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Lawyers, other representatives, expert(s), tribunal’s secretary

Final Arbitral Award

A. Procedural History

1.
By submission of 18 December 2007, Claimant Initiated this arbitration by filing its arbitration demand ("RfA") with the Deutsche Institution fur Schiedsge-richtsbarkeit e.V. In its RfA, Claimant nominated as co-arbitrator Dr. Holger Kraft.
2.
By letter of 20 March 2008 (Respondent 1) and 24 March 2008 (Respondent 2) Respondents jointly nominated as co-arbitrator Dr. Patricia Nacimiento.
3.
Already prior to the initiation of this arbitration, the Parties were in litigation before the state courts in Ohio. In view of settlement discussions, the Parties requested that the arbitration proceedings be kept pending until further notice.
4.
By its letter of 22 June 2009 Claimant informed the DIS about the failure of the settlement discussions and requested that the arbitration proceedings be continued.
5.
By letter of 25 June 2009 the DIS confirmed Dr. Gunter Pickrahn as Chairman of this arbitration.
6.
Respondent 2 filed its answer to the RfA on 14 September 2009 ("R 2 Answer"). Respondent 1 filed its answer and counterclaim on 15 September 2009 ("R 1 Answer").
7.
On 15 December 2009, Respondents filed more elaborated statements of defense ("Amendment Statement of Defence") to which Claimant replied by its submission of 1 March 2010.
8.
On 25 March 2010, a first oral hearing took place in Frankfurt.
9.
On 31 May 2010, Respondent 2 filed a reply to Claimant’s submission of 1 March 2010.
10.
In May 2010 Respondent 1’s previous counsel (Squire, Sanders & Dempsey) withdrew from the case. Respondent 1’s new (and current) counsel took over and filed Respondent 1’s reply to Claimant’s submission of 1 March 2010 on 26 August 2010.
11.
On 2 November 2010 Claimant filed its reply to Respondents’ submissions of 31 May 2010 and 26 August 2010.
12.
On 6 and 7 December 2010 the evidentiary hearing (the "Hearing") took place In Frankfurt. In the Hearing, the following witnesses were heard: Mr. Ramesh Malhotra, Dr. Dandridge Tomalin, Dr. Gerhard Brückmann, and Mr. Berthold Jung.
13.
On 28 February 2011 the Parties filed their Post-Hearing Briefs ("PHB").
14.
On 15 March 2011 the Parties filed their submissions on costs, and subsequently had an opportunity to comment on the other Parties’ submissions.
15.
Over the course of the arbitration, the Arbitral Tribunal issued 20 Procedural Orders. The arbitral proceedings were closed by Procedural Order No. 18 of 17 March 2011.

B. Factual Circumstances

1. The Parties

16.
Claimant is a limited liability company under German law registered with the court in GieBen and having its principal place of business in Heuchelheim, Germany. Its main business is the development, manufacture, and distribution of high-tech wires. In this field, it is one of the market leaders worldwide. Claimant has a US subsidiary, Bedra-Gisco, located in Hauppauge, New York.
17.
Respondent 1 is an Ohio corporation with its principal place of business In Mason, Ohio. It acquires and markets electric discharge machining ("EDM") wire. Respondent 1's main shareholder is Mr. Ramesh Malhotra.
18.
Respondent 2 is a company with its principal place of business in Mason, Ohio, engaged in the EDM wire business. Respondent 2 is run by its founder and main shareholder, Dr. Dandridge Tomalin, an inventor of EDM wire technology. As from 2004, Mr. Malhotra holds shares in Respondent 2, too.

2. The Patents held by Claimant and Respondent 2

19.
Claimant holds various patents concerning EDM wire technology, including the US patent US 5,762,7261, US 6,447,9302, and European Patent EP 0 733 4313 (collectively the "Berkenhoff Patents").
20.
Respondent 2 holds various patents concerning EDM wire technology, including the US patent US 5,945,0104, the European Patent EP 1 00 9 5745, and the Canadian patent CA 2,302,2026 (formerly CA 08,886,483) (collectively the "CCC Patents").

3. The Revised Patent License Agreement of October/November 2004

21.
Already in 2002, Respondents entered into two license agreements7 pursuant to which Respondent 1 was granted a license by Respondent 2 concerning EDM wire technology.
22.
On 25 May 2004, Respondents had entered into a Memorandum of Under- standing to revise such license agreements.
23.
On 25 October/3 November 2004, Respondents entered into the Revised Patent License Agreement8 which retroactively became effective as from 1 July 2004.
24.
Under the Revised Patent License Agreement Respondent 1 became the exclusive licensee of the CCC Patents with the right to grant sub-licenses9.
25.
The Revised Patent License Agreement is subject to the laws of the State of Ohio and provides for the jurisdiction of the courts of the State of Ohio10.

4. The Patent Opposition Proceedings in Europe

26.
In January 2004, Claimant filed an opposition against Respondent 2’s EP 1 009 574. Claimant withdrew its opposition after the execution of the License Agreement (see below No. 30 et seq.) and the Side Agreement (see below No. 47 et seq.).

5. Discussions between Claimant and Respondent 1 about a possible acquisition of shares in Respondent 1 by Claimant or respectively any other "strategic alliance"

27.
As from 2003, Claimant and Respondent 1 were in regular discussions about a possible closer cooperation, including the idea of Claimant’s acquisition of shares in Respondent 1. At some point in time, Claimant also carried out a due diligence review of Respondent 1’s business. To that end Claimant and Respondent 1 executed a Non-Disclosure Agreement on 18 August 2003 and a Confidentiality Agreement on 2 August 200411. Various draft documents were exchanged concerning different forms of a closer cooperation or alliance. However, no final written agreement was executed in that respect.

6. The Meeting between Claimant and Respondent 1 on November 15/16 2004

28.
On 15 and 16 November 2004, Claimant and Respondent 1 met in Ohio. On Respondent 1’s side, Mr. Ramesh Malhotra and his lawyer, Mr. Charlie Melville, were present. Claimant was represented by its (former) managing direc- tor, Dr. Gerhard Brückmann, Mr. Jurgen Schutz, and its German lawyer, Mr. Berthold Jung.
29.
Prior to that meeting, Claimant and Respondent 1 had exchanged various draft agreements. The objective of the meeting was to finalize and execute a written agreement. The finally executed written agreement between Claimant and Respondent 1 is the License Agreement of 16 November 200412 ("the License Agreement").

7. The License Agreement

30.
On page 1 of the License Agreement, Claimant and Respondent 1 stated that each party has rights to the Berkenhoff Patents and the CCC Patents respectively.
31.
In the Preamble, it was stated that there was "a disagreement among Berkenhoff, GTN and the patent law holders concerning the legal relationship of the patents aforesaid to each other. The parties desire to utilize the patents aforesaid and introduce to the market EDM wire based on Gammaphase technology as soon as possible as such products are cheaper and their performance is technically superior to that of traditional products and the introduction thereof serves the interests of the respective customers. In accomplishing the aforesaid the parties try to desire to avoid endless costly legal disputes based on patent infringements the outcome of which is uncertain for both parties".
32.
The Parties then agreed on the following:
33.
"Berkenhoff grants GTN an exclusive worldwide gratuitous license to manufacture all gamma phase wires (through the companies Paps/Korea, Swill/lndia and GTN owned or controlled companies) and to use, offer, and sell the products."
34.
"GTN grants Berkenhoff an exclusive worldwide gratuitous license to manufacture, use, offer, and sell all gamma phase products."
35.
During the Hearing13, Claimant and Respondent 1 confirmed that they are in agreement that the term "exclusive" as used in the License Agreement was meant to exclude the use of the patents by a party other than the Claimant or the Respondent 1.
36.
The License Agreement further provides:
37.
"Both parties are at liberty to develop, manufacture, and sell new generations of gamma phase wires. Such new generations of gamma phase wires shall be subject to the terms of this agreement and the non-developing party shall be granted a license to purchase the same in accordance with the terms of this agreement. Prices and terms of delivery for the new generations of gamma phase wires shall be the subject of separate negotiation."
38.
Clause 1 reads: "Berkenhoff and GTN shall at the request of the other party supply each other with all products produced and/or sourced for the purpose of completing their respective market obligations."
39.
Clause 2 reads: "The prices for each product to be marketed will be agreed upon and shall be negotiated annually. The supply of products by each party to the other shall be subject to such terms agreed by the parties for each indi vidual order and further to the general terms and conditions of supply annexed hereto."
40.
Clause 3 reads: "Neither party is obliged to take delivery of a minimum quantity of wire."
41.
Clause 5 reads: "Berkenhoff and GTN shall take all necessary steps to ensure the maintenance of their respective patents for the duration of their lifetime and to work together to protect their respective patents against violations by third parties."
42.
Clause 6 reads: "Berkenhoff and GTN desire to intensify their joint activity in the form of a logistic function and/or management function (to be defined) to be performed by R. Malhotra for Berkenhoff in the USA. To this extent the parties are agreed that this agreement is of a provisional nature only and shall be supplemented or replaced by a more extensive agreement after clarification of further details. If no agreement is reached regarding logistic management within the next 12 months, GTN will no longer be obligated to provide such services."
43.
Clause 8 reads: "This Agreement and all obligations arising hereunder shall be subject in their entirety to the law of the Federal Republic of Germany. Any dispute arising hereunder shall be resolved by an arbitration panel consisting of three arbitrators in accordance with the arbitration procedure as prescribed by the German Institute of Arbitration (deutsche Institution für Schicdsgerich- tsbarkeit e.V. (DIS)) to the exclusion of the courts of ordinary jurisdiction. The arbitration be governed by the arbitration as aforesaid and supplemented where necessary by the German Code of Civil Procedure. The arbitration shall be conducted in English which is hereby deemed the contracting language."
44.
Attached to the License Agreement were general terms and conditions, referenced to in Clause 2 of the License Agreement14.
45.
On 18 November 2005, Claimant and Respondent 1 entered into an Addendum Agreement to the License Agreement ("Addendum Agreement"15). In this Addendum Agreement, they agreed "that Sumitomo Electric and its affiliated companies including but not limited to Sumi-Pac shall be designated as a third source for GTN whereby the number of designated third party sources shall not exceed three companies.
46.
In consideration for the aforesaid GTN accepts that it shall not enter into a business relationship with any manufacturer in Europe other than Berkenhoff to produce and supply gamma wires."

