The Nanoco Group PLC (LON: NANO) share price plunged 23.3% after revealing more details about its planned settlement with Samsung to avoid the long and tedious litigation process that could have cost it time and money.
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The no-fault settlement was reached on Friday, 6 December 2022, triggering a massive 68% rally by Nanoco shares as investors cheered the suspension of the litigation process by both parties to allow the firms to reach an agreement outside of the courts.
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There are multiple advantages to an out-of-court settlement, as it would remove the risk associated with the litigation process, including the potential appeals targeting the trial process and the ongoing appeal of the Patent Trial and decisions by the Appeal Board.
A settlement would also eliminate further litigation costs and save the two companies valuable time that would have been lost during the litigation process. However, investors did not react positively to today’s announcement for various reasons.
First, Nanoco warned that the possible amount it would receive from Samsung as part of the settlement would be at the lower end of the range of expectations for a successful jury trial outcome, as it had previously guided.
The company also warned that any potential payments from the settlement would be a one-off payment and would not include any future royalty payments from Samsung despite the company infringing on Nanoco’s patents.
Nanoco also warned that the settlement process was still under the purview of the US justice system. After the judge granted the two firms a 30-day stay, none of the companies has complete control over the timing of the settlement.
Brian Tenner, Nanoco’s CEO, said: “A settlement provides certainty to all our stakeholders and further reinforces our confidence in the validity and enforceability of the Group’s global patent portfolio. I am more confident than ever about Nanoco’s future prospects. A settlement provides a firm financial underpinning to focus on our organic business, which has made significant progress over the last three years. It also demonstrates the Company’s willingness to vigorously defend our global IP portfolio against any potentially infringing parties in the wider market.”
*This is not investment advice.
Nanoco share price.
The Nanoco share price plunged 23.29% to trade at 42.65p, from Friday’s closing price of 55.60p.
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