Adobe 2010 Annual Report Download - page 52

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ITEM 3. LEGAL PROCEEDINGS
Between September 23, 2009 and September 25, 2009, three putative class action lawsuits were filed in the Fourth
Judicial District Court for Utah County, Provo Department, State of Utah, seeking to enjoin Adobe’ s acquisition of Omniture,
Inc. and to recover damages in the event the transaction were to close. The cases were captioned Miner v. Omniture, Inc., et.
al. (“Miner”), Barrell v. Omniture, Inc. et. al., (“Barrell”), and Lodhia v. Omniture, Inc. et al., (“Lodhia”). At a hearing on
October 20, 2009, the court consolidated the Miner, Barrell, and Lodhia cases into a single case under the Lodhia caption and
denied the plaintiffs’ motion to preliminarily enjoin the closing of the transaction. On December 30, 2009, the plaintiffs
served the defendants with a consolidated amended complaint for damages arising out of the closing of the transaction. In the
consolidated amended complaint, plaintiffs alleged that the members of Omniture’ s board of directors breached their
fiduciary duties to Omniture’ s stockholders by failing to seek the highest possible price for Omniture and that both Adobe
and Omniture induced or aided and abetted in the alleged breach. The plaintiffs also alleged that the Schedule 14D-9
Solicitation/Recommendation Statement filed by Omniture on September 24, 2009 in connection with the transaction
contained inadequate disclosures and was materially misleading. Plaintiffs sought unspecified damages on behalf of the
former public stockholders of Omniture. On March 8, 2010, Adobe and the other defendants moved to dismiss the complaint
for failure to state a claim. The court heard oral argument on the motion in November 2010 and the court granted the
defendants’ motion to dismiss the complaint with prejudice.
In October 2009, Eolas Technologies Incorporated filed a complaint against us and 22 other companies for patent
infringement in the United States District Court for the Eastern District of Texas. The complaint alleges, among other things,
that a number of our Web pages and products infringe two patents owned by plaintiff purporting to cover “Distributed
Hypermedia Method for Automatically Invoking External Application Providing Interaction and Display of Embedded
Objects within a Hypermedia Document” (U.S. Patent No. 5,838,906) and “Distributed Hypermedia Method and System for
Automatically Invoking External Application Providing Interaction and Display of Embedded Objects within a Hypermedia
Document” (U.S. Patent No. 7,599,985) and seeks injunctive relief, monetary damages, costs and attorneys fees. We dispute
these claims and intend to vigorously defend ourselves in this matter. As of December 3, 2010, no amounts have been
accrued as a loss is not probable or estimable.
In connection with our anti-piracy efforts, conducted both internally and through organizations such as the Business
Software Alliance, from time to time we undertake litigation against alleged copyright infringers. Such lawsuits may lead to
counter-claims alleging improper use of litigation or violation of other local laws. We believe we have valid defenses with
respect to such counter-claims; however, it is possible that our consolidated financial position, cash flows or results of
operations could be affected in any particular period by the resolution of one or more of these counter-claims.
Adobe is subject to legal proceedings, claims and investigations in the ordinary course of business, including claims of
alleged infringement of third-party patents and other intellectual property rights, indemnification claims, commercial,
employment and other matters. Adobe makes a provision for a liability when it is both probable that a liability has been
incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and
adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events
pertaining to a particular case. All legal costs associated with litigation are expensed as incurred. Litigation is inherently
unpredictable. However, we believe that we have valid defenses with respect to the legal matters pending against Adobe. It is
possible, nevertheless, that our consolidated financial position, cash flows or results of operations could be negatively
affected by an unfavorable resolution of one or more of such proceedings, claims or investigations.
ITEM 4. (REMOVED AND RESERVED)