8. The "Side Agreement" of December 2004

47.
On 13, 14, and 21 December 2004, the Parties signed a Side Agreement16. The executed Side Agreement reads:
48.
"CCC confirms herewith in its capacity as owner of the US Patents Nos. US 5,945,010; CA 08,886,483 (Appl.No.) and EP 1,009,578, that GTN up until December 13, 2004 is, and shall remain in the future so long as GTN satisfies its obligations, the exclusive and unlimited licensee of all products which are the subject of the patents referred to aforesaid in the entire field of gamma phase technology. CCC undertakes that no further licence has been or will be granted to third parties.
49.
CCC hereby approves the Agreement dated 16, November 2004 between Berkenhoff and GTN.
50.
GTN is entitled to have products of gamma phase technology manufactured by the companies Paps in Korea and Swil in India and by a company owned or controlled by GTN.
51.
Berkenhoff and GTN undertake not to grant any further licences to manufacture to third parties other than those aforesaid.
52.
In consideration for the aforesaid Berkenhoff herewith withdraws its appeal against the patent owned by CCC EP 1,009,574 in Europe."

9. Respondent 2’s letter of 26 September 2006

53.
By letter of 26 September 200617 Respondent 2 informed Respondent 1 that it must "insist on a change in the licensing agreement between our respective organizations regarding U.S. Patent 5,945,010". While Respondent 2 "appreciate[d] the fact GTN worked hard in trying to reach a compromise with Berkenhoff GmbH that would facilitate the resolution of the pending infringement issue while honoring the existing agreements with Berkenhoff, GTN, and CCC", Respondent 2 stated that it would be "evident that GTN’s exclusive po sition became the issue preventing any such compromise from being achieved with Berkenhoff". Therefore Respondent 2 insisted that "GTN’s license be changed from one of exclusive rights to one of non-exclusive rights".
54.
Respondent 2 "fully appreciate[d] the fact that GTN must be compensated for its prior investment in developing the market for gamma wires".
55.
Respondent 2 expressed its hope to reach "a timely agreement on this matter which will in turn facilitate the resolution of the Thermocompact infringement issue".

10. Respondent 1’s letter of 15 October 2007

56.
By letter of 15 October 200718 Respondent 1’s counsel "formally terminate[d] and cancell[ed]" the License Agreement and the Side Agreement. It based its termination on the "legal unenforceability and invalidity’ of the License Agreement and the Side Agreement, or, in the alternative, on Claimant’s "various material breaches" of the License Agreement and the Side Agreement, "as set forth in part in [its] letter of September 17 [2007]"19.

11. The Proceedings before the state courts of Ohio

57.
On 12 October 2007, Respondent 2 filed a complaint20 against Claimant and Respondent 1 with the Court of Common Pleas in Warren County, Ohio. In this complaint Respondent 2 asserted several claims both against Respondent 1 and Claimant. In its complaint Respondent 2 stated21 that it "entered into the Side Agreement as part of an effort to achieve a settlement of patent disputes with Berkenhoff’. In addition, it stated that the Side Agreement "references a certain patent cross-licensing agreement between GTN and Berkenhoff dated November 16, 2004" (the License Agreement) and that it entered into the Side Agreement "in reliance upon GTN and Berkenhoff fulfilling their respective obligations under the [License] Agreement". Respondent 2 argued that both Claimant and Respondent 1 breached their obligations by failing to abide by their obligations to protect the CCC Patents which obligation was - according to Respondent 2 - laid down In Section 5 of the License Agreement.
58.
On 15 October 2007, Respondent 1 filed its reply to Respondent 2’s complaint and a counterclaim against Repondent 2 as well as cross-claims against Claimant22.
59.
On 16 December 2007, Respondent 2 filed a motion to amend its complaint.
60.
On 19 December 2007, Claimant filed its motion to stay the proceedings before the state courts of Ohio pending arbitration.
61.
On 26 December 2007, Respondent 2 filed its reply to Respondent 1’s counterclaim.
62.
On 16 January 2008, Respondent 1 filed its motion to enjoin Claimant from arbitration. On the same day Respondent 2 filed an amended complaint23. In the amended complaint Respondent 2 still argued that both Claimant and Respondent 1 breached their duty to protect the CCC Patents24. It dropped, however, its previous claims against Claimant for unjust enrichment and tortious Interference.
63.
On 30 January 2008, the Ohio court granted Respondent 2’s motion to file an amended complaint and held Claimant’s motions in abeyance.
64.
On 3 February 2008, Respondent 1 filed its answer to the amended complaint by Respondent 2.
65.
On 6 March 2008, the Magistrate’s Decision was rendered25. It held that all proceedings in Ohio with the exception of Respondent 1’s "claim for tortious interference with business relations against" Claimant were ordered stayed. The Magistrate Decision, inter alia, held that Respondent 2 is estopped from arguing that it was not bound by the arbitration clause because it asserted claims as a direct and intended third party beneficiary under the License Agreement. As regards Respondent 1’s claims, it held that all of Respondent 1’s claims were subject to the arbitration clause in the License Agreement ex cept for its claims for tortious interference wherein Respondent 1 claimed that Claimant caused, or attempted to cause, suppliers of Respondent 1 to cut off Respondent 1.
66.
All parties filed objections to the Magistrate’s Decision.
67.
On 9 October 2009, the Common Plea Judge overruled26 Respondents’ objections to the Magistrate Decision.
68.
On 9 November 2009, Respondent 2 filed its notice of appeal27 against this decision.
69.
On 25 January 2010, Respondent 2 filed its appellant’s brief.
70.
On 10 March 2010, Claimant filed its appellee’s brief.
71.
On 12 April 2010, Respondent 2 filed its reply.
72.
On 14 June 2010, the Court of Appeals rendered its decision28 on the appeal. The Court affirmed the judgment of the prior instance. It held, inter alia, that Respondent 2 was bound to arbitrate because it was seeking a benefit under the License Agreement.

12. Further facts of the case

73.
The above summary is meant to reflect those facts that the Tribunal considered most important but is not intended to reflect every single fact, or factual allegation made, in the course of the arbitration. In rendering its decision, the Tribunal considered all facts, and all factual allegations that were made part of the file, and not only the ones summarized above.

C. Executive Summary of the parties’ positions

74.
In line with the spirit of the previous paragraph, the Tribunal in the following will summarize the Parties’ respective positions by focusing on the Parties’ main arguments. In rendering its decision, the Tribunal, however, considered all of the arguments made by the Parties, and not only the ones mentioned in the summary below.

1. Claimant’s Position

75.
None of the claims asserted by Respondents in the Ohio litigation are justified. The fact that Respondent 1 filed its answer to Respondent 2’s complaint (and cross-claims against Claimant29) on the very same day when such complaint was filed shows that Respondents had coordinated their strategy.
76.
By its request for arbitration, Claimant wants to have declared that all of the claims asserted by Respondents against Claimant are without merits.
77.
Respondent 1’s claims lack merit because they wrongly presume that Claimant entered into an agreement with Respondent 1 which would go beyond the wording of the written License Agreement. However, contrary to the allegations of Respondent 1, the License Agreement comprises all of the Parties’ agreements reached. While there might have been discussions on various other issues, no agreement has been reached on those issues. There was no oral agreement beyond the plain language of the License Agreement signed.
78.
The Berkenhoff Patents and the CCC Patents cover similar or identical technology. The License Agreement was intended to settle any potential conflict between those patents. That was Respondents’ main interest when entering into the License Agreement and subsequently into the Side Agreement.
79.
Since Claimant has complied with all its obligations under the License Agree ment, and since there are no obligations other than the ones laid down in the written License Agreement, there was no reason for Respondent 1 to terminate it. Respondent 1’s termination is consequently void and the License Agreement still valid. The same applies with respect to the Side Agreement. Further, absent a breach of contract by Claimant, Respondent 1 has no claim for damages against Claimant. It is rather Claimant that is entitled to damages due to Respondent 1's wrongful termination.
80.
Claimant has also not breached its obligations, if any, under the Side Agreement. Respondent 2’s termination of the Side Agreement, or respectively its "downgrading" of the exclusive license to a non-exclusive license, was void. The Side Agreement and the exclusivity confirmed by Respondent 2 in the Side Agreement remain in place.
81.
Since Respondent 2 nevertheless granted a license to Thermocompact, Respondent 2 is in breach of the Side Agreement, and liable to Claimant for damages.

