Energizer 2005 Annual Report Download - page 41

ENR 2005 Annual Report 39
for the Federal Circuit vacated the trial court’s decision that Gillette’s
claims cover only three-bladed razors, and remanded the case back
to the trial court for further proceedings. Trial on Gillette’s claims and
the Company’s counterclaims is scheduled to begin in January 2006.
On December 19, 2003, Gillette filed suit against the Company’s
Wilkinson Sword subsidiary in Germany alleging that QUATTRO
infringes Gillette’s European patent which is equivalent to the three-
blade progressive geometry patent at issue in the Massachusetts
District Court. At a trial on December 2, 2004, the German court
hearing the matter held that the patent is limited to razors having
three blades, and therefore does not cover the Company’s four-
bladed QUATTRO razor. Gillette is appealing that decision.
On February 13, 2004, the Company filed a patent infringement
suit against Gillette in federal district court in Connecticut. The
amended complaint alleges that Gillette is infringing a Schick patent
concerning the connection of the blade cartridge to the razor han-
dle. In January 2005, Gillette filed a motion for summary judgment,
arguing that the Company’s patent was invalid. In June 2005, the
Company filed a motion for summaryjudgment, arguing that the
Mach3 and Venus products infringe the Company’s patent. A date
for hearing the motion has not been set, but any trial on the merits
will likely occur in 2006.
In May 2004, Gillette filed three suits against Wilkinson Sword in
Hamburg, Germany seeking preliminary injunctions. The first suit
alleges that sale of the Wilkinson SwordIntuition razor in Germany
infringes a Gillette patent covering the Intuition shower caddy. The
second suit alleges that the sale of the Wilkinson SwordIntuition
razor in Germany infringes a Gillette patent covering the Intuition
cartridge container. The third suit alleges that the manufacture and
sale of the Wilkinson Sword QUATTRO razor in Germany infringes
aGillette patent covering the razor handle. A hearing was held on
these three preliminaryinjunction requests on June 16, 2004 and,
when the judge indicated that he was going to deny the injunctions,
Gillette withdrew its requests. Gillette filed the same suits against
Wilkinson Sword in Düsseldorf, Germany, but did not seek preliminary
relief. The Intuition suits are currently on hold pursuant to a stand-
down agreement with Gillette, and Gillette has dismissed the third
suit relating to QUATTRO and Gillette’s razor handle patent.
The Company and its subsidiaries are parties to a number of other
legal proceedings in various jurisdictions arising out of the operations
of the Company business. Many of these legal matters, including
those described above, are in preliminary stages and involve complex
issues of law and fact, and may proceed for protracted periods of
time. The amount of liability, if any, from these proceedings cannot
be determined with certainty. However, based upon present infor-
mation, the Company believes that its ultimate liability, if any, arising
from pending legal proceedings, asserted legal claims and known
potential legal claims which are likely to be asserted, should not be
material to the Company’s financial position, taking into account
established accruals for estimated liabilities.
17. Other Commitments and Contingencies
An international affiliate of the Company has $5.0 of funds deposited
in a bank account that is acting as collateral for a certain bank loan.
The Company has reflected this bank deposit as restricted cash,
which is included in other current assets on the Consolidated
Balance Sheet. The loan was initiated in June 2004 for a three
month period. At each maturity,the Company renewed the agree-
ment. As the loan amount changes, the funds on deposit will be
required to increase or decrease with the loan amount. The impact
of this transaction is reflected in the financing section of the
Consolidated Statement of Cash Flows.
Future minimum rental commitments under noncancelable operating
leases in effect as of September 30, 2005, were $14.0 in 2006,
$10.4 in 2007, $8.3 in 2008, $6.7 in 2009, $5.8 in 2010 and $8.2
thereafter. These leases are primarily for office facilities.
Total rental expense for all operating leases was $26.2, $22.9 and
$22.2 in 2005, 2004 and 2003, respectively.