Free Appendix - District Court of Delaware - Delaware

Case 1:06-cv-00004-SLR

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,

MEDIATION is a nonbindingprocess. The mediator m i s t s theparties in working out asolution that is acceptable to them. would like the AAA to contact the other parties to determine whether they wish to mediate this matter,please check this box. There L no additional administrativefee for this service. TO: Name

fiou

I Name of Representative (if known)
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City

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Remote Solution Co., Ltd.
Address

1 Name of Firm (if a~~licable) .
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92 Chogokri, Nmyun
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Representative's Address State

Zip Code

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1 FaxNo.

Phone No.

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agreement containedin a written contract, dated ~~h~IFIyV 16 1999 Arbitration Rules of the American Arbitration ~ssociation,'herebjr demands arbitration thereunder. IS~ r rA DISPUTEBETWEEN ABUSLNESSAND A CONSUMER? s Yes 6pl NO

THE N A W OF THE DISPUTE

PLEASE SEE ATTACBEXC

THE CLAIM OR RELIEF SOUGHT (the Amount, ifAny)

1

PLJUSE SEE ATTACXDENT
YES 8/

1
NO

DOES THIS DISPUTE ARfSE OUT OF AN EMPLOYMENT RELATIONSHIP?

a

IF THIS DISPUTE ARISES OUT OF AN EMPLOYMENT RELATIONSHIP, WHAT WASAS THE EMPLOYEE'S ANNUAL WAGE RANGE? Note: this question is required by California law.
.

@ Less Than $100,000
Llevlces

a

$100,000 $250,000

-

Over $250,000

N/A

TYPES OF BUSINESS Claimant S e l l e r of

Remote Control
A1-

Respondent Manufact*
.W

of Remote Control Devices

HEARING LOCALE REQUESTED

You are hereby notified that copies of our arbitration agreement and this demand are being fded with the American Arbitration office, with a request that it commence administration of the arbitration. Under the Association at its %ode Island rules, you may file an answering statement .within fifteen days after notice from the AAA, Signature (may b
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Title
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Partner

I Date J u l y 11, 2003
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of Re~resentative
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Name of Firm (if Applicable)

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Address (to Be Used in Connection with This Case)

Representative's Address City

Pm'NIE & EDMmDS uAP
State

1023 S t a t e S t r e e t
Schenectady
Phone No. City State

1155 Avenue of the Americas

NY
Fax No.

Zip Code

12307

New York

NY
Fax No.

Zip Code

10036

Phone No.

TEE FILING FEE AS PROVIDED FOR IN THE RULES, TO THE M SEND THE ORIGINAL DEMAND TO TKE .

Case 1:06-cv-00004-SLR

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CONTEC CORPORATION Claimant, Case Number: To be assigned REMOTE SOLUTION CO., LTD. (formerly known as HANG0 ELECTRONICS CO., LTD.)

ARBITRATION DEMAND PARTIES 1. Claimant Contec Corporation ("C~ntec~~) Delaware corporation having a principal is a place of business at 1023 State Street, Schenectady, New York. 12307. Its business includes the sale of remote control devices to cable television companies. The remote control devices control the operation of televisions, VCRs, and other electronic devices.
2. Respondent Remote Solution Co., Ltd. ("Remote Solution"), formerly known as Hango Electronics Co., Ltd. (collectively "Hango Korea"), is a Korean corporation with its offices and principal place of business at 92, Chogokri, Namrnyun, Kim Cheon City, Kyung Buk, Korea. Hango Korea is a manufacturer of remote control devices.

rnSDICTION 3. On February 16, 1999, Contec entered into a Manufacturing and Purchase Agreement ("the Agreement," attached as Exhibit A) with Hango Korea, setting forth the terms under which Contec would purchase remote control devices manufactured by Hango Korea.
4. The Agreement requires that all disputes arising out of the Agreement be arbitrated in "Albany, New York in accordance with the Commercial Arbitration Rules of the American Arbitration Association." (Agreement, para. 19).

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NATURE OF THE DISPUTE

5. Pursuant to the Agreement, Hango Korea manufactured remote control devices ("the Products") which were purchased by Contec. These remote control devices became the subject of two patent infi-ingement lawsuits, one brought by Universal Electronics, Inc. ("UEI"), and the other brought by Philips Electronics North America Corporation and U.S. Phlips Corporation (collectively, "Philips"). 6. The Agreement required Hango Korea to defend Contec in any patent infingement suit relating to the Products and pay all damages and costs awarded against Contec: Seller [Hango Korea] shall defend any suit or proceeding brought against Purchaser [Contec] to the extent that such suit or proceeding is based on a claim that the Products constitute an in£iingement of any valid United States or foreign patent, copyright, trade secret or other intellectual property right and [Hango Korea] shall pay all damages and costs awarded by fmal judgment against [Contec]. (Agreement, para. 3(c)).
7. On November 15,2000, UEI sued Contec, alleging that Contec in£iinged UEI's U.S. Patent Nos. 5,414,426; 5,959,751; and 6,014,092 (Universal.Electronics Inc. v. Contec L.L.C., Civil Action No. SACV-00-1126 AHS) ("the UEI v. Contec litigation").