2. Respondent 1’s Position

82.
While Respondent 1 had first objected to the jurisdiction of this al30,Respondent 1 subsequently expressly accepted the Tribunal’s power to decide this case on the basis of the valid arbitration clause in the License Agreement.
83.
Respondent 1’s claims arise out of Claimant’s improper efforts to eliminate Respondents from the EDM wire business. Claimant knew that Respondent 1 had access to Respondent 2’s CCC Patents. It induced Respondent 1 to enter into the License Agreement, and thus to grant Claimant access to Respondent 2’s superior technology in the form of the CCC Patents, by making false prom ises and creating false expectations.
84.
Already in 2003, Thermocompact, Claimant’s main competitor, had ap proached Respondent 1 to discuss a possible cooperation with Respondent 1. Claimant was interested in preventing Respondent 1 from entering into a closer cooperation with Thermocompact and made various offers to Respondent 1. In September 2004, Thermocompact made a very attractive offer for a sub-license from Respondent 1 for the CCC Patents. In addition, it offered to provide Respondent 1 with private label wire at a substantially discounted price.
85.
In order to prevent Respondent 1 from entering into an arrangement with Thermocompact, Claimant offered Respondent 1 a more attractive package, which was negotiated in a meeting in Ohio on 15 and 16 November 2004.
86.
During that meeting Claimant and Respondent 1 entered into a cooperation agreement that consisted of an oral and a written part. The written part is re flected by the wording of the License Agreement.
87.
The oral part included Respondent 1’s right to receive a certain discount on Claimant’s master dealer prices for all the private label wire purchased by Respondent 1 from Claimant. This oral agreement on the prices was not put down in writing for anti-trust issues.
88.
In addition, the oral part includes Claimant’s obligation (1) to sell to Respondent 1 all the private label wire Respondent 1 requires (at a discount price) and (2) to purchase from Respondent 1 all of its requirements of economy grade gamma wire.
89.
Respondent 1 only entered into the License Agreement with Claimant because it offered a "win-win situation". Had Claimant not made its promises concerning the favorable price, Respondent 1 could have entered into a cooperation with Thermocompact, Claimant’s main competitor. For Respondent 1, the oral part of the agreement was important in order to be able to fulfill its mandatory royalty obligations to Respondent 2 under the Revised License Pa- tent Agreement.
90.
Respondent 1 further argued that there were additional issues orally agreed upon. Those issues included, inter alia, the providing of storage or other logistical services by Respondent 1. However, in its PHB, Respondent 1 did not further elaborate on those issues.
91.
Further, originally, Respondent 1 had argued that Claimant had made certain promises with respect to a potential acquisition of Respondent 1 by Claimant or any other business arrangement between Claimant and Respondent 1. In its PHB, Respondent 1 likewise did not elaborate on this issue.
92.
According to Respondent 1, Claimant breached various obligations of the agreements reached.
93.
In the R 1 Answer as well as in its Amendment Statement of Defence, Respondent 1 argued that Claimant failed to comply with Clause 5 of the License Agreement by failing to protect the CCC Patents.
94.
In addition, Respondent 1 argued that Claimant breached its obligations by not purchasing from Respondent 1 its requirements of economy gamma phase EDM wire, by continually failing to supply Respondent 1 with private label wire at the agreed upon discounted price, and by not honoring the agreement concerning the provision of storage and/or shipment or distribution services or re spectively by not negotiating or entering into such an agreement. As regards Claimant's obligation to supply Respondent 1 with discounted private label wire, Claimant first complied with this obligation. However, in 2005, Claimant stopped offering its products at discounted rates as agreed upon on 16 November 2004.
95.
For those reasons, Respondent 1 was entitled to terminate the License Agreement and the Side Agreement, which Respondent 1 did by letter of 15 October 200731.
96.
In case the termination should turn out to be void, Respondent 1 has an interest to seek declaratory relief outlining in detail Claimant and Respondent 1's obligations and rights under the License Agreement.

3. Respondent 2’s Position

97.
Respondent 2 initiated the litigation before the courts in Ohio in order to pro tect its CCC Patents. Respondent 2 based this action on the fact that the con- tracts Respondent 2 entered into were governed by the laws of the State of Ohio and provided for the jurisdiction of the courts of the State of Ohio.
98.
Consequently, Respondent 2 objects to this arbitration. The Side Agreement does not contain an arbitration clause itself and it neither includes a reference clause to a valid arbitration agreement. To the extent that the Side Agreement could be considered to be an "ancillary" agreement, this must be interpreted as a reference to the Revised Patent License Agreement. There is in any event no reference to the License Agreement. In particular, the clause "CCC hereby approves the Agreement dated November 16, 2004 between Berkenhoff and GTN’ does not suffice as valid reference to the arbitration clause in the License Agreement. In addition, the arbitration clause in the License Agreement is void since it is in contradiction to the clause in the general terms and conditions, referred to in Clause 2 of the License Agreement, which pro vides for the jurisdiction of state courts in Germany.
99.
Respondent 2 never agreed to arbitrate in Germany, and it never would have agreed to do so. It would be unconscionable to require Respondent 2 to arbi trate in Germany.
100.
The Revised Patent License Agreement was executed in Ohio, is governed by the laws of the State of Ohio, and subject to the jurisdiction of the courts on Ohio.
101.
Claimant was aware of Respondent 1's access to Respondent 2’s CCC Pa tents and wanted to gain access to Respondent 2’s technology. The CCC Pa tents are superior to the Berkenhoff Patents which is why Claimant wanted to obtain access to the CCC Patents. In order to achieve this goal, it initiated a baseless challenge to Respondent 2’s EP 1 009 574 at the time when it negotiated with Respondent 1 for a sub-license to the CCC Patents.
102.
By its letter of 26 September 200632 Respondent 2 downgraded Respondent 1’s license from an exclusive one to a non-exclusive one. Respondent 2 was entitled to do so. At the beginning of the arbitration33, Respondent 2 argued that this right followed from both Respondent 1 and Claimant’s failure to protect its patents. Respondent 2 later gave this argument up34 and based its right to downgrade the license on Respondent 1’s failure to protect its patents. According to Respondent 2, Respondent 1’s compliance with its obligations was a condition subsequent to the validity of the Side Agreement and Respondent 2’s commitments under this agreement.

D. The prayers for Relief

1. Claimant’s Prayers for Relief

103.
In its RfA, Claimant submitted the following Prayers for Relief.

I. With regard to Respondent 1:

(1.1) It is declared that a valid licence agreement dated 16 November 2004 exists between Claimant and Respondent 1 pursuant to which Claimant shall35 be entitled to use the patents US 5,945,010 and/or CA 08886483 (Appl. No.) and/or EP 1009574 exclusively and/or gratuitously and/or worldwide to manufacture and/or use and/or offer and/or sell all gamma phase products.

(1.2) It is declared that a valid side agreement to the licence agreement dated 16 November 2004, dated 13, 14 and 21 December 2004 exists between the parties.

(1.3) It is declared that the termination of the licence agreement dated 16 November 2004 and/or the side agreement dated 13, 14 and 21 December 2004 by the Respondent 1 as declared on 15 October 2007 is invalid.

(2) It is declared that Respondent 1 does not have a claim for damages based on an infringement of the licence agreement dated 16 November 2004 by the Claimant.

(2.1) It is declared that the Claimant is not obligated to purchase Respondent 1's outputs of economy gamma phase EDM wire.

(2.2) It is declared that the Claimant is not obligated to supply Respondent 1 its requirements of private label wire.

(2.3) It is declared that the Claimant is not obligated to enter into an arrangement to give Respondent 1 the opportunity to provide management and/or storage and/or shipment and/or other logistical services.

(3) It is declared that Respondent 1 is obligated to compensate the Claimant for all damages that the Claimant has incurred or will in the future incur due to the wrongful termination of the licence agreement dated 16 November 2004 by Respondents 1.

(4) It is declared that Respondent 1 has no claim for damages on the basis of an infringement of an oral agreement concerning the provision of storage and/or shipment and/or distribution services to the Claimant.

(5) It is declared that Respondent 1 does not have a claim for damages on the basis of misrepresentations of the Claimant about its willingness to acquire, in whole or part, equity and/or assets of Respondent 1 and/or its affiliate Kern Special Tool Company Inc. and/or its willingness to enter into a joint venture and/or any other form of partnership with Respondent 1.

(6) It is declared that Respondent 1 does not have a claim for damages based on any interference of the Claimant with Respondent's 1 business relations with customers and/or potential customers and/or suppliers.

II. With regard to Respondent 2:

Claimant originally submitted the following prayers for relief with respect to Respondent 2:

(1.1) It is declared that the Claimant did not breach an obligation to Respondent 2 requiring the Claimant to maintain its patent rights from infringement by third parties and/or to cooperate with Respondent 2 to protect Respondent 2's patents against violations by third parties.

(1.2) It is declared that Respondent 2 does not have a claim for damages on the basis of an infringement of contractual obligations of the Claimant owed to Respondent 2 as set out in claim 1.1.

(2.1) It is declared that the contract entered into by the Parties on 14 December 2004 (Side Agreement) remains valid and has not been validly terminated by Respondent 2.

(2.2) It is declared that Respondent 2 is obligated not to grant licences to use the patents US 5,945,010 and/or CA 08,886,483 (Appl. No) and/or EP 1,009,578 to third parties.

(3) It is declared that the Claimant is not obligated to pay damages and/or compensation and/or other sums of money to Respondent 2 on the basis of the principles of unjust enrichment in the context of the conclusion and the implementation of the Side Agreement entered into between the Parties on 14 December 2004 and/or the Cross Licence Agreement entered into between the Claimant and Respondent 1 on 16 November 2004

(4) It is declared that Respondent 2 does not have claims for damages on the basis of an unlawful interference with the contractual relations between Respondent 1 and Respondent 2 and/or any other influence exerted by the Claimant on Respondent 1.

However, in its brief of 31 May 2010, Respondent 2 gave a binding declaration to drop its previously asserted claims with respect to the claims covered by 1.1, 1.2, 3, and 4 above

Claimant therefore declared its own claims in that respect settled ("fur erledigt erklären") by its brief of 2 November 2010. In the same brief, Claimant extended its claims with respect to Respondent 2 (see the Prayer for Relief III (3) and (4) below).

III. Consequently, Claimant’s prayers for reliefs to be decided upon by the Tribu-nal are the following:

(1) It is declared that the contract entered into by the Parties on 14 December 2004 (Side Agreement) remains valid and has not been validly terminated by Respondent 2.

(2) It is declared that Respondent 2 is obligated not to grant licences to use the patents US 5,945,010 and/or CA 08,886,483 (Appl. No) and/or EP 1,009,578 to third parties.

