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Software AG interim report 2 2013

40 Software AG | Interim Report 2/2013 [10] Litigation In February 2010, a software company in Virginia, USA sued Software AG together with 11 additional defendants, including IBM and SAP, for infringement of several of its software patents. The lawsuit was filed with a court in Virginia. The proceed- ings were suspended for Software AG and additional defendants by order of the court. The proceedings are continuing against only one of the defendants. The verdict of these proceedings will determine if the proceedings against Software AG will be resumed. The court dismissed the test case, upon which the plaintiff filed an appeal. The court of appeals rejected the appeal in January 2012. The plaintiff brought further legal action. The proceedings against the other defendants are still pending. On February 10, 2012, a non-practicing entity (NPE: a company that solely pursues patent-right violations, rather than manu- facturing or using the patented invention) from the U.S. state of Delaware sued Software AG in the District Court of Delaware for violating one of its software patents. This NPE has filed similar parallel lawsuits against other defendants. The lawsuit against Software AG was withdrawn in January 2013. The NPE also filed a new lawsuit for the alleged violation of two of its software patents in January 2013. The proceedings are in an early stage. Hearings are not scheduled to take place until mid-2015. A number of legal actions have been have been filed with the Regional Court of Saarbrücken in connection with the control and profit transfer agreement with IDS Scheer AG. In these proceedings, the petitioners are seeking an increase in their cash settlements and annual compensatory payments. Software AG considers the objections as to valuation to be ground- less. The proceedings were combined into one. The first hearing took place at the end of February 2012 and had no outcome. The proceedings were continued in June 2013. No further dates have been scheduled. In connection with the merger of IDS Scheer AG and Software AG, a large number of legal challenges were filed with the Regional Court of Saarbrücken, in which the plaintiffs seek a legal review of the set exchange ratio and cash compensation. Software AG considers the objections as to valuation to be groundless. The proceedings were combined into one. The first hearing took place on November 23, 2012. In its decision of March 15, 2013, the Regional Court of Saarbrücken determined that the market value ratio method be employed for valuation and that cash compensation in the amount of €7.22 for every share held by outside shareholders be paid. Software AG appealed the decision. In connection with the termination of Mr. David Broadbent’s Management Board membership, Mr. Broadbent has instituted legal proceedings before the Regional Court of Darmstadt, which the Company considers to be unfounded. After an exten- sive exchange of briefs, the first hearing was held on May 2012. The court ruled against the Company’s arguments and found in favor of Mr. Broadbent on December 21, 2012. Software AG filed an appeal against the ruling. In the meantime the parties have arrived at a mutual agreement outside of court. The agreement stipulates the termination of Mr. Broad- bent’s appointment to the Managment Board as of July 18, 2011 and the termination of his employment contract as of August 31, 2011 in exchange for payment of 1.25 annual salaries and previously earned but not yet paid entitlements from the period prior to August 31, 2011.