As part of the arrangement between Mobileye and the Hebrew University of Jerusalem, Yissum Technology Transfer Company of the Hebrew University of Jerusalem received 0.5% of Mobileye's shares, some of which were sold for $9.6 million a decade ago, leaving the university with a 0.3% stake. It now appears that the university is dissatisfied with its share under the arrangement, and is seeking a dialogue concerning future royalties to which it says it is entitled. In its response to the university's demands, Mobileye says that neither it nor its founder, Prof. Amnon Shashua, owe the university anything. Hebrew University, where Shashua was a lecturer at the Rachel and Selim Benin School of Computer Science and Engineering, says that he developed some of Mobileye's technology in its laboratories.
Sources involved in the dispute say that the university is seeking a proportion of Shashua's $1 billion gross proceeds from the sale of Mobileye to Intel.
As part of reopening the royalties dispute, Yissum sent Mobileye a letter demanding information about past and future royalties to which Shashua and anyone else working simultaneously at Mobileye and Hebrew University was entitled. In response to the letter, Shashua resigned his position as a lecturer at the university.
Sources inform "Globes" that Yissum has hired Advocates Pinhas Rubin and Kfir Yadgar from the Gornitzky & Co. law firm to conduct the dispute for it. Mobileye is represented by Advocate Liz Cohen Yerushalmi, its legal counsel.
A warning letter
A source familiar with the dispute says that the letter sent by Yissum to Mobileye contained no financial demand, but asserted an entitlement to proceeds from the Mobileye deal, without mentioning any amounts. The source said, however, that the letter hinted at future demands.
"It's clear which way the wind is blowing," the source says. Mobileye has also apparently gotten the message, and is making its position clear already at this early stage. In response to the demand for information, Mobileye, in a letter signed by Cohen Yerushalmi, sent a letter firmly denying that Yissum was entitled to any share in royalties on the sale of Mobileye to Intel.
In the letter, which "Globes" has obtained, Mobileye warns the university about the company's future relations with institutions of higher learning in Israel. "Let it be clear that Mobileye never used Hebrew University's intellectual property, and I believe that the university's conduct and that of Yissum will cause great damage to Mobileye's connection with universities in Israel," the company's letter to university states.
Cohen Yerusalmi begins her letter by stating that the question of the intellectual property rights of university staff members working at Mobileye has already been settled, and that the university cannot now reopen the subject.
"As you know, Mobileye and Hebrew University settled the question of intellectual property created, insofar as it was created by university staff members, in the framework of previous settlements, including a letter of confirmation received from the university dated March 2," Cohen Yerusalmi writes. "In addition, the status of Prof. Shashua and the intellectual property rights involving his activity were also settled."
An examination of entitlement to future royalties
Concerning rights to future royalties, Mobileye's letter states, "Since the letter of confirmation made it clear that the intellectual property rights created between the founding of Mobileye and the signing of the letter of confirmation were the sole property of Mobileye, it follows that according to letter of confirmation, the main purpose before us now is arranging the future rights created, insofar as they are created, following the signing of the confirmation letter."
Mobile asserts, "The letter of confirmation explicitly states that the assessment to be made (concerning entitlement to future royalties, E. L.-W.) will relate solely to existing work agreements, not past agreements."
Such agreements exist for only three university staff members: "Other than Prof. Shashua, the only Hebrew University staff member currently working at Mobileye is Prof. Shai Shalev-Shwartz. Hebrew University Prof. Yair Weiss also works at Mobileye in a more limited capacity, but we see no reason not to terminate his employment at Mobileye, should the university and/or Yissum regard this as necessary."
The biggest deal in Israel
Jerusalem-based Mobileye, founded by Shashua and Ziv Aviram, has developed a technological system that warns of hazards in driving. The system includes chips, software, and cameras. A deal for the acquisition of Mobile by Intel for $15.3 billion, the largest acquisition in Israel to date, was completed last week.
In recent years, the company's main growth engine, and the primary reason for its acquisition by Intel, has been its systems for autonomous vehicles. Shashua, Mobileye's CTO until the Intel acquisition, and Aviram, its CEO, owned 7.5% and 7% of Mobileye's shares, respectively. Shashua's share of the deal is therefore about $1 billion.
Hebrew University: We hope that the proceeding with Prof. Shashua will end quickly and successfully
Hebrew University said in response, "The Hebrew University is in a proceeding against Prof. Amnon Shashua, and we hope it will end quickly and successfully. As a matter of principle, Hebrew University does not disclose particulars about its staff members, and will not do so in this case."
Shashua and Mobileye said in response, "There is a proceeding that will end soon - we hope successfully."
Rubin declined to respond to the report.
Published by Globes [online], Israel Business News - www.globes-online.com - on August 17, 2017
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