(3) It is declared that Respondent 2 is obligated to compensate Claimant for all damages incurred by Claimant up until now and in the future as the result of Respondent 2's wrongful termination of the Side Agreement dated 21 December 2004 and its breach of its obligation to not grant licenses to third parties.

(4) Respondent 2 is sentenced to provide Claimant with information to the extent and duration of its actions pursuant to claim 3 above by means of a complete and orderly directory, especially containing specifications to the revenue, acquisition, costs and profits resulting from actions pursuant to claim 3 above.

2. Respondent 1’s Prayers for Relief

104.
Respondent 1 requests

(1) that Claimant’s claims be dismissed.

Furthermore, Respondent 1 submitted the following counterclaims in relation to the Claimant:

(2) It is declared that Respondent 1 validly terminated the Agreement dated 16 November 2004 between Claimant and Respondent 1 with its notice of 15 October 2007.

(3) It is declared that Respondent 1 validly terminated the Side Agreement dated 13/14/21 December 2004 between Claimant, Respondent 1 and Respondent 2 with its notice of 15 October 2007.

(4) It is declared that Claimant breached its obligations under the agreement dated 16 November 2004 and is obligated to compensate Respondent 1 for all damages caused by its breaches.

and in the alternative (hilfsweise) if the Tribunal comes to the conclusion that Respondent 1’s termination of Agreement dated 16 November 2004 was not valid Respondent 1 asks the Tribunal to render a declaratory judgment as follows:

(5) It is declared that the Agreement dated 16 November 2004 does not grant Claimant an exclusive license to utilize Respondent 2's patents.

However, Respondent 1 withdrew this claim that was originally numbered 5 during the Hearing36.

(6) It is declared that Claimant is under a continuing obligation to sell to Respondent 1 all the private label wire that Respondent 1 requires and that Claimant is under a continuing obligation to purchase from Respondent 1 all of Clai mant’s requirements of economy grade gamma wire.

(7) It is declared that Claimant is under a continuing obligation to sell to Respondent 1 all the private label wire that Respondent 1 requires at a price at least 10 to 15% less than the lowest price charged by Claimant to any of its master dealers.

(8.1) It is declared that Respondent 1 can substitute the entities identified in the Agreement dated November 16, 2004 and the Addendum Agreement dated November 18, 2005 permitted to utilize the purported exclusive worldwide gratuitous license to manufacture all gamma phase products as long as the number of third party sources does not exceed three companies and the companies are located outside of Europe.

And in case the Tribunal should come to the conclusion that claim 8.1 cannot be granted, Respondent 1 auxiliary (hilfsweise) asks the Tribunal to render a declaratory award as follows:

(8.2) It is declared that Respondent 1 can substitute the entities identified in the Agreement permitted to utilize the purported exclusive worldwide gratuitous license to manufacture all gamma phase products37.

(9) It is declared that Claimant is obligated to protect the CCC Patents, including by the payment to Respondent 1 and/or Respondent 2 of attorney’s fees incurred in protecting the CCC Patents.

(10) It is declared that Claimant is obligated to negotiate and enter into an arrangement with Respondent 1 for the provision of management and/or storage and/or shipment and/or other logistical services.

3. Respondent 2’s Prayers for Relief

105.
During the Hearing, Respondent 2 confirmed that it accepts Claimant’s declaration to declare its previous claims 1.1, 1.2, 3 and 4 settled38. It asked that Claimant be ordered to bear the cost of arbitration in that respect.
106.
With respect to Claimant’s pending claims, including the additionally asserted claims for damages (see Claimant's brief of 2 November 2010), Respondent 2 requests that those claims be dismissed.

E. Legal Analysis

1. Jurisdiction

107.
The Tribunal holds that it has jurisdiction in relation to all parties of the present arbitration. The Tribunal’s power to decide this case follows from the arbitra- tion clause in Section 8 of the License Agreement.

1.1. Jurisdiction with respect to Respondent 1

108.
There is no longer a dispute between Respondent 1 and Claimant about the Tribunal's jurisdiction to resolve their dispute arising from the License Agreement. Respondent 1 expressly39 withdrew any objections that it had raised in that respect at the beginning of the arbitration. As a consequence, Claimant and Respondent 1 are in agreement that the Tribunal’s power to decide the dispute between them is based on Section 8 of the License Agreement.

1.2. Jurisdiction with respect to Respondent 2

109.
The Tribunal holds that it has also jurisdiction with respect to Respondent 2. The Tribunal’s decision is based on two considerations.
110.
First, the Tribunal concluded that the Side Agreement contains a valid reference to the arbitration clause in Clause 8 of the License Agreement. The Tribunal considered the arguments of Respondent 2 to the contrary, but did not find them convincing for the following reasons:
111.
Already the name of the agreement ("Side Agreement") indicates that it is an agreement which was made in reference to another agreement. This other agreement was the License Agreement. In the opinion of the Tribunal this follows clearly from the wording of the Side Agreement. The only express reference to another agreement is the one to the "Agreement dated 16. November 2004 between Berkenhoff and GTN", i.e. the License Agreement. The Tribunal has considered Respondent 2’ argument that it was rather a side agreement to the Revised Patent License Agreement between Respondents, but did not find this argument convincing.
112.
Pursuant to the express wording of the Side Agreement, Respondent 2 "approved" the License Agreement between Claimant and Respondent 1. This is a clear reference to the License Agreement, and Respondent 2’s agreement to accept, i.e. "approve" the terms of the License Agreement. There is no indication that Respondent 2’s approval should not also cover the arbitration clause in Clause 8 of the License Agreement.
113.
The License Agreement is relatively short; it consists of three pages only, with ten clauses only. Its wording is relatively plain and simple. Its meaning can be understood without difficulties, including the content of the arbitration clause.
114.
The Tribunal is convinced that Dr. Tomalin, who acted for Respondent 2, saw the License Agreement before he signed the Side Agreement. Dr. Tomalin stressed himself that he had stated at that time that he "can’t sign something that [he] never [has] read"40. Given the importance of the CCC Patents to him as inventor, the Tribunal finds it implausible that he might have "blindly" signed the Side Agreement without having even looked at the License Agreement. This is even more the case since Respondent 2, in its letter of 14 April 2004, had expressly asked for the execution of a side agreement in case Respondent 1 and Claimant would enter into a license agreement concerning the CCC Patents. This history shows that Respondent 2 could not have been surprised when he was asked to sign the Side Agreement, since he himself had asked for it long time ago.
115.
While Dr. Tomalin, when he was asked whether he had shown the Side Agreement to his lawyer, was unable to clearly recall the sequence of events, he expressed his belief that he had showed to his counsel the documents before he signed the Side Agreement41. Again, in view of the importance of the CCC Patents to Dr. Tomalin and Respondent 2, the Tribunal is convinced that Dr. Tomalin was right when he stated in the Hearing his belief that he had asked his counsel prior to the execution of the Side Agreement for his advice.
116.
As a consequence, both Dr. Tomalin and his legal adviser must have read the arbitration clause in Clause 8 of the License Agreement. By "approving" it, Respondent 2 accepted also to be bound by the arbitration clause.
117.
Under German law, pursuant to Section 1031 (HI) of the Code of Civil Procedure, a reference to an arbitration clause in another contract is sufficient for the constitution of a valid arbitration clause. There is case law42 pursuant to which actual knowledge of the arbitration clause in the referenced document is not even required as long as the other party had a reasonable opportunity to take note of the clause. The Tribunal is convinced that Respondent 2 had an opportunity to take note of the arbitration clause. Based on Dr. Tomalin's witness examination, the Tribunal is even convinced that he, and his counsel, read the License Agreement and thus also took note of the arbitration clause In the License Agreement. There is no doubt that the other parties to the Side Agreement, Claimant and Respondent 1, knew of the existence of the arbitration clause in the License Agreement when they entered into the Side Agreement. As a consequence, by way of reference, the arbitration clause in the License Agreement became part of the Side Agreement, too.
118.
Since the issue of whether or not there is a valid arbitration clause is governed by German law, as Germany is the seat of the arbitration, the Tribunal does not have to deal with the question whether it would also have jurisdiction if US law were applicable. However, suffice it to say that also under US law a non-signatory to a contract is bound by the arbitration clause in the contract in case of a valid incorporation by reference. This was confirmed, inter alia, by the Magistrate’s Decision43.
119.
Furthermore, the Tribunal can see no plausible reason to follow Respondent 2’s argument that it would be unreasonable, and an undue hardship, to bind Respondent 2 to the arbitration clause. In all developed jurisdictions arbitration has been recognized as a proper means of settling disputes between parties. This is particularly true for cases with an international dimension. Not only un-der German law, but also under US law, state courts recognize the validity of arbitration clauses and respect them as the parties’ will not to bring their dis putes before a state court. Since under arbitration, parties have an equal opportunity to defend their interests, keeping a party bound to an arbitration clause does not deprive this party from seeking justice. The Ohio courts left no doubt that also from a US law perspective there is no reason to accept Respondent 2’s argument that binding Respondent 2 to the agreement to arbitrate would be unconscionable. As rightly stated in the Magistrate’s Decision: "Un conscionability is not - and indeed cannot be - a recognized defense to the enforceability of arbitration agreements falling under the New York Conven tion". The Tribunal shares this view.
120.
The Tribunal also rejects Respondent 2’s view that the arbitration clause in the License Agreement itself was void. To the extent that Respondent 2 argued that there was a contradiction between the general terms and conditions (re ferred to in the License Agreement) and the arbitration clause in Clause 8 of the License Agreement, the Tribunal disagrees. As already held by the Ohio courts, the general terms and conditions should govern any future sale of goods referred to in the License Agreement. If at all, the jurisdiction clause of the general terms and conditions would govern only such future sales. The (basic) License Agreement itself is governed by the arbitration clause in section 8 of the License Agreement.
121.
In addition, even if there were a conflict, the individual agreement in the License Agreement would supersede any standard term in the general terms and conditions.
122.
In conclusion, there is no irreconcilable conflict between the jurisdiction clause in the general terms and conditions and the arbitration clause in Clause 8 of the License Agreement, which conflict could void the arbitration clause in the License Agreement.
123.
For those reasons, the Tribunal concludes that there is a valid and sufficient reference in the Side Agreement to the valid written arbitration clause in the License Agreement with the consequence that the arbitration clause in the License Agreement applies to, and binds the Parties of, the Side Agreement, too.
124.
Second, Respondent 2 asserted rights resulting from the License Agreement. Under German law, like under US law (and as applied by the Ohio courts) Respondent 2 that itself relied on the License Agreement is bound by the arbitration clause in the License Agreement
125.
When this arbitration started, Respondent 2 had asserted the claim against Claimant for Claimant’s breach of its alleged obligation under the License Agreement to protect the CCC Patents. Respondent 2 thus asserted claims as an intended third-party beneficiary44 under the License Agreement. Those claims, as well as Claimant’s counterclaims relating to this issue are subject to the arbitration clause in the License Agreement, and must be resolved in this arbitration.
126.
The Tribunal further concludes that this result is unaffected by Respondent 2's change of argument in the course of the arbitration. While Respondent 2, at the beginning of the arbitration, had asserted that Claimant breached obligations under the License Agreement by not protecting the CCC Patents, Respondent 2 changed its line of argument by no longer relying on a breach by Claimant, but rather on a breach by Respondent 1 (for not having protected the CCC Patents). This change of arguments does not affect the Tribunal's jurisdiction.
127.
Since Respondent 2 had asserted claims as third-party beneficiary under the License Agreement when this arbitration started, Respondent 2 was bound by the arbitration clause in the License Agreement. The Tribunal consequently had jurisdiction for the claims asserted by Claimant when this arbitration started. Claimant never dropped these claims. Claimant's claims are also not affected, or depend upon, any claims asserted by Respondent 2 in this arbitra tion. Hence, Respondent 2’s reliance45 on its right under German procedural law to change its pleading is of no relevance in that respect.
128.
All prayers for relief of Claimant relate to the issue of whether or not Respon dent 2 was entitled to terminate the Side Agreement or to downgrade the ex clusivity of the license granted. Originally, Respondent 2 had justified its right to do so by the argument that both Respondent 1 and Claimant had an obliga tion to protect its CCC Patents under the License Agreement. Since Respondent 2 thus enforced rights under the License Agreement as third party beneficiary, it was, and is, estopped from arguing that the arbitration clause does not apply. Due to the close connection of all claims by Claimant to Respondent 2’s reliance on the License Agreement, the Tribunal had jurisdiction to decide those claims when the arbitration commenced. The Tribunal’s jurisdic tion remains unaffected by Respondent 2's subsequent decision to rely only on a violation of Respondent 1’s alleged obligation to protect its CCC Patents resulting from the Revised Patent License Agreement.
129.
The fact that Respondent 2 in the course of the arbitration raised a different argument (and possibly new claims against Respondent 1) does not, and cannot alter the fact that originally Respondent 2 had raised certain claims against Claimants. Those claims were based on the argument (wrongly or rightly) that Claimant breached an obligation vis-à-vis Respondent 2 resulting from the License Agreement. Claimant considered those claims unfounded and brought its action for declaratory relief. As long as Claimant does not drop, or amend, its claims in that respect against Respondent 2, the Tribunal's jurisdiction re mains unaffected by any new argument made by Respondent 2 after the initia tion of the arbitration.
130.
Since the issue of jurisdiction must be decided under German law, as Frank furt, Germany, is the seat of arbitration, it is not relevant how the situation would be if US law were applicable. Still, the Tribunal notes that also the Court of Appeals in the State of Ohio held that Respondent 2 was bound to arbitrate. It is noteworthy that this decision by the Ohio Court was rendered on 14 June 2010 and thus at a time when Respondent 2 had already changed its line of argument and had already dropped the argument that it only relies on an alleged breach by Respondent 1 to protect its CCC Patents, and no longer on any breach by Claimant.

