Blackberry 2005 Annual Report Download - page 67

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65
15. Litigation Award
The Company is the defendant in a patent litigation matter brought by NTP, Inc. (“NTP”) alleging that the
Company infringed on eight of NTP’s patents (the “NTP matter”).
Fiscal 2002
In November 2001, the Company was served with a complaint filed by NTP, alleging that RIM had infringed
on eight of NTP’s United States patents. NTP asserted that these patents cover the use of radio frequency
wireless communications in electronic mail systems.
Fiscal 2003
The matter went to trial in 2002 in the United States District Court for the Eastern District of Virginia
(the “District Court”), and the jury issued a verdict in favour of NTP on November 21, 2002, finding that
certain of the products and services that the Company sold in the United States infringed on five of NTP’s
patents. As a result, the jury awarded damages based upon its assessment of the estimated income derived
from certain of the Company’s revenues that were considered “infringing revenues”.
During the year ended March 1, 2003, the Company recorded quarterly charges in the second, third and fourth
quarters with respect to the NTP matter totalling $58.2 million to fully provide for enhanced compensatory
damages, current and estimated future costs with respect to ongoing legal and professional fees, plaintiff’s
attorney fees and prejudgment interest.
Fiscal 2004
On August 5, 2003, the District Court ruled on NTP’s request for an injunction with respect to RIM continuing
to sell BlackBerry handhelds, software and service in the United States and entered judgment with respect
to several previously announced monetary awards issued in favour of NTP. The District Court granted NTP
the injunction requested; however, the District Court then immediately granted RIM’s request to stay the
injunction sought by NTP pending the completion of RIM’s appeal.
For the year ended February 28, 2004, the Company recorded quarterly charges in the first, second, third
and fourth quarters with respect to the NTP matter totalling $35.2 million to fully provide for enhanced
compensatory damages, current and estimated future costs with respect to ongoing legal and professional
fees, prejudgment interest, and postjudgment interest for the period August 6, 2003 to February 28, 2004.
The $36.3 million attributable to enhanced compensatory damages and postjudgment interest was classified
as Restricted cash on the Consolidated Balance Sheets as at February 28, 2004.
Fiscal 2005
During the first quarter of fiscal 2005, the Company recorded an expense of $15.6 million to provide for
additional estimated enhanced compensatory damages, estimated postjudgment interest, and current
and estimated future costs with respect to ongoing legal fees. The $15.2 million attributable to enhanced
compensatory damages and postjudgment interest was classified as Restricted cash on the Consolidated
Balance Sheets as at May 29, 2004.
During the second quarter of fiscal 2005, the Company recorded an expense of $18.3 million to provide
for additional estimated enhanced compensatory damages and estimated postjudgment interest.
The $18.3 million attributable to enhanced compensatory damages and postjudgment interest was
classified as Restricted cash on the Consolidated Balance Sheets as at August 28, 2004.
For the years ended February 26, 2005, February 28, 2004 and March 1, 2003