Blackberry 2015 Annual Report Download - page 108

BlackBerry Limited
Notes to the Consolidated Financial Statements
In millions of United States dollars, except share and per share data, and except as otherwise indicated
33
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 a potential loss is considered probable and the amount is reasonably
estimable, provisions for loss are made based on management’s assessment of the likely outcome. Where a range of loss
can be reasonably estimated with no best estimate in the range, the Company records the minimum amount in the range.
The Company does not provide for 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.
As of February 28, 2015, there are no claims outstanding for which the Company has assessed the potential loss as both
probable to result and reasonably estimable, therefore no accrual has been made. Further, there are claims outstanding for
which the Company has assessed the potential loss as reasonably possible to result, however an estimate of the amount of
loss cannot reasonably be made. There are many reasons that the Company cannot make these assessments, including,
among others, one or more of the following: the early stages of a proceeding does not require the claimant to specifically
identify the patent that has allegedly been infringed; damages sought are unspecified, unsupportable, unexplained or
uncertain; discovery has not been started or is incomplete; the facts that are in dispute are highly complex (e.g., once a
patent is identified, the analysis of the patent and a comparison to the activities of the Company is a labour-intensive and
highly technical process); the difficulty of assessing novel claims; the parties have not engaged in any meaningful
settlement discussions; the possibility that other parties may share in any ultimate liability; and the often slow pace of
patent litigation.
Though they do not meet the test for accrual described above, the Company has included the following summaries of
certain of its legal proceedings that it believes may be of interest to its investors.
On January 3, 2014, the Company filed a lawsuit against Typo Products LLC (“Typo”) in the U.S. District Court for the
Northern District of California (the “USDCNDC”). The Company asserted that Typo infringes U.S. Patent Nos.
7,629,964 and 8,162,552, generally directed to a keyboard for use with a mobile communication device. The Company
also asserted that Typo infringed U.S. Design Patent No. D685,775, generally directed to a keyboard design, and trade
dress relating to keyboards. The complaint seeks an injunction, monetary damages, and other relief that the court deems
just and proper. On January 22, 2014, the Company filed a motion for preliminary injunction to enjoin Typo from
infringing U.S. Patent No. 7,629,964 and U.S. Design Patent No. D.685,775. Typo filed its opposition on February 5,
2014 and on March 11, 2014, the Company filed a motion to dismiss Typo's counterclaim and defenses. On March 28,
2014, the court granted the Company's motion for preliminary injunction, which went into effect after the Company's
payment of a $0.5 million bond. On May 9, 2014, the court granted the Company's motion to dismiss. Typo has
withdrawn its products from the market pursuant to the injunction, pending resolution of the lawsuit. The Company
prevailed on its claim construction and filed an amended complaint adding related party Show Media LLC to the
litigation. On December 26, 2014, Typo filed a motion for summary judgment. On February 4, 2015, the court granted
the renewed motion for contempt, ordering Typo to pay the Company $0.9 million in sanctions, as well as fees and costs.
Proceedings are ongoing.
On February 16, 2015, the Company filed a lawsuit against Typo, Typo Innovations, LLC, Show Media LLC, Hallier
Investments, LLC and Laurence Hallier in the USDCNDC. The lawsuit relates to a modified version of the product
accused in the Typo complaint described in the paragraph above. The Company asserted that the defendants infringe U.S.
Patent Nos. 7,417,565 and 8,162,552, generally directed to a keyboard for use with a mobile communication device, and
U.S. Patent No. 8,493,322, generally directed to a text input method. The Company also asserted that the defendants
infringe U.S. Patent Nos. 8,431,849 and 8,658,925, generally directed to a keypad assembly with backlighting and trade
dress relating to keyboards. The complaint seeks an injunction, monetary damages, and other relief that the court deems
just and proper. Proceedings are ongoing.
Between October and December 2013, several purported class action lawsuits and one individual lawsuit were filed
against the Company and certain of its former officers in various jurisdictions alleging that during the period from
September 27, 2012 through September 20, 2013, the Company and certain of its officers made materially false and
misleading statements regarding the Company’s financial condition and business prospects and that certain of the
Company’s financial statements contain material misstatements. The individual lawsuit was voluntarily dismissed. In
respect of the U.S. class actions, four motions for the appointment of lead plaintiff were filed. On March 14, 2014, the
Judge consolidated the proceedings in the U.S. District Court for the Southern District of New York. On May 27, 2014,
the Consolidated Amended Class Action Complaint was filed. The Company filed a motion to dismiss the complaint. On
March 13, 2015, the court issued an order granting the Company's motion to dismiss. The proceeding is ongoing.