Blackberry 2007 Annual Report Download - page 97

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should be revoked. On December 5, 2006, RIM requested
that the court decide that RIM’s actions in the U.K. do not
infringe the same patent. Proceedings are currently pending.
On December 27, 2006, RIM commenced an action in Italy
in the Court of Milan, Specialized Division in Industrial and
Intellectual Property. RIM is requesting that the court declare
the Italian portion of Visto’s patent No. EP0996905 invalid
and declare that RIM’s activities in Belgium, France, Italy,
Germany, the Netherlands and Spain do not infringe patent
EP0996905. Proceedings are currently pending.
On May 31, 2006, RIM filed a declaratory judgment action
in the United States Court for the Northern District of Texas
against DataQuill BVI, Ltd. in which RIM seeks a ruling that the
United States Patent 6,058,304 is invalid and not infringed by
RIM products. On August 15, 2006, DataQuill filed a motion
to dismiss to which RIM filed a response on September
15, 2006. On March 27, 2007, the U.S. District Court for
the Northern District of Texas issued an order denying
DatQuill’s Motion to Dismiss. On April 24, 2007, DataQuill
filed its Answer and Counterclaim to RIM’s declaratory
judgment action. Proceedings are currently pending. At
this time, the likelihood of damages or recoveries and the
ultimate amounts, if any, with respect to this litigation is not
determinable. Accordingly, no amount has been recorded in
these consolidated financial statements as at March 3, 2007.
On July 26, 2006, Williams Wireless Technologies filed a
complaint against RIM Corporation and five other defendants in
the United States District Court for the Eastern District of Texas
alleging infringement of United States Patent No. 4,809,297 (the
‘297 patent). Williams Wireless seeks an unspecified amount
of damages for past infringement of the ‘297 patent. The
‘297 patent expired on February 28, 2006. RIM responded
to the complaint in October 2006 that the patent was invalid
and not infringed. Proceedings are currently pending. At
this time, the likelihood of damages or recoveries and the
ultimate amounts, if any, with respect to this litigation is not
determinable. Accordingly, no amount has been recorded in
these consolidated financial statements as at March 3, 2007.
On January 24, 2007, RIM was served with a Notice of
Application that was filed with the Ontario Superior Court of
Justice - Commercial List by a pension fund that alleges it was a
shareholder, seeking various orders against the Company and
named directors. On April 27, 2007 RIM was served with a Fresh
As Amended Notice of Application (the “Amended Notice
of Application”) by the shareholder. The Amended Notice of
Application seeks an order for a declaration that various actions
of the Company and the named directors were oppressive
or unfairly prejudicial to, or unfairly disregard, the interests of
the pension fund. In addition, the pension fund seeks various
orders that would restrict the members of the Company’s Audit
Committee and that would add one or more new members to
the Board of Directors, and establish a special committee to do
an investigation of the Company’s option granting practices.
The pension fund seeks, in the alternative, various orders
relating to the investigation of RIM’s option granting practices
and orders that would affect the Company’s Compensation
Committee. Last, the pension fund seeks an order granting
it leave to commence a derivative action in the name and
on behalf of the Company relating to RIM’s option granting
practices, seeking damages and ancillary relief against certain
of RIM’s directors. RIM and the other defendants have served
notices of motion to strike the claim in whole or in part, and
have served a notice of motion to strike summonses to witness
issued by the pension fund for the motion to strike the claim.
Both motions are pending but no date has been selected for the
hearing of either of the motions. No material damages against
the Company are sought, but rather, the shareholder principally
seeks declaratory relief and certain other mandatory orders. At
this time, it is not possible to determine the likelihood that the
shareholder will be successful in obtaining any relief under the
oppression remedy. In addition, at this time, it is not possible
to determine whether leave to commence the derivative action
will be granted, or if leave is granted, the likelihood of damages
or recoveries being awarded to the Company. Accordingly,
no amount has been recorded in these consolidated financial
statements as at March 3, 2007.
From time to time, the Company is involved in other
claims in the normal course of business. Additional lawsuits,
including purported class actions and derivative actions,
may be filed based upon allegations substantially similar to
those described in the Amended Notice of Application or
otherwise relating to the Company’s historical stock option
granting practices. Management assesses such claims and
where considered likely to result in a material exposure and,
where the amount of the claim is quantifiable, provisions
for loss are 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 where the amount of the loss cannot be reasonably
estimated. Any settlements or awards under such claims are
provided for when reasonably determinable.