1.3. Interim Conclusion

131.
In conclusion, the Tribunal affirms its jurisdiction also with respect to the claims raised by Claimant against Respondent 2 in connection with the Side Agreement.

2. Claimant’s rights and obligations vis-à-vis Respondent 1

2.1. The Scope of the License Agreement

132.
In its cross-claims against Claimant filed on 15 October 2007 in Ohio, Res pondent 1 stated that the License Agreement "left material terms open to fu ture negotiations"46. Having heard all arguments by the Parties, and in particular the testimony of the witnesses who testified on the events during the Hearing on 15/16 November 2004, the Tribunal came to the conviction that the License Agreement, as written and signed by the Claimant and Respondent 1, reflects all the terms on which Claimant and Respondent 1 had reached an agreement on 16 November 2004. While there was certainly a discussion about further and additional issues to be negotiated, and with respect to which Claimant and Respondent 1 might have wanted to reach also an agreement in the future, based on the statements by all witnesses, the Tribunal concludes that none of those other discussed agreements were final when Claimant and Respondent 1 signed the License Agreement on 16 November 2004. As stated by Respondent 1 Itself in its cross-claim: the License Agreement "left material terms open to future negotiations". Respondent 1's own statement in the cross-claim adequately reflects the flaw in Respondent 1's position. There is no convincing evidence that Claimant and Respondent 1 subsequently reached any further agreement on those other Issues, Absent such further agreement, the Tribunal is bound by the written terms of the License Agree ment.

a) Cross-license to settle potential disputes

133.
In the Preamble of the License Agreement, Respondent 1 and Claimant stated that they would enter into the License Agreement to avoid costly litigation resulting from the competing patents. Also Respondent 1’s witness, Dr. Brückmann, confirmed that such cross-license made sense47. The cross license consequently was an important motivation for the parties to enter Into the License Agreement.

b) No (oral) agreement on prices or discount

134.
Respondent 1 stressed in its PHB that it was common in the EDM market to enter into agreements orally. There is, however, a written agreement which was signed by both sides at the end of their negotiations. If there is a written agreement, there is a presumption that it reflects fully the parties’ agreement48.
135.
This presumption does not mean that the burden of proof for an oral agreement "is so high that its requirements can hardly ever be met"49. However, there must be clear and convincing evidence that the parties reached an agreement on issues orally and nevertheless did not want to lay this agree- ment down in writing. According to the applicable case law50 this is a "strict" requirement.
136.
In the case at hand, having considered the parties’ respective arguments in that respect and in particular the statements made by all witnesses, the Tribunal concluded that Claimant and Respondent 1 did not reach an agreement beyond the clear wording of the License Agreement:
137.
Mr. Jung testified51 that there were discussions about a closer cooperation in the future. These discussions might also have turned around the issue of how to "create a win-win situation" as argued by Respondent 1 in paragraph 45 et seq. of its PHB. However, based on the wording of the License Agreement and the assessment of the witness testimony, the Tribunal has come to the conclusion that the terms of such further issues were not yet fixed.
138.
Mr. Jung credibly stated that no binding agreement on prices or discounts was reached in the meeting on 15 and 16 November52. In particular with respect to whether or not a discount had been agreed upon, he stated that he "was absolutely sure that there was no side agreement" and that no specific discount was agreed upon53. Also Respondent 1’s witness, Dr. Brückmann, testified that no prices were fixed in that meeting54. According to his testimony, any agreement on prices or discounts was to be left for future discussions. As he stated, the parties "worked on trust in the future"55 but "this work has to be done later on"56.
139.
Both Mr. Jung’s and Dr. Brückmann’s statements matched in that respect. They confirmed that there were discussions about Claimant offering certain prices to Respondent 1. No agreement on this issue was reached, however, in the meeting on 15/16 November 2004. This was left open for future negotiations.
140.
Since the Tribunal is convinced, based on statements of witnesses presented by both Claimant and Respondent 1, that no oral agreement was reached on prices or discounts, it does not have to address in detail Respondent 1’s argument that Mr. Jung, as Claimant’s lawyer, took only care of putting down in writing what was in Claimant’s interest57. Suffice it to say that Respondent 1 also had its lawyer present who was responsible together with Mr. Jung for ensuring that the final text of the License Agreement would be in line with the agreement reached by Claimant and Respondent 1.

c) No obligation to purchase wire

141.
Pursuant to Clause 3 of the License Agreement, "neither party [to the License Agreement] is obliged to take delivery of a minimum quantity of wire". The Tribunal finds that this correctly reflects the agreement between Claimant and Respondent 1 not to require either side to purchase any wire from the other side. In particular, based on the evidence submitted, the Tribunal holds that there was no further oral agreement requiring Claimant to purchase all of its requirements of economy grade gamma wire exclusively from Respondent 1.
142.
In the Hearing, Mr. Jung credibly testified there were no binding obligations other than those laid down in writing58. He particularly confirmed that there was no requirement of the parties to purchase any wire from the other party59. This was also confirmed in the Hearing by Mr. Malhotra. He admitted that there was no obligation to purchase products from the other side60.
143.
All evidence, thus, confirms that there was no agreement, be it in writing or orally, obligating Claimant to purchase its requirement of economy grade wire from Respondent 1.

d) No management, storage, or other services

144.
The Tribunal is equally convinced that there was no binding agreement be tween Claimant and Respondent 1 concerning management, storage or other services. This was again credibly confirmed by Mr. Jung in his witness testimony. He expressly stated61 that no binding agreement was reached in that respect. Nothing on the record gives the Tribunal reason to doubt this statement.

e) Interim Conclusion

145.
The Tribunal finds that the written text of the License Agreement fully reflects the terms of the agreement reached by Claimant and Respondent 1 at the meeting of 15/16 November 2004. The Tribunal, in particular, finds that there was no oral agreement beyond the terms of the written License Agreement.

