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Item 3. Legal Proceedings

2023-02-22 compared with 2022-02-22 · 35 added, 30 removed, 5 unchanged (93% of the section changed)

Legal Proceedings

In June and July 2018, we filed three lawsuits for patent infringement against Huawei Technologies Co., Ltd., a Chinese entity, Huawei Technologies Düsseldorf GmbH, a German entity, and Wattkraft Solar GmbH, a German distributor for Huawei.

The lawsuits, filed in the Mannheim District Court in Germany, assert unauthorized use of patented technology, and are intended to protect SolarEdge’s significant investment in its innovative DC optimized inverter technology.

Seeking monetary damages, an injunction, and recall of infringing Huawei inverters and optimizers from the German market, the lawsuit is intended to prevent the defendants from selling any multi-level inverters and optimizers infringing upon SolarEdge’s PV inverter and optimizer technology protected in the asserted patents in Germany.

In November 2021, we withdrew one of the infringement claims after the asserted patent was revoked.

In the other two lawsuits, hearings were held and in one of the proceedings the claim was dismissed and we have appealed to a higher court.

In the parallel nullity proceedings regarding this patent, a hearing has been held, but no decision has been rendered.

The third lawsuit is pending a court appointed expert opinion.

In addition, in January 2021, we extended this complaint to include also the second generation Huawei Smart PV Optimizers.

We intend to continue to vigorously defend our patented technology.

In May 2019, we were served with three lawsuits by Huawei Technologies Co., Ltd., a Chinese entity (“Huawei”), against our two Chinese subsidiaries and our equipment manufacturer in China.

The lawsuits, filed in the Guangzhou intellectual property court, alleged infringement of three patents and asked for an injunction of manufacture, use, sale and offer for sale, and damage awards.

In August 2020 a first-instance judgment was issued ordering the three defendants to collectively pay damages in the amount of approximately $1.6 million (including court fees) with respect of one of the patents and our appeal to the Supreme People’s Court in that case was denied in December of 2021, rendering a payment due by us to Huawei in the amount of $1.6 million.

The judgement is not enforceable until the end of February 2022.

In addition, in January 2021, Huawei filed a motion to increase its claimed monetary damages to approximately $7.9 million with respect to the second lawsuit.

In February 2021, a preliminary injunction was rendered by the Guangzhou intellectual property court with respect to a second lawsuit and applying to seven inverter models.

In line with the court’s mandate, we took immediate action to make software changes to meet the court order and also appealed the decision with the Supreme People's Court which is still pending.

Additionally, in October 2021, a first-instance judgment was issued with respect of the third lawsuit, ordering the three defendants to collectively pay damages in the amount of approximately $1.6 million (including court fees) with respect to one of the patents.

We filed an appeal with the Supreme People's Court which remains pending.

We believe that we have meritorious defenses to the claims asserted by Huawei.

In September, 2018, our German subsidiary, SolarEdge Technologies GmbH, received a complaint filed by a competitor, SMA Solar Technology AG (“SMA”).

The complaint, filed in the District Court Düsseldorf, Germany, alleges that SolarEdge's 12.5kW - 27.6kW inverters infringe two of plaintiff’s patents.

In its complaints, SMA requests, inter alia, an injunction, rendering account about past sales, a recall of products and a determination for a claim for damages for sales in Germany.

SMA asserted a value in dispute of 5.5 million Euros (approximately $6.2 million) for both patents.

In September, 2018, our German subsidiary,

SolarEdge Technologies GmbH, received a complaint filed by a competitor, SMA Solar Technology AG (“SMA”).

The complaint, filed

in the District Court Düsseldorf, Germany, alleges that SolarEdge's 12.5kW - 27.6kW inverters infringed on two of the plaintiff’s

In its complaints, SMA requests, inter alia , an injunction, rendering account about past

sales, a recall of products and a determination for a claim for damages for sales in Germany.

SMA asserted a value in dispute of 5.5 million

Euros (approximately $5.9 million) for both patents.

We challenged the validity of both patents.

In December 2019 the District Court of Düsseldorf found one of the two patents to be infringed and we appealed this decision to the Appeals Court Düsseldorf.

In December 2019 the District Court of

Düsseldorf found one of the two patents to be infringed upon and we appealed this decision to the Appeals Court Düsseldorf.

In the parallel nullity proceedings regarding this patent, in October 2020, the German Patent Court rendered the SMA patent invalid;

this invalidity has been appealed by SMA.

Due to the invalidity proceedings, the infringement proceedings regarding this patent have been stayed.

With respect to the other patent, in November 2019 the first instance court stayed the infringement proceedings since it considered it to be highly likely that the patent would also be invalid.

We believe that we have meritorious defenses to the claims asserted and intend to vigorously defend against this lawsuit.

In addition, in the normal course of business, we may from time to time be named as a party to various legal claims, actions and complaints (including as a result of initiating such legal claims, actions or complaints on behalf of the Company).

It is impossible to predict with certainty whether any resulting liability would have a material adverse effect on our financial position, results of operations or cash flows.

invalidity was appealed by SMA and in January 2023, the German Supreme Court upheld the finding of invalidity.

With respect to the second

patent, in November 2019 the first instance court stayed the infringement proceedings since it considered it to be highly likely that

the patent would also be invalid.

In August 2021, the German Patent Court rendered this patent invalid as well, and this invalidity has

been appealed by SMA.

We believe that we have meritorious defenses to these claims and intend to vigorously defend against this lawsuit.

On July 28, 2022, we were served with a complaint

by Ampt LLC filed with the International Trade Commission (the “Commission”) pursuant to Section 337 of the Tariff Act of

1930, as amended in the District Court for the District of Delaware alleging patent infringement against the Company and its subsidiary

SolarEdge Technologies Ltd.

On October 24, 2022, the complaint filed in the District Court of Delaware was administratively stayed until

the Commission's action is resolved.

We believe that we have meritorious defenses to the complaints and intend to vigorously defend against

On November 3, 2022, we received notice

that a class action lawsuit was filed in the U.S District Court of the Southern District of New York against us, our subsidiary SolarEdge

Technologies Ltd., our CEO and our CFO, by a purported stockholder of the Company, alleging violations of the Federal Securities Act in

connection with complaints filed against us by Ampt LLC, as described in the preceding paragraph.

On February 14, 2023, the lawsuit was

voluntarily withdrawn by the plaintiffs and subsequently dismissed by the court.

In addition, in the normal course of business,

we may from time to time be named as a party to various legal claims, actions and complaints (including as a result of initiating such

legal claims, actions or complaints on behalf of the Company).

It is impossible to predict with certainty whether any resulting liability

would have a material adverse effect on our financial position, results of operations or cash flows.

Mine Safety Disclosures.

1 unchanged sentence

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What changed 10-K

Item 3. Legal Proceedings