of Civil Procedure on behalf of U.S.
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