2.2. The Validity of the License Agreement and the Side Agreement

146.
In this arbitration Respondent 1 expressly admitted that the License Agreement originally constituted a valid contract.62 The only issue therefore is whether it was effectively terminated by Respondent 1.
147.
Having considered the arguments and evidence of the Parties, the Tribunal concluded that there was no valid reason for Respondent 1 to terminate the License Agreement.
148.
Respondent 1’s termination is based on its argument that Claimant breached some of its obligations under the License Agreement. All of those obligations allegedly breached by Claimant (except for the alleged breach of the obligation to protect the CCC Patents) are not reflected in the wording of the License Agreement but, according to Respondent 1, are part of an oral agreement, However, the Tribunal decided under Section 2.1 above that there was no oral agreement beyond the wording of the License Agreement. Absent any further obligation by Claimant, there was no basis to assume a breach of Claimant.
149.
The Tribunal does also not see a breach by Claimant of an obligation under the License Agreement to protect the CCC Patents (Clause 5 of the License Agreement).
150.
In that respect, the License Agreement provides in Clause 5 that Claimant and Respondent 1 "shall take all necessary steps to ensure the maintenance of their respective patents for the duration of their lifetime and to work together to protect their respective patents against violations by third parties." This clause cannot be interpreted as a unilateral obligation of Claimant to protect the CCC Patents, as Respondent 1 seems to argue. At best, it would be an obligation of both sides "to work together to protect their respective patents against viola tions by third parties". Respondent 1 has failed to convince the Tribunal that any of the allegations made (even if those allegations had been true and correct) would be tantamount to a breach of Claimant’s obligation to "work with Respondent 1 to protect their respective patents. The alleged failure by Claimant to protect the CCC Patents can consequently also not justify a termination of the License Agreement by Respondent 1. The same is true for Respondent 1's termination of the Side Agreement.
151.
Since Respondent 1's termination of the License Agreement was void, the License Agreement remains in place and in effect. There is consequently also no need to decide whether or not the termination of 15 October 2007 would have been time-barred or forfeited.

Accordingly, Respondent 1 remains obligated to honor the cross-licenses granted to Claimant.

152.
For those reasons, Claimant's claims No. 1.1, 1.2, and 1.3, are founded. The same true for Claimant’s claim No. 2 since Claimant did not violate any obligations under the License Agreement.

2.3. Claimant’s Damage Claim for Respondent 1's Wrongful Termination of the License Agreement

For the reasons stated above, Respondent 1’s termination was wrongful. This constituted a breach of contract by Respondent 1 entitling Claimant to damages.Therefore, Claimant’s claim No. 3 is founded.

2.4. No agreement on a strategic alliance between Claimant and Respondent 1

153.
Originally63 Respondent 1 had asked for declaratory relief based on its allega tion that Claimant falsely promised to enter into some kind of joint venture with Respondent 1 or acquire shares in Respondent 1. Respondent 1 subsequently dropped this claim. Also in the PHB, Respondent 1 no longer supported this argument.
154.
Based both on Respondent 1’s own change of arguments and on the facts and documents submitted to the Tribunal, the Tribunal finds that Claimant did not breach any obligation to acquire shares in Respondent 1 or enter into a joint venture with Respondent 1 (together called "strategic alliance").
155.
While there were certainly discussions and negotiations between Claimant and Respondent 1 about such possible "strategic alliance", Respondent 1 did not convince the Tribunal that such discussions resulted in a binding commit ment by Claimant. To the contrary, there are various indications that the par ties mutually gave up the idea of a closer strategic alliance between Claimant and Respondent 1 or any affiliate of Respondent 1.
156.
As regards any discussions between the parties prior to the meeting in Ohio in November 2004, Respondent 1 itself stated that any negotiation remained in the end fruitless which is why Mr. Malhotra of Respondent 1 informed Clai mant that the idea of selling Respondent 1’s undertaking was "off the table"64.
157.
The Tribunal is convinced that the same conclusion applies to any discussions between the parties after the meeting in Ohio in November 2004. First, by way of the Mutual Cancelation Memorandum of Understanding of 22 July 200565 Claimant and Respondent 1 agreed to cancel the Memorandum of Under standing dated 13 June 200566. Claimant and Respondent 1 had entered into this memorandum in order to evaluate the possibilities of a "strategic alliance". By expressly "cancelling" this memorandum, Claimant and Respondent 1 do cumented their joint intention, and will, to give up the idea of a "strategic ailiance" in the form of closer corporate links. Second, it follows from Mr. Malho tra's (Respondent 1’s shareholder) e-mail of June 30, 200567 that it was him who "changed the position" with respect to the discussed closer alliance. In fact, it was him who suggested terminating the earlier Memorandum of Under standing.

Against that background, the Tribunal sees no factual basis for the allegation that Claimant made false promises which promises it then failed to fulfill. Therefore, Claimant's claim No. 5 is founded.

2.5. No Right to substitute entities identified in License Agreement and Addendum Agreement of 18 November 2005

158.
Respondent 1 has requested the Tribunal to confirm that it is entitled to substitute the entities through which it is entitled to utilize the exclusive license obtained under the License Agreement (counterclaim No. 8). However, there is no legal basis for the Tribunal to modify the parties’ agreement in that respect.
159.
Pursuant to the License Agreement, Respondent 1 was granted the license to the Berkenhoff Patents, including the license to manufacture all gamma phase wires "through the companies Paps/Korea, Swil/lndia and GTN owned or con trolled companies".
160.
By the Addendum Agreement, Claimant and Respondent 1 amended this agreement by stipulating that "Sumitomo Electric and its affiliated companies including but not limited to Sumi-Pac shall be designated as a third source for GTN whereby the number of designated third party sources shall not exceed three companies."
161.
The fact that Claimant and Respondent 1 saw the need to enter into this Addendum Agreement indicates that Respondent 1 was not free to substitute unilaterally the entities through which it could have manufactured gamma phase wires. It was only by way of the Addendum Agreement that Sumitomo Electric was accepted by Claimant as another source for Respondent 1.
162.
The Tribunal was not provided with any information why any of those sources was agreed upon. It does consequently not know whether it mattered that those specific companies were mentioned. The Tribunal was, in particular, not provided with any information or allegation that Claimant and Respondent 1 might have agreed that Respondent 1 could unilaterally substitute the entities, can substitute the entities as long as the number of companies does not exceed three and the companies are located outside Europe. Absent any clear agreement between Claimant and Respondent 1 to substitute any of those entities mentioned in the License Agreement or Addendum Agreement, the Tribunal does not see a basis to confirm that Respondent 1 has unilaterally the right to substitute those entities, including the right to substitute those enti ties as long as the number of third party sources does not exceed three com panies and the companies are located outside of Europe. This would result in an amendment of the executed agreement of the parties through the Tribunal. The Tribunal has no power to do so.
163.
The Tribunal, in particular, disagrees with Respondent 1’s argument that it followed from the Addendum Agreement that the parties were "flexible" in that respect and that Claimant permitted Respondent 1 to add sources for wire. All that follows from the Addendum Agreement is that Claimant was flexible in en tering into an amendment of the previous agreement by specifically adding Sumitomo Electric as another source. In the Tribunal’s view this does not allow to follow from this Addendum Agreement that Claimant was indifferent to the specific company added as source. To the contrary, as stated above, the very fact that the parties saw the need to execute an Addendum Agreement shows that Respondent 1 was not free to substitute those entities unilaterally. Neither does such right follow from the clause in the License Agreement pur suant to which "both parties are at liberty to develop, manufacture, and sell new generations of gamma phase wires". In that respect the more special clause limiting the sources of gamma phase wires to those entities mentioned in the License Agreement would be "lex specialis".

2.6. No Interference

164.
In the Ohio Court litigation Respondent 1 had asserted a claim against Clai mant for tortious interferences with business relations68. In its Amendment Statement of Defence Respondent 1 stated that it "elected not to pursue fur this" claim69. However, as long as Respondent 1 has not signed a binding declaration in that respect confirming that it no longer will raise such claim, Claimant has a legal interest in having clarified that Respondent 1's claim was unjustified.
165.
In the action for a negative declaratory award, Respondent 1 has the burden to prove that it had such claim. Since Respondent 1 has failed to meet this burden of proof, and even elected to drop its claim, Claimant’s claim for nega tive declaratory relief in that respect (Claim No. 6) is consequently justified.
166.
As all of Claimant’s claims are justified, Respondent 1’s counterclaims, which are reciprocal to Claimant’s claims, are to be dismissed.

3. Claimant’s rights and obligations vis-à-vis Respondent 2

167.
Claimant has asked for declaratory relief concerning the issue of whether or not Respondent 2 validly terminated the Side Agreement. If there was no valid termination by Respondent 2, then all of Claimant’s claims are justified be cause (1) the Side Agreement then remains valid, (2) Respondent 2 remains obligated not to grant licenses concerning its CCC Patents to third parties, (3) Respondent 2 must compensate Claimant for its wrongful termination and breach of its obligation not to grant licenses to third parties, and (4) Respon dent must render an account on its breaches to allow Claimant to determine the amount of damages owed due to the breach.
168.
Originally, Respondent 2 terminated the Side Agreement because of the al leged breach of Claimant and Respondent 1’s (alleged) obligation to protect the CCC Patents. Still in its Amendment Statement of Defence of 15 Decem ber 2009, Respondent 2 stressed that it considered of value the mutual promise by Claimant and Respondent 1 to protect the CCC Patents70.
169.
Respondent 2 subsequently dropped its argument that Claimant was in breach of any obligation to protect its CCC Patents. It rather argues that Respondent 1 breached such obligation which either automatically resulted in a termination of the exclusive license granted to Respondent 1 (because a condition subsequent materialized) or entitled Respondent 2 to terminate the Side Agreement.
170.
The Tribunal has weighed all arguments and factual allegations made by the parties and finds that Respondent 2 was not entitled to terminate the Side Agreement.

