Blackberry 2013 Annual Report Download - page 37

The Company also engages in longer term fundamental research both directly and by selective funding of university research projects.
The Company endeavors to take advantage of specific government and academic financial assistance programs to support its research
activities where available.
The Company dedicates a major portion of its R&D investments to software for the BlackBerry wireless solution. This includes
device and platform software as well as device applications, server software and infrastructure with an emphasis on satisfying the
needs of both corporate IT departments and individual customers.
The Company has previously entered into two project development agreements with Technology Partnerships Canada (“TPC”),
which provided partial funding for certain research and development projects.
Funding received by the Company from TPC for the first agreement (TPC-1) totaled $3.9 million and was repayable in the form of
royalties of 2.2% on gross product revenues resulting from the project. The Company was obligated to pay royalties on all project
revenues up to a maximum of $6.1 million. The Company has fully repaid its obligations with respect to TPC-1.
The second agreement with TPC is for a development project (TPC-2) under which total contributions from TPC have been $23.3
million. The Company had fulfilled all prerequisite funding conditions and recorded all of the contributions as at February 28, 2004.
This contribution is repayable to TPC in the form of a royalty of 2.2% on gross business revenues, subject to the Company
maintaining a minimum number of Canadian employees and to certain annual maximum amounts through fiscal 2015, not exceeding
$45 million. The Company has recorded $4.9 million (CAD) on account of TPC royalty repayment expense with respect to TPC-2
obligation during fiscal 2013.
The Company also qualifies for investment tax credits (“ITC”) on eligible expenditures on account of Canadian scientific research
and experimental development. In fiscal 2013 the Company recognized the benefits of its ITCs in its consolidated statements of
operations as a reduction in income tax expense.
I
ntellectual Property
The policy of the Company is to apply for patents, acquire and/or seek other appropriate proprietary or statutory protection when it
develops valuable new or improved technology. The Company believes that the rapid pace of technological change in the
communications industry makes patent and trade secret protection important, and that this protection must be supported by other
means including the ability to attract and retain qualified personnel, new product introductions and frequent product enhancements.
The Company protects its technology through a combination of patents, designs, copyrights, trade secrets, confidentiality procedures
and contractual arrangements. The Company seeks to patent key concepts, components, protocols, processes and other inventions that
it considers to
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