Lake Forest-based Western Digital Corp. said Wednesday that it will make a one-time payment of $24 million to settle a patent-infringement lawsuit with Germany’s Papst Licensing GmbH & Co.
The agreement, which was reached July 4, will result in a net charge of $19 million, which will be reflected in the quarter ended July 1, said computer hard drive maker Western Digital in a filing with the Securities and Exchange Commission.
Papst Licensing agreed to drop its lawsuit, and release “all past, present, and future claims” alleging infringement by Western Digital of Papst patents, according to the filing.
Shares of Western Digital closed Wednesday at $14.60, up 5 cents.
The settlement is the latest concern weighing on Western Digital’s stock. In June, some Wall Street analysts issued research notes critical of Western Digital following checks of buyers and resellers of computer disk drives that indicated a price war for the computer components.
The average desktop drives had fallen 5% to 10%, said Merrill Lynch & Co. in one note. Another analyst with Piper Jaffray & Co. wrote that Western Digital could face higher operating expenses as it tried to keep pace with Seagate Technology Inc. and Maxtor Corp.