3.1 The Content of the Side agreement

171.
TheSide Agreement is a contract among three parties. As a consequence, by way of entering into this contract, Respondent 2 not only assumed obligations vis-à-vis Respondent 1. It also assumed obligations vis-à-vis Claimant. In fact, it is the Tribunal’s view that Respondent 2’s main interest when signing the Side Agreement was to clarify its relationship to Claimant, in particular with re spect to the Berkenhoff Patents on the one side and the CCC Patents on the other side.
172.
In its complaint of 12 October 200771 Respondent 2 stated that it "entered into the Side Agreement as part of an effort to achieve a settlement of patent dis putes with Berkenhoff’.
173.
Already in its letter of 14 April 200472 Dr. Tomalin of Respondent 2 had asked Mr. Malhotra of Respondent 1 for an executed side agreement. This side agreement was to include in particular the pledge not to challenge the other side’s patents.
174.
ln line with this history, the Side Agreement expressly provides for Claimant’s obligation to withdraw its opposition against the EP 1 009 574, one of the CCC Patents. In that respect, Dr. Brückmann, in the Hearing73, confirmed that with drawing the opposition was Claimant’s consideration for entering into the Side Agreement. Claimant subsequently fulfilled its obligation by withdrawing the opposition filed.
175.
Claimant entered into the Side Agreement, and committed to the withdrawal of its opposition, because it wanted to have a certain security from Respondent 2 that Respondent 1 had the exclusive license rights to the CCC Patents. This was confirmed by Dr. Brückmann during the Hearing74.
176.
The Side Agreement consequently provides with respect to the relationship between Claimant and Respondent 2 that

• on the one side Respondent 2 "approved" of the License Agreement and thus, inter alia, confirmed that it had granted to Respondent 1 the exclusive license to its CCC Patents and that Respondent 1 was entitled to sublicense it to Claimant, and Respondent 2 in addition, and expressly, undertook "that no further license has been or will be granted to third parties"; and

• on the other side Claimant, in consideration for Respondent 2’s undertakings, withdraws its opposition against the EP 1 009 574.

177.
The Tribunal is convinced that Dr. Tomalin understood the relevance and meaning of those undertakings. First, he testified in the Hearing that he was most likely advised by counsel when he executed the Side Agreement75. Given the importance of the CCC Patents to him as inventor, the Tribunal finds this more than likely. Second, even if Dr. Tomalin had not been advised by counsel, the wording of the Side Agreement is plain and clear. There cannot be any reasonable doubt that Respondent 2 understood that by signing the Side Agreement it expressly confirmed to Claimant that it "approved' of Res pondent 1’s entering into the License Agreement, that Respondent 1 had the exclusive rights to the CCC Patents to do so, and that Respondent 2 would re frain from granting any other licenses to third parties.

3.2. The Validity of the Side agreement

178.
The Tribunal sees no convincing reason why the Side Agreement, with the content summarized above under 3.1, might not have been validly entered into by the Parties. The validity of the Side Agreement consequently depends on whether or not the termination by Respondent 2 was valid. In that respect, having considered all the arguments made by the Parties, the Tribunal holds that Respondent 2 did not validly terminate the Side Agreement.
179.
As pointed out repeatedly, Respondent 2 originally based its right to terminate the Side Agreement on a breach of the obligation to protect its CCC Patents both by Respondent 1 and Claimant. It subsequently gave up the argument with respect to Claimant after the state courts in Ohio had found that Respondent 2 was bound to arbitrate because it relied as third party beneficiary on obligations of Claimant deriving from the License Agreement.
180.
As Respondent 2 dropped its argument in that respect, the Tribunal only has to decide whether Respondent 2 was entitled to terminate the Side Agreement because of the alleged breach of Respondent 1 to protect the CCC Patents.
181.
In view of fact that the Side Agreement is an agreement among three par ties, there are already doubts whether Respondent 2 would be entitled to ter minate also its contractual relationship with Claimant absent any breach by Claimant itself. The Tribunal considered Respondent 2’s argument that the entire agreement was subject to a "condition subsequent" (Section 158 (II) of the Civil Code), namely Respondent 1’s compliance with its obligations. The Tribunal doubts that such interpretation is compelling. However, the Tribunal does not need to finally decide this issue because Respondent 2 failed to con vince the Tribunal that Respondent 1 breached an obligation to protect the CCC Patents.
182.
First, the Tribunal is not convinced that Respondent 1 undertook to protect the CCC Patents in case of an infringement by a third party. The Side Agreement does not provide for such obligation. As Respondent 2 dropped its claim relying on any rights deriving from the License Agreement, there can also not be any right of Respondent 2 resulting from any of the provisions of the License Agreement. The only other remaining agreement is the Revised Patent License Agreement. However, also this agreement does not provide for an obli gation of Respondent 1 to protect Respondent 2’s CCC Patents. Section 13. 2 of the Revised Patent License Agreement provides that it comprises the "en tire understanding between the parties, and supersedes all other agreements, express or implied between the parties concerning" the CCC Patents. In view of this clause there are already principle doubts as to whether Respondents might have orally agreed on an obligation of Respondent 1 to protect Respon dent 2’s patents. However, Respondent 2 also failed to explain when, how, and under what conditions it might have entered into such oral agreement. In the Hearing, Dr. Tomalin was unable to specify when such oral agreement was allegedly reached. He rather stated that he "had precedence that [Mr. Malhotra] had" protected the CCC Patents in the past76. This does not prove an agreement, but at most might show a certain unilateral expectation by Respondent 2. However, in the course of the Hearing77 it also turned out that Dr. Tomalin’s experiences with Mr. Malhotra to which experiences he was referring were relating to events after he had entered into the Revised Patent License Agreement. This also shows that there was, at the time of the execution of the Revised Patent License Agreement, no basis for an oral agreement pursuant to which Respondent 1 might have been obligated to protect the CCC Patents. This conclusion is further supported by Section 13.3 of the Re vised Patent License Agreement pursuant to which any "amendment of the Revised Patent Licence Agreement can only be made in writing."
183.
Second, and more important, Respondent 2 was unable to convince the Tribunal that there was a breach of Respondent 1 which made Respondent 2 terminate the Side Agreement or "downgrade" the exclusive license granted to Respondent 1.
184.
In its letter of 26 September 200678 Respondent 2 informed Respondent 1 that it must "insist on a change in the licensing agreement between our respective organizations regarding U.S. Patent 5,945,010". While Respondent 2 "appreciate[d] the fact GTN worked hard in trying to reach a compromise with Berkenhoff GmbH that would facilitate the resolution of the pending infringement issue while honoring the existing agreements with Berkenhoff, GTN, and CCC", Respondent 2 stated that it would be "evident that GTN’s exclusive po sition became issue preventing any such compromise from being achieved with Berkenhoff". Therefore Respondent 2 insisted that "GTN’s license be changed from one of exclusive rights to one of non-exclusive rights". Respon dent 2 "fully appreciate[d] the fact that GTN must be compensated for its prior investment in developing the market for gamma wires". Finally, it expressed its hope to reach "a timely agreement on this matter which will in turn facilitate the resolution of the Thermocompact infringement issue".
185.
There are already doubts whether this letter could be interpreted as Respondent 2’s declaration to terminate the Side Agreement. Rather, Respondent 2 expressed its hope to reach a timely agreement. A reasonable interpretation of this letter rather indicates that Respondent 2 sought for an agreement by which the parties would jointly solve the issue.
186.
In any event, in this letter Respondent 2 does not blame Respondent 1 for a breach of its obligation to protect the CCC Patents. On the contrary, Respondent 2 expressed its appreciation for Respondent 1’s hard work in trying to solve the infringement issue. It expressly stated that Respondent 1 must be compensated for its investments. If anything can be taken from this letter, then it is Respondent 2’s appreciation for Respondent 1’s efforts in getting the in fringement issues resolved. Also in its letters of 5 August, 7 August, and 13 August 200679, Respondent 2 was more concerned about how a solution of the fringement issue would "protect [Respondent 1]'s interests" under the Revised Patent License Agreement; there is no indication at all that Respon dent 2 blamed Respondent for not having solved the infringement issue with Thermocompact.
187.
This is also in line with the witness statements made during the Hearing. As regards the infringement issue concerning Electrodes, Dr. Tomalin stated that Mr. Malhotra stepped in and told them to stop the infringement80 As regards the Thermocompact infringement issue, Mr. Malhotra confirmed81 that he did what he could do. He confirmed that he was willing to agree to the discussed solution which was also agreeable to Dr. Tomalin. The solution finally failed because Claimant did not consent. However, this is nothing Respondent 1 could be blamed for, and nothing Claimant did Respondent 1 blame for.
188.
In conclusion, the Tribunal sees no basis on which Respondent 2 could have been entitled to terminate the Side Agreement. Hence, any termination declared by Respondent 2 was void. The Side Agreement did also not lose its validity automatically, because the (alleged) condition subsequent (if any) did not occur.

3.3 Respondent 2 remains obligated not to grant licenses to third parties

189.
Absent any valid termination of the Side Agreement, Respondent 2 remains obligated not to grant a third party any license with respect to the CCC Patents.