8. UEI's claim against Contec in the UEI v. Contec litigation was based, in part, on Contec's sale of Products purchased from Hango Korea. 9. On November 22,2000, Contec's counsel, Mr. Robert E. Heslin, notified Mr. David Ahn (Hango Korea's "official representative and executive" in the U.S.) of the UEI v. Contec litigation and reminded him of Hango Korea's indemnity obligations under the Agreement. 10. Contec proceeded to defend itself in the UEI v. Contec litigation at its own expense, and, in May 2002, settled with UEI. 11. To date, Hango Korea has not paid Contec any of the fees and expenses incurred by Contec in defending itself in the UEI v. Contec litigation and in settling that matter. 12. On February 12,2002, Philips sued Contec alleging that Contec infringed Philips' U.S. Patent Nos. 4,703,359 and 5,872,562 philips Electronics North America Corporation and hlp U.S. Philips Corporation v. Contec Corporation, Civil Action No. 02-123 KAJ) ("the P i i s v. Contec litigation"). 13. Philips' claim against Contec in the P i i s v. Contec litigation was based, in part, on hlp Contec's sale of Products purchased fiom Hango Korea. 14. Philips subsequently added, on September 16,2002, Hango Korea and Hango Remote Solution, Inc. ("Hango America"), and several other defendants to the lawsuit.

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15. On March 18,2002, Contec's counsel, Mr. Robert E. Heslin, notified Mr. Hong-Bum Shin, the President of Hango Korea, of the Phil@s v. Contec litigation and asked Hango Korea to satisfy its indemnity obligations under the Agreement.

16. Hango Korea did not respond to Contec's March 18,2002 letter.
17. On July 26,2002, Contec's counsel, Mr. Bany D. Rein, sent a second letter to Messrs. Hong-Bum Shin and David Ahn reminding them of Contec's first letter and requesting a response. 18. By letter received August 2,2002, Mr. Yoon T. Choi, International Department Manager of Hango Korea, declined to defend Contec, stating that "[a] share of fees and damage of Patents are a heavy burden for us so we can not bear these expense." 19. Contec proceeded to defend itself in the Philips v. Contec litigation at its own expense, and in March 2003, settled with Philips. 20. To date, Hango Korea has refused to pay Contec any of the fees and expenses incurred by Contec in defending itself in the Philips v. Contec litigation and in settling that matter. 21. On May 23,2003, Hango America moved to amend its answer in the Philips v. Contec litigation to assert a cross-claim against Contec for indemnification or contribution. Contec opposed that motion on the grounds that (1) Contec has no indemnity or contribution obligations to Hango America, and (2) Hango America's motion is simply an improper attempt by Hango Korea at an end-run around the arbitration provisions of the Agreement. That motion is filly briefed and awaiting oral argument, if the c o w permits it, and decision by the court. 22. On June 20,2003, Hango Korea's counsel, Mr. Chunghwan Choi, forwarded to Contec a Korean complaint against Contec, which was apparently filed with the Daegu District Court, Kimchon Branch, Republic of Korea ("the Bill of Complaint"). That complaint has not yet been properly served on Contec. 23. In the Bill of Complaint, Hango Korea seeks payment for remote control units shipped to Contec in January 2003. As Hango Korea knows however, Contec has withheld payment for those units as a setoff against the amounts owed by Hango Korea to Contec under its above indemnification obligations. In any event, Hango Korea's claim for payment is governed by paragraph 19 of the Agreement, which requires arbitration in Albany, New York, not a court action in Korea. FIRST REQUEST FOR RELTEF 24. Hango Korea has violated paragraph 3(c) of the Agreement by refusing to defend Contec and pay its damages and costs, including settlement costs and royalties, in the UEI v. Contec litigation with respect to the Products purchased by Contec from Hango Korea.

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25. Contec accordingly seeks an award of these defense costs, including attorneys' fees, damages, settlement costs, royalties, and interest thereon.
SECOND REQUEST FOR RELIEF
26. Hango Korea has violated paragraph 3(c) of the Agreement by refusing to defend Contec and pay its damages and costs, including settlement costs and royalties, in the Philips v. Contec litigation with respect to the Products purchased by Contec fi-om Hango Korea.

27. Contec accordingly seeks an award of these defense costs, including attorneys' fees, damages, settlement costs, royalties, and interest thereon. THIRD =QUEST FOR RELIEF 28. Hango Korea has violated paragraph 19 of the Agreement by initiating an action in Korea for the payment of remote control units shipped to Contec.

29. Contec accordingly seeks an order directing Hango Korea to dismiss its Korean Bill of Complaint.
30. Contec further seeks an order enjoining Hango Korea fi-om bringing any other action or proceeding of any kind in Korea which relates to any disputes arising out of the Agreement.

FOURTH IREQUEST FOR RELIEF
3 1. Hango Korea has violated paragraph 19 of the Agreement by having its subsidiary Hango America pursue a cross-claim against Contec in the Philips v. Contec litigation. 32. Contec accordingly seeks an order directing Hango Korea to command Hango America to halt its cross-claim against Contec in the Philips v. Contec litigation.

FIFTH REQUEST FOR RELIEF
33. Contec seeks an award of damages sufficient to compensate it for enforcing the provisions of the Agreement, including but not limited to Contec's damages and expenses, including attorneys' fees, incurred in connection with this arbitration, Contec's damages and expenses, including attorneys' fees, incurred in connection with Hango Korea's Korean Bill of Complaint, and Contec's damages and expenses, including attorneys' fees, incurred in connection with Hango America's cross-claim. Contec believes the total monetary recovery of its requested relief to be between $1 million and $1.5 million. This is however a preliminary assessment and since actual amounts of

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certain items, such as attorneys' fees, are not yet precisely known, the actual amount may be higher. Respectfully submitted,

By:

Dated:

July 11,2003

E @ ~ Y kein D. Kenneth L. Stein Gregory J. Gonsalves Richard H. An P E W & EDMONDS LLP 1155 Avenue of the Americas New York, New York 10036-2711 (212) 790-9090
Attorneys for Claimant Contec Corporation