Blackberry 2003 Annual Report Download - page 46

Download and view the complete annual report

Please find page 46 of the 2003 Blackberry annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 56

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56

44
Research฀In฀Motion฀Limited฀฀|฀฀Incorporated฀Under฀the฀Laws฀of฀Ontario฀(United฀States฀dollars,฀in฀thousands฀except฀per฀share฀data฀or฀as฀otherwise฀indicated)
45
For฀the฀years฀ended฀March฀1,฀2003,฀March฀2,฀2002฀and฀February฀28,฀2001
Based฀upon฀the฀Court’s฀Order฀dated฀March฀11,฀2003฀(the฀“Order”),฀i)฀the฀jury’s฀compensatory฀damages฀
award฀shall฀be฀increased฀by฀the฀amount฀equal฀to฀the฀infringing฀revenues฀for฀the฀period฀November฀1,฀2002฀
to฀November฀30,฀2002฀multiplied฀by฀the฀royalty฀rate;฀ii)฀supplemental฀judgment฀is฀entered฀for฀NTP฀for฀
compensatory฀damages฀equal฀to฀the฀infringing฀revenues฀for฀the฀period฀December฀1,฀2002฀to฀
February฀28,฀2003฀multiplied฀by฀the฀royalty฀rate.฀Whether฀enhancement฀of฀said฀supplemental฀judgment฀
is฀warranted฀will฀be฀subsequently฀determined฀(see฀later฀in฀note฀14฀in฀reference฀to฀the฀May฀23,฀2003฀
rulings);฀iii)฀on฀or฀before฀March฀30,฀2003,฀the฀Company฀shall฀provide฀the฀Accounting,฀duly฀veried฀and฀
sworn,฀to฀NTP฀and฀the฀Court;฀iv)฀commencing฀with฀the฀rst฀quarter฀of฀scal฀2004,฀the฀Company฀shall฀
provide฀an฀Ongoing฀Quarterly฀Accounting฀to฀NTP฀and฀the฀Court฀of฀all฀infringing฀revenues;฀v)฀to฀account฀
for฀any฀ongoing฀postjudgment฀infringement฀activity,฀the฀Company฀shall฀establish฀an฀interest-bearing฀
account฀with฀an฀FDIC-insured฀bank฀located฀in฀the฀Eastern฀District฀of฀Virginia฀and฀make฀deposits฀therein฀
on฀a฀quarterly฀basis฀(“Quarterly฀Deposits”),฀in฀amounts฀equal฀to฀the฀quarterly฀infringing฀revenues฀
multiplied฀by฀the฀royalty฀rate.฀Whether฀enhancement฀of฀the฀Quarterly฀Deposits฀is฀warranted฀will฀be฀
determined฀(see฀later฀in฀note฀14฀in฀reference฀to฀the฀May฀23,฀2003฀rulings);฀vi)฀the฀Quarterly฀Deposits฀shall฀
continue฀until฀such฀time฀as฀the฀judgment฀of฀this฀Court฀is฀afrmed,฀reversed,฀or฀remanded,฀at฀which฀
time฀the฀parties฀shall฀move฀the฀Court฀for฀a฀hearing฀on฀the฀disposition฀of฀the฀Quarterly฀Deposits;฀vii)฀the฀
Company฀shall฀pay฀prejudgment฀interest฀in฀the฀compensatory฀(non-enhanced)฀portion฀of฀damages฀
awarded฀by฀the฀jury.฀Such฀interest฀shall฀accrue฀from฀the฀date฀of฀the฀Company’s฀rst฀infringing฀activity฀and฀
be฀compounded฀quarterly.฀The฀parties฀shall฀jointly฀submit฀a฀calculation฀of฀the฀interest฀due฀hereunder฀no฀
later฀than฀March฀30,฀2003;฀viii)฀the฀Company฀shall฀pay฀postjudgment฀interest฀on฀the฀full฀amount฀of฀the฀
monetary฀award฀entered฀by฀the฀Court,฀as฀specied฀in฀the฀Court’s฀entry฀of฀nal฀judgment.฀
The฀Court฀did฀not฀rule฀on฀other฀post-trial฀motions฀and฀ordered฀the฀parties฀to฀mediation฀before฀a฀
U.S.฀Magistrate฀Judge.฀No฀denitive฀time฀frame฀was฀set฀for฀the฀mediation.฀As฀a฀result,฀further฀rulings฀and฀
potential฀appeals฀are฀expected฀to฀be฀postponed฀pending฀the฀outcome฀of฀the฀mediation฀process.
On฀May฀23,฀2003฀the฀Court฀ruled฀on฀the฀issues฀of฀enhanced฀compensatory฀damages,฀plaintiff’s฀attorney฀
fees฀and฀certain฀other฀matters฀as฀follows:
Enhanced฀Compensatory฀Damages
The฀Court฀ordered฀that฀NTP฀be฀awarded฀compensatory฀damages฀such฀that฀all฀infringing฀revenues฀
subsequent฀to฀the฀date฀of฀the฀jury฀verdict฀are฀enhanced฀by฀a฀factor฀of฀0.5฀or฀50%.฀This฀increases฀the฀
royalty฀rate฀to฀8.55%฀from฀5.7%.฀Infringing฀revenues฀now฀include฀all฀BlackBerry฀handheld,฀service฀
and฀software฀revenues฀in฀the฀United฀States.฀The฀Company฀recorded฀an฀additional฀provision฀of฀$13.5฀
million฀in฀the฀fourth฀quarter฀with฀respect฀to฀enhanced฀compensatory฀damages฀for฀the฀period฀up฀to฀
March฀1,฀2003.
Plaintiff’s฀Attorney฀Fees
The฀Court฀ordered฀that฀NTP฀be฀awarded฀plaintiff’s฀attorney฀fees฀for฀the฀period฀up฀to฀February฀22,฀2003,฀
at฀a฀factor฀of฀0.8฀or฀80%฀of฀actual฀fees฀incurred฀by฀NTP฀in฀this฀matter.฀The฀Company฀has฀recorded฀an฀
additional฀provision฀of฀$5.0฀million฀in฀the฀fourth฀quarter฀with฀respect฀to฀estimated฀plaintiff’s฀attorney฀
fees฀for฀the฀period฀up฀to฀March฀1,฀2003.฀This฀provision฀is฀subject฀to฀receipt฀and฀review฀of฀NTP’s฀summary฀
of฀attorney฀fees฀for฀this฀period.
Postjudgment฀Interest
The฀Company฀also฀recorded฀additional฀postjudgment฀interest฀for฀the฀period฀November฀22,฀2002฀
to฀March฀1,฀2003฀to฀account฀for฀the฀Court’s฀awards฀in฀these฀new฀rulings.
The฀Court฀has฀not฀yet฀ruled฀on฀other฀matters,฀including฀whether฀or฀not฀an฀injunction฀will฀be฀granted฀to฀NTP.฀
Given฀the฀above,฀during฀the฀fourth฀quarter฀of฀scal฀2003,฀the฀Company฀recorded฀an฀expense฀of฀
$25.5฀million฀with฀respect฀to฀the฀NTP฀matter฀to฀provide฀for฀additional฀estimated฀compensatory฀
damages฀for฀the฀period฀November฀1,฀2002฀to฀February฀28,฀2003;฀enhanced฀compensatory฀damages฀