Blackberry 2004 Annual Report Download - page 52

Download and view the complete annual report

Please find page 52 of the 2004 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 62

  • 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
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62

50
Research In Motion Limited • Incorporated Under the Laws of Ontario (In thousands of United States dollars, except per share data, and except as otherwise indicated)
The Company is involved with in a dispute with
Inpro II Licensing, S.a.r.l. (“Inpro”) in connection
with two of Inpro’s patents. In a Delaware action,
Inpro is seeking a preliminary and permanent
injunction and an unspecified amount of damages
in relation to one of its patents. The matter is
currently scheduled for trial in September 2005 and
fact discovery must be complete by October 29,
2004. The Company filed an action for a declaratory
judgement of non-infringement with respect to one
of the two patents, which action is the subject of a
motion to stay or transfer to Delaware. Although the
Company has conducted a thorough review of the
relevant patents held by Inpro, and is of a view that
it does not infringe on such patents, at this time,
the likelihood of damages or recoveries and the
ultimate amounts, if any, with respect to all of the
Inpro actions is not determinable. Accordingly, no
amount has been recorded in these financial
statements as at February 28, 2004.
From time to time, the Company is involved in other
claims in the normal course of business.
Management regularly assesses such claims and
when matters are considered likely to result in a
material exposure and the amount of a related loss
is quantifiable, a provision for loss is made based
on management’s assessment of the likely outcome.
The Company does not provide for claims that are
considered unlikely to result in a significant loss,
claims for which the outcome is not determinable or
claims for which the amount of the loss cannot be
reasonably estimated. Any settlements or awards
under such claims are provided for when reasonably
determinable.
13. Product Warranty
The Company estimates its warranty costs at the
time of revenue recognition, based on historical
warranty claims experience, and records the expense
in Cost of sales. The warranty accrual balance is
reviewed quarterly to establish that it materially
reflects the remaining obligation, based on the
anticipated future expenditures over the balance of
the obligation period. Adjustments are made when
the actual warranty claim experience differs from
estimates.
The change in the Company’s accrued warranty
obligations from March 2, 2002 to February 28,
2004 was as follows:
Accrued warranty obligations at March 2, 2002 $ 3,355
Actual warranty experience during 2003 (577)
2003 warranty provision 5,465
Adjustments for changes in estimate (3,073)
Accrued warranty obligations at March 1, 2003 $ 5,170
Actual warranty experience during 2004 (3,946)
2004 warranty provision 8,648
Adjustments for changes in estimate (626)
Accrued warranty obligations at February 28, 2004 $ 9,246