Blackberry 2012 Annual Report Download - page 221

Research In Motion Limited
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Legal Proceedings
The Company is involved in litigation in the normal course of its business, both as a defendant and as a plaintiff. The Company is
subject to a variety of claims (including claims related to patent infringement, purported class actions and other claims in the normal
course of business) and may be subject to additional claims either directly or through indemnities against claims that it provides to
certain of its partners and customers. In particular, the industry in which the Company competes has many participants that own, or
claim to own, intellectual property, including participants that have been issued patents and may have filed patent applications or may
obtain additional patents and proprietary rights for technologies similar to those used by the Company in its products. The Company
has received, and may receive in the future, assertions and claims from third parties that the Company’s products infringe on their
patents or other intellectual property rights. Litigation has been and will likely continue to be necessary to determine the scope,
enforceability and validity of third-party proprietary rights or to establish the Company’s proprietary rights. Regardless of whether
claims against the Company have merit, those claims could be time-consuming to evaluate and defend, result in costly litigation,
divert management’s attention and resources, subject the Company to significant liabilities and could have the other effects that are
described in greater detail under “Risk Factors – Risks Related to Intellectual Property” and “Risk Factors - Risks Related to the
Company’s Business and its Industry - The Company is subject to general commercial litigation, class action and other litigation
claims as part of its operations, and it could suffer significant litigation expenses in defending these claims and could be subject to
significant damage awards or other remedies” in RIM’s Annual Information Form for the fiscal year ended March 3, 2012, which is
included in RIM’s Annual Report on Form 40-F.
Management reviews all of the relevant facts for each claim and applies judgment in evaluating the likelihood and, if applicable, the
amount of any potential loss. Where it is considered probable for a material exposure to result 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.
On March 7, 2008, FlashPoint Technology Inc. (“FlashPoint”) filed a patent infringement lawsuit against the Company and 14 other
defendants in the U.S. District Court for the District of Delaware. The patents-in-suit include United States (“U.S.”) Patent Nos.
6,118,480, 6,177,956, 6,222,538, 6,223,190 (the “‘190 Patent”), 6,249,316, 6,486,914 and 6,504,575. These patents are generally
directed to digital camera and imaging technologies. On May 31, 2008, FlashPoint dismissed its complaint as to 6 of the 7 patents-in-
suit, leaving only the ‘190 Patent in the litigation against the Company. On February 6, 2009, FlashPoint filed an amended complaint
adding Patent Nos. 5,903,309, 6,278,447 (the “‘447 Patent”) and 6,400,471 (the “‘471 Patent”). Only the ‘447 Patent and the ‘471
Patent were asserted against the Company. The complaint sought an injunction and monetary damages. On December 17, 2009, the
Court stayed the entire litigation pending completion of all re-examinations of the patents-in-suit.
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