Siemens 2012 Annual Report Download - page 286

1 A. To our Shareholders 49 C. Combined Management Report 21 B. Corporate Governance
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June  asserting material claims against certain other par-
ties to the project. While no claims are being asserted against
Siemens in the arbitration at this time, it is possible that such
claims against Siemens may follow as matters progress.
As previously reported, OSRAM is party to a number of patent
lawsuits involving Samsung group companies and LG group
companies. On the one hand, OSRAM has sued Samsung
group companies and / or LG group companies and some of the
customers of these companies in the U.S., South Korea,
Germany, China and Japan for patent infringements, and is re-
questing injunctions against unauthorized use of the asserted
patents and, in some cases, import bans and compensation. In
addition, OSRAM has commenced patent invalidation lawsuits
relating to LG patents and Samsung patents on Light Emitting
Diode (LED) technology in South Korea and relating to LG pat-
ents on LED technology in China, Germany and the US. Sam-
sung group companies and/or LG group companies have, on
the other hand, initiated patent invalidation lawsuits relating
to OSRAM patents on LED technology, in particular white LEDs,
in South Korea, Germany, the US, China and Japan. In addition,
Samsung group companies and/or LG group companies have
filed patent infringement lawsuits in various jurisdictions,
such as the U.S., South Korea, Germany and China, requesting
injunctions against unauthorized use of the asserted patents
and, in some cases, import bans and compensation from
OSRAM. The patent infringement lawsuits initiated by LG
group companies and Samsung group companies partly in-
volve direct and indirect customers of OSRAM. In August ,
OSRAM and Samsung entered into a settlement agreement
and terminated the lawsuits pending between them. In Octo-
ber  OSRAM and LG entered into a settlement agreement
and are in the process of terminating the lawsuits pending
between them.
In July , Hellenic Telecommunications Organization S.A.
(OTE) filed a lawsuit against Siemens AG with the district court
of Munich, Germany, seeking to compel Siemens AG to dis-
close the outcome of its internal investigations with respect to
OTE. OTE seeks to obtain information with respect to allega-
tions of undue influence and / or acts of bribery in connection
with contracts concluded between Siemens AG and OTE from
calendar  to . In May , OTE was granted access to
the public prosecutor’s files in Greece. At the end of July ,
OTE expanded its claim and requested payment of damages by
Siemens AG of at least €. million to OTE for alleged bribery
payments to OTE-employees. While Siemens AG continues to
defend itself against the expanded claim, Siemens AG and OTE
remain in discussions to resolve the matter.
As previously reported, Siemens A.E. entered into a subcon-
tract agreement with Science Applications International Cor-
poration, Delaware, USA, (SAIC) in May of  to deliver and
install a significant portion of a security surveillance system
(the CI project) in advance of the Olympic Games in Athens,
Greece. Siemens A.E. fulfilled its obligations pursuant to the
subcontract agreement. Nonetheless, the Greek government
claimed errors related to the CI-System and withheld amounts
for abatement in a double-digit million € range. Furthermore,
the Greek government withheld final payment in a double-dig-
it million € range, claiming that the system had not been final-
ly accepted. Although Siemens A.E. is not a contractual party
of the Greek government, under Siemens A.E’s subcontract
agreement with SAIC non-payment by the Greek government
also has an economic effect on Siemens A.E. SAIC has filed for
arbitration contesting all the Greek government’s claims and
its ability to withhold payments. The Greek State filed, inter
alia, a motion to stay the arbitration in view of the ongoing
criminal investigations conducted by the Greek public prose-
cutor. This motion was denied by the Arbitral Tribunal in July
. Resolution of this dispute has been complicated by brib-
ery and fraud allegations (either made in public or within the
arbitration proceedings) against Siemens A.E. in Greece, which
have resulted in extensive negative media coverage concern-
ing the CI system.
As previously reported, Russian authorities are conducting
widespread investigations regarding possible fraudulent activ-
ities of resellers and governmental officials relating to procure-
ment of medical equipment in the public sector. As is the case
with other providers of medical equipment, OOO Siemens,
Russia, has received numerous information requests and in-
quiries were made on-site by the authorities regarding tenders
in the public healthcare sector. OOO Siemens is cooperating in
the ongoing investigations which also relate to certain individ-
ual employees.
As previously reported, in April , the Defense Criminal In-
vestigative Service of the U.S. Department of Defense conduct-
ed a search at the premises of Siemens Medical Solutions USA,
Inc., United States, in Malvern, Pennsylvania, in connection
with an investigation relating to a Siemens contract with the
U.S. Department of Defense for the provision of medical equip-
ment.
As previously reported, in June , Siemens AG and two of
its subsidiaries voluntarily self-reported, among others, possi-
ble violations of U.S. Export Administration Regulations to the
responsible U.S. authorities. On October , , the U.S.