HP 2012 Annual Report Download - page 159

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 18: Litigation and Contingencies (Continued)
levies on photocopiers established by that law. VG Wort subsequently filed a claim with the German
Federal Constitutional Court challenging that ruling. In January 2011, the Constitutional Court
published a decision holding that the German Federal Supreme Court decision was inconsistent with
the German Constitution and revoking the German Federal Supreme Court decision. The
Constitutional Court remitted the matter to the German Federal Supreme Court for further action. On
July 21, 2011, the German Federal Supreme Court stayed the proceedings and referred several
questions to the CJEU with regard to the interpretation of the European Copyright Directive. The
CJEU conducted an oral hearing in October 2012 and is expected to issue a decision approximately
seven months thereafter, after which the matter will be remitted back to the German Federal Supreme
Court.
Reprobel, a cooperative society with the authority to collect and distribute the remuneration for
reprography to Belgian copyright holders, requested HP by extra-judicial means to amend certain
copyright levy declarations submitted for inkjet MFDs sold in Belgium from January 2005 to December
2009 to enable it to collect copyright levies calculated based on the generally higher copying speed
when the MFDs are operated in draft print mode rather than when operated in normal print mode. In
March 2010, HP filed a lawsuit against Reprobel in the French-speaking chambers of the Court of First
Instance of Brussels seeking a declaratory judgment that no copyright levies are payable on sales of
MFDs in Belgium or, alternatively, that copyright levies payable on such MFDs must be assessed based
on the copying speed when operated in the normal print mode set by default in the device. On
November 16, 2012, the court issued a decision holding that Belgium law is not in conformity with EU
law in a number of respects and ordered that, by November 2013, Reprobel substantiate that the
amounts claimed by Reprobel are commensurate with the harm resulting from legitimate copying under
the reprographic exception.
Based on industry opposition to the extension of levies to digital products, HP’s assessments of the
merits of various proceedings and HP’s estimates of the number of units impacted and the amounts of
the levies, HP has accrued amounts that it believes are adequate to address the matters described
above. However, the ultimate resolution of these matters and the associated financial impact on HP,
including the number of units impacted, the amount of levies imposed and the ability of HP to recover
such amounts through increased prices, remains uncertain.
Skold, et al. v. Intel Corporation and Hewlett-Packard Company is a lawsuit filed against HP on
June 14, 2004 that is pending in state court in Santa Clara County, California. The lawsuit alleges that
Intel Corporation (‘‘Intel’’) concealed performance problems related to the Intel Pentium 4 processor
by, among others things, the manipulation of performance benchmarks. The lawsuit alleges that HP
aided and abetted Intel’s allegedly unlawful conduct. The plaintiffs seek unspecified damages,
restitution, attorneys’ fees and costs. On November 23, 2011, plaintiffs filed a motion seeking to certify
a nationwide class asserting claims under the California Unfair Competition Law. On April 19, 2012,
the court issued an order granting in part and denying in part the plaintiffs’ motion. As to Intel, the
court certified a nationwide class excluding residents of Illinois. As to HP, the court certified a class
limited to California residents who purchased their computers ‘‘from HP’’ for ‘‘personal, family or
household use.’’ As required by the same order, the plaintiffs filed an amended complaint that limits
their claims against HP to a California class while reserving the right to seek additional state-specific
subclasses as to HP.
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