HP 2008 Annual Report Download - page 151

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 17: Litigation and Contingencies (Continued)
subject to the levies on photocopiers established by that law. HP has filed a claim with the German
Federal Constitutional Court challenging that ruling.
On September 26, 2005, VG Wort filed an additional lawsuit against HP in the Stuttgart Civil
Court in Stuttgart, Germany seeking levies on MFDs sold in Germany between 1997 and 2001, as well
as for MFDs sold from 2002 onwards. On July 26, 2007, the court issued a decision following the ruling
of the Stuttgart Court of Appeals with respect to the initial VG Wort lawsuit as described above. HP
has appealed the decision. HP has submitted comments on the German Federal Supreme Court
judgment in the initial VG Wort lawsuit seeking levies on MFDs described above as required by the
court.
In July 2004, VG Wort filed a separate lawsuit against HP in the Stuttgart Civil Court seeking
levies on printers. On December 22, 2004, the court held that HP is liable for payments regarding all
printers using ASCII code sold in Germany but did not determine the amount payable per unit. HP
appealed this decision in January 2005 to the Higher Regional Court of Baden Wuerttemberg. On
May 11, 2005, the Higher Regional Court issued a decision confirming that levies are due. On June 6,
2005, HP filed an appeal to the German Federal Supreme Court in Karlsruhe. On December 6, 2007,
the German Federal Supreme Court issued a judgment that printers are not subject to levies under the
existing law. The court issued a written decision on January 25, 2008, and VG Wort subsequently filed
an application with the German Federal Supreme Court under Section 321a of the German Code of
Civil Procedure contending that the court did not consider their arguments. On May 9, 2008, the
German Federal Supreme Court denied VG Wort’s application. In addition, VG Wort has filed a claim
with the German Federal Constitutional Court challenging the ruling that printers are not subject to
levies. HP has submitted unsolicited arguments to the latter court, and VG Wort has been directed to
provide comments with respect to those arguments.
In September 2003, VG Wort filed a lawsuit against Fujitsu Siemens Computer GmbH (‘‘FSC’’) in
Munich State Court seeking levies on PCs. This is an industry test case in Germany, and HP has
agreed not to object to the delay if VG Wort sues HP for such levies on PCs following a final decision
against FSC. On December 23, 2004, the Munich State Court held that PCs are subject to a levy and
that FSC must pay 12 euros plus compound interest for each PC sold in Germany since March 2001.
FSC appealed this decision in January 2005 to the Higher Regional Court of Bavaria. On
December 15, 2005, the Higher Regional Court affirmed the Munich State Court decision. FSC filed an
appeal with the German Federal Supreme Court in February 2006. On October 2, 2008, the German
Federal Supreme Court issued a judgment that PCs were not photocopiers within the meaning of the
German copyright law that was in effect until December 31, 2007 and, therefore, not subject to the
levies on photocopiers established by that law. VG Wort has filed a claim with the German Federal
Constitutional Court challenging that ruling.
On December 29, 2005, ZPU, a joint association of various German collection societies, instituted
non-binding arbitration proceedings against HP before the arbitration board of the Patent and
Trademark Office demanding reporting of every PC sold by HP in Germany from January 2002 through
December 2005 and seeking a levy of 18.42 euros plus tax for each PC sold during that period. HP
filed a notice of defense in connection with these proceedings in February 2006, and an arbitration
hearing was held in December 2006. On August 3, 2007, the arbitration board issued a ruling proposing
a levy of 15 euros plus tax for each PC sold during that period. HP has rejected the ruling of the
arbitration board, and the arbitration proceedings have concluded. ZPU has filed a claim with the
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