3.4. Respondent 2 wrongfully terminated the Side Agreement and is liable for damages

190.
Respondent 2’s termination of the Side Agreement was wrongful. By way of this wrongful termination Respondent breached its obligation vis-à-vis Clai mant and is liable for damages.
191.
Claimant has also a legitimate interest in obtaining declaratory relief by having confirmed Respondent 2’s liability due to its breach of contract. While Claimant had not raised such claim from the very beginning of the arbitration, it was admissible to expand its prayers for relief in that respect pursuant to Sec tions 1046 (II) Procedural Code. The issue of whether or not Respondent 2 is liable for damages is closely related to the issue of whether or not Respondent 2's termination was justified. The Tribunal considers it expedient and reasona ble to allow Claimant to have this issue decided in the pending arbitration. It would be rather inefficient, and also not in Respondent 2’s interest, if another arbitration would have had to be started from scratch just to determine an is sue (damage obligation of Respondent 2) which is a direct consequence of another issue (wrongful termination by Respondent 2) that was briefed and heard in this arbitration extensively.
192.
In its letter of 18 September 200682, Respondent 2 informed Claimant that it would enter into discussions with Thermocompact which discussions "may include the production and supply of gamma wires by Thermocompact". Respondent 2, thus, declared that it would no longer honor its obligations under the Side Agreement. In addition, in the letter of 6 August 200783, Respondent 2’s counsel stated that Respondent 2 "revoked both [Respondent 1’s] and [Claimant’s] license" and that Respondent 2 had "the right to license products covered by the CCC Patents to Thermocompact’. Finally, it stated that it was "not willing to revoke the license granted to Thermocompact". It thus admitted that it had granted such license to Thermocompact.
193.
In conclusion, the Tribunal finds that Respondent 2 is obligated to compensate Claimant for all damages incurred as a consequence of Respondent 2’s wrongful termination of the Side Agreement and its breach of its obligation not to grant any license to the CCC Patents to third parties. In order to allow Clai mant to determine its damages, Respondent 2 must render the requested account to Claimant according to Sections 259 and 242 of the German Civil Code.

F. Conclusion

194.
The Tribunal has jurisdiction to decide on all claims submitted.
195.
All prayers for relief of Claimant are founded.
196.
AII prayers for relief or Respondent 1 are unfounded.

G. Parties' legal costs and expenses

1. Claimants' Statement on Fees and Costs

197.
By submission of 15 March 2011, Claimant stated that its costs and fees include

• the amount of EUR 346,042.67 (Taylor Wessing)

• the amount of USD 50,551.90 (Jenner & Block)

• the amount of EUR 227,697.49 (paid to the DIS and the Tribunal)

• the amount of EUR 11,417.35 (Disbursements).

198.
In total, Claimant's costs amount to EUR 585,157.51 and USD 50,551.90.

2. Respondent 1’s Statements on Fees and Costs

199.
By submission of 15 March 2011, Respondent 1 stated that its costs and fees include

• the amount of EUR 380,436.50 (for legal counsels/attorneys)

• the amount of EUR 4,000.00 (paid to Tribunal/DIS)

• the amount of EUR 20,527.52 (Disbursements).

200.
By its submission of 18 April 2011, Respondent 1 revised its statement on legal fees and submitted the following:

• the amount of USD 295,467.87 (Squire, Sanders & Dempsey LLP)

• the amount of EUR 126,709.16 (Lorenz Seidler Gossel)

201.
According to this revised submission, Respondent 1's fees and costs amount in total to EUR 151,236.68 and USD 295,467.87.

3. Respondent 2’s Statement on Fees and Costs

202.
By submission of 15 March 2011, Respondent 2 stated that its costs and fees include

• the amount of USD 206,719.84 (Jones Day)

• the amount of USD 285104.34 (Buckley King)

• the amount of USD 1,925.21 (Disbursements)

203.
In total, Respondent 2’s costs amount to USD 493,749.39.

H. Costs and Fees of Arbitration

1. Advance Payment by the Parties

204.
The Parties paid the following advances:
205.
Claimant made the following advance payments:

• EUR 14,994 on the DIS administration fee as well as an additional amount of

• EUR 20,706 as payment on the increased DIS administration fee

• EUR 23,340 to the DIS as advance on the arbitrators’ fees

• EUR 24,273.09 in response to Procedural Order No.1

• EUR 73,042.20 in response to Procedural Order No. 6

• EUR 73,042.20 in response to Procedural Order No. 9 and 10.

• EUR 4,000 as advance on the court reporter fees.

206.
Respondent 1 made an advance payment of

• EUR 47,613.09 in response to Procedural Order No.1, and

• EUR 3,990 as advance on the court reporter fees.

207.
Respondent 2 made no advance payments.

2. Actual Fees and Costs of the Arbitration

208.
The DIS administration fee amounts to EUR 30,000 (excluding VAT). 209. The Arbitrators' fees amount to EUR 199,782 (excluding VAT).
210.
The other court reporter fees and costs amount to GBP 4,2517.10 (equaling on the day of payment EUR 4,871.40).
211.
The other costs of the arbitration proceedings amount to

• Costs of hearing and courier services incurred by Chairman of EUR 1,378.43 (including VAT)

• Travel costs and expenses and costs concerning telephone or courier services incurred by Dr. Kraft of EUR 2,374.15 (including VAT)

212.
The Tribunal holds advance payments in total of EUR 249,300.58. Deducting the payment made to the court reporter of EUR 4,871.40, the total expenses incurred by the Tribunal of EUR 3,752.58 and the Tribunal’s arbitrator fees of EUR 199,782 plus VAT of EUR 18,979.29 (19 % of Claimant’s share of 50 % of 199,782), the remaining balance amounts to EUR 21,915.31. This amount will be returned by the Tribunal to Claimant.

I. ALLOCATION OF THE ARBITRATION COSTS

213.
Since all of Claimant’s claims are founded, and all of Respondent 1’s claims are unfounded, Claimant is entitled to reimbursement of its costs and fees from Respondents in accordance with Section 35.2 of the DIS Rules.
214.
In fixing the amount to be reimbursed, the Tribunal took all costs and fees submitted by Claimant into account. It, in particular, also took into account the invoices of Jenner & Block of 16 March 2010 and 17 March 2010. Respon dent had objected to those invoices by its submission of 31 March 2011 and questioned whether those invoices related to this arbitration. In response, by its submission of 18 April 2011, Claimant explained that those invoices related to the arbitration. Considering that this arbitration also involved issues of US law, because Respondent 2 had raised them, and considering that the amount of the invoices for the US advice is about USD 50,000, the Tribunal considers those costs and fees to be part of the reasonable costs and fees associated with this arbitration.
215.
In conclusion, Respondents must pay to Claimant the amounts of EUR 544,262.91 and USD 50,551.90. These amounts include Claimant’s cost concerning Taylor Wessing of EUR 346,042.67, its payment on the DIS adminis tration fee of EUR 30,000, its disbursements of EUR 11,417.35, its advance payments on the arbitrators’ fees of EUR 197,697.49 less the amount returned by the Tribunal of EUR 21,915.31 and the VAT of 18,979.29, as well as its costs concerning Jenner & Block of USD 50,551.90.
216.
For those reasons, the Arbitral Tribunal renders the following

FINAL AWARD

I. With regard to Respondent 1:

1.1 lt is declared that a valid licence agreement dated 16 November 2004 exists between Claimant and Respondent 1 pursuant to which Claimant shall be enti tied use the patents US 5,945,010 and/or CA 08886483 (Appl. No.) and/or EP 1009574 exclusively and/or gratuitously and/or worldwide to manufacture and/or use and/or offer and/or sell all gamma phase products.

1.2 Its is declared that a valid side agreement to the license agreement dated 16 November 2004, dated 13, 14 and 21 December 2004 exists between the parties.

1.3 It is declared that the termination of the licence agreement dated 16 November 2004 and/or the side agreement dated 13, 14 and 21 December 2004 by the Respondent 1 as declared on 15 October 2007 is invalid.

2. It is declared that Respondent 1 does not have a claim for damages based on an infringement of the licence agreement dated 16 November 2004 by the Claimant,

2.1 It is declared that the Claimant Is not obligated to purchase Respondent 1’s outputs of economy gamma phase EDM wire.

2.2 It is declared that the Claimant is not obligated to supply Respondent 1 its requirements of private label wire.

2.3 It is declared that the Claimant is not obligated to enter into an arrangement to give Respondent 1 the opportunity to provide management and/or storage and/or shipment and/or other logistical services.

3. Its is declared that Respondent 1 is obligated to compensate the Claimant for all damages that the Claimant has incurred or will in the future incur due to the wrongful termination of the licence agreement dated 16 November 2004 by Respondent 1.

4. It is declared that Respondent 1 has no claim for damages on the basis of an infringement of an oral agreement concerning the provision of storage and/or shipment and/or distribution services to the Claimant.

5. It is declared that Respondent 1 does not have a claim for damages on the basis of misrepresentations of the Claimant about its willingness to acquire, in whole or part, equity and/or assets of Respondent 1 and/or its affiliate Kern Special Tool Company Inc. and/or its willingness to enter into a joint venture and/or any other form of partnership with Respondent 1.

6. It is declared that Respondent 1 does not have a claim for damages based on any interference of the Claimant with Respondent's 1 business relations with customers and/or potential customers and/or suppliers.

II. With regard to Respondent 2:

1.It is declared that the contract entered into by the Parties on 14 December (Side Agreement) remains valid and has not been validly terminated by Respondent 2.

2. It is declared that Respondent 2 is obligated not to grant licences to use the patents US 5,945,010 and/or CA 08,886,483 (Appl. No) and/or EP 1,009,578 to third parties.

3. It is declared that Respondent 2 is obligated to compensate Claimant for all damages incurred by Claimant up until now and in the future as the result of Respondent 2’s wrongful termination of the Side Agreement dated 21 Decem ber 2004 and its breach of its obligation to not grant licenses to third parties.

4. Respondent 2 is sentenced to provide Claimant with information to the extent and duration of its actions pursuant to claim 3 above by means of a complete and orderly directory, especially containing specifications to the revenue, ac quisition profits resulting from actions pursuant to claim 3 above.

III. Respondent 1's claims and counterclaims are dismissed.

IV. Respondents are jointly and severally liable to pay to Claimant the amounts of EUR 544,262.91 and USD 50,551.90.

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