Hewlett-Packard (HPQ)

Settled and Concluded Litigation, Proceedings and Investigations

        Compression Labs Patent Litigation.    On October 25, 2006, HP and 22 other companies entered into a Patent License and Settlement Agreement with Compression Labs, Inc., a subsidiary of Forgent Networks ("CLI"), to resolve all outstanding patent infringement litigation with CLI related to U.S. Patent No. 4,698,672 (the "'672 Patent"). The settlement agreement results in the dismissal with prejudice of Compression Labs, Inc. v. HP et al., a lawsuit filed by CLI on April 22, 2004 in the United States District Court for the Eastern District of Texas and subsequently consolidated for pre-trial proceedings in the Northern District of California with nine other similar lawsuits between CLI and one or more of the defendants. CLI sought unspecified damages, interest, costs and attorneys' fees for alleged infringement of the '672 Patent, which CLI asserted was infringed by the JPEG still-image compression standard. Under the terms of the settlement agreement, the defendants agreed to pay CLI an aggregate of $8 million (a portion of which was paid by HP), and CLI granted HP and the other defendants a worldwide, nonexclusive, fully paid-up and irrevocable license in exchange.