Blackberry 2015 Annual Report Download - page 27

Table of Contents
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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.
RISK FACTORS
Investors in the Company’s common shares should carefully consider the following risks, as well as the other information
contained in this AIF and in the Company's MD&A for the fiscal year ended February 28, 2015. If any of the following risks
actually occurs, the Company’s business could be materially harmed. The risks and uncertainties described below are not the
only ones the Company faces. Additional risks and uncertainties, including those of which the Company is currently unaware or
the Company currently deems immaterial, may also have a material adverse effect on the Company’s business.
The Company may not be able to attract new enterprise customers or maintain its existing relationships with its
enterprise customers or transition them to the BES12 platform and deploy BlackBerry 10 smartphones.