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TILIA INTERNATIONAL INC. v. ARY INC.

July 31, 2003

TILIA INTERNATIONAL, INC., A DELAWARE CORPORATION, PLAINTIFF,
v.
ARY, INC., A MISSOURI CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Susan Illston, United States District Judge

STIPULATED DISMISSAL WITH PREJUDICE

WHEREAS, on August 26, 2002, plaintiff Tilia International, Inc. ("Tilia") filed its Complaint for Patent Infringement against ARY, Inc. ("ARY");

WHEREAS, on October 9, 2002, ARY filed its answer and counterclaims against Tilia.

WHEREAS, on July 25, 2003, the parties executed the final Settlement and Patent License Agreement attached hereto as Exhibit A; and

WHEREAS, the parties desire that the Court enter this Stipulated Dismissal with Prejudice.

In witness wherefore, by signing below the parties, by and through their counsel of record, hereby AGREE AND STIPULATE, AND THE COURT ORDERS ADJUDGES AND DECREES, AS FOLLOWS:

1. This Court has jurisdiction over the subject matter of and the parties to this action is proper in this judicial district;
2. Tilia's claims against Defendant are hereby dismissed with prejudice;
3. ARY's counterclaims against Tilia are hereby dismissed with prejudice; and
4. Each party shall bear its own costs and attorneys' fees.

IT IS SO ORDERED, ADJUDGED AND DECREED:

SETTLEMENT AND PATENT LICENSE AGREEMENT

This Settlement and Patent License Agreement ("Agreement") is made and entered into as of July 25, 2003 (the "Effective Date"), by and between Tilia International, Inc. ("Tilia" and ARY, Inc. ("ARY") (collectively, the "Parties").

RECITALS

WHEREAS, ARY manufactures, imports, markets, sells and/or distributes vacuum channel bags containing a cracked ice pattern ("Cracked Ice Bags").

WHEREAS, ARY denies having thus far manufactured, imported, marketed, sold and/or distributed vacuum channel bags containing a crisscross pattern ("Crisscross Bags").

WHEREAS, ARY may manufacture, import, market, sell and/or distribute Crisscross Bags in the future.

WHEREAS, on August 26, 2002, Tilia filed an action in United States District Court for the patent infringement entitled, Tilia International, Inc. v. ARY, Inc., bearing Case No. C 02-4097 SI (the "Tilia Claim") against ARY alleging that the ARY's manufacture, import, marketing, sale and/or distribution of the Cracked Ice Bags and/or the Crisscross Bags infringes Tilia's U.S. Patent No. RE 34,929, entitled "Plastic Bag for Vacuum Sealing", which originally issued on July 12, 1988, to Harms J. Kristen (the "929 Patent").

WHEREAS, on October 9, 2002, ARY filed a counterclaim in United States District Court seeking a declaration of non-infringement and invalidity and alleging a violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), interference with prospective business advantage, defamation, deceptive trade practices in violation of Nebraska Revised Statute § 87-302 (the "ARY Claim" and, together with the Tilia Claim, the "Claims").

WHEREAS, the Parties desire to finally settle the Claims and, therefore, enter into this Agreement upon the terms and conditions hereinafter set forth.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and obligations herein undertaken, the Parties agree as follows:

1. Admission of Infringement and Validity.

ARY hereby agrees and acknowledges that its manufacture, import, marketing, sale and/or distribution of the Cracked Ice Bags is covered by at least one valid and enforceable claim of the "929 Patent. ARY hereby agrees and acknowledges that the manufacture, import, marketing, sale and/or distribution of the Crisscross Bags would be covered by at least one valid and enforceable claim of the `929 Patent. Furthermore, ARY hereby agrees and acknowledges that the `929 Patent is valid and enforceable under all applicable laws. ARY agrees that it will not, and ARY agrees that it will not cause any person which directly or indirectly controls or is controlled by, or is under common control with ARY ("ARY Affilates") to challenge or assist any third party in challenging the validity or enforceability of the `929 Patent.

2. Limited License Grant.

2.1. Subject to the terms and conditions of this Agreement, Tilia grants to ARY a nonexclusive, nontransferable, royalty-bearing, limited license (without the right to sublicense) under the `929 Patent to make, use, sell, offer for sale and otherwise dispose of the Cracked Ice Bags solely in the commercial market (i.e., ARY shall not knowingly make, have made, use, sell, offer for sale or otherwise dispose of Cracked Ice Bags in the household market).

2.2. Subject to the terms and conditions of this Agreement, Tilia grants to ARY a nonexclusive, nontransferable, royalty-bearing, limited license (without the right to sublicense) under the `929 Patent to make, use, sell, offer for sale and otherwise dispose of the ...


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