HTC 2015 Annual Report Download - page 75

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Financial status, operating results and risk management
Financial status, operating results and risk management
146
147
InMarch2012,WashingtonCourtgrantedontheCompany’ssummaryjudgmentmotionandruled
on non-infringement of two of patents-in-suit. As for the third patents-in-suit, the Washington
Courthasgrantedastayoncasependingappealdecision.InJanuary2014,theCourtofAppealfor
the Federal Circuit affirmed the Washington Court’s decision.
As of the date that the board of directors approved and authorized for issuing consolidated financial
statements, there had been no critical hearing nor had a court decision been made, except for the
above.
(b)InJuly2014,USpatentholdingcompanyAcaciaResearchCorporation(“Acacia”)hasenforcedits6
AMR-WBstandardessentialpatentportfolioagainstDeutscheTelekomandVodafoneseparatelyin
Germany through its subsidiary Saint Lawrence Communications GmbH (“SLC”).
InMarch2015,SLCgotgranted4injunctionsagainstDeutscheTelekombytheMannheimcourt.
Forthe1stinjunction,DeutscheTelekomhadsuccessfullystayedtheenforcementbyposting
acounterbondinlateMarch2015.Forthe2ndto4thinjunctions,SLChasnotenforcedthem
againstDeutscheTelekomyet.ThewaySLCenforcedthis6-patentportfolioissubjecttotheanti-
competition review by European Commission.
ThelitigationsbetweenSLCandDeutscheTelekominManheimandVodafoneinDusseldorfare
stillongoing.Inordertoprotecttheinterestofthecarriercustomers,theCompanyhasofficially
intervenedthese2disputesinthecourtprocedure.Inaddition,theCompanyalsosuedAcaciafora
declaratoryjudgmentactioninUnitedStates.
As of the date that the board of directors approved and authorized for issuing consolidated financial
statements, there had been no critical hearing nor had a court decision been made, except for the
above.
(c)InApril2015,NTTDOCOMO(“NTT”)hasfiledalawsuitagainsttheCompanyintheDistrictCourt
ofMannheim,Germany,allegingthattheCompanyinfringedthreeLTEandoneUMTSstandard
essentialpatentsownedbyNTT.InJanuaryandFebruary2016,theMannheimCourthasfound
thattheCompanysmartphonesoldinGermanyinfringeoneUMTSandoneLTEGermanyparts
ofEuropeanpatentsownedbyNTT,andgrantedaninjunctionagainsttheCompanyinthefirst
decision.ThelitigationbetweentheCompanyandNTTarestillongoing.Inordertoprotectthe
interests of the Company, customers and consumers, the Company appealed the above-mentioned
decisions immediately.
As of the date that the board of directors approved and authorized for issuing consolidated financial
statements, there had been no critical hearing nor had a court decision been made, except for the
above.
(d) On the basis of its past experience and consultations with its legal counsel, the Company has
measured the possible effects of the contingent lawsuits on its business and financial condition.
13. Other important risks and mitigating measures being or to be taken
None.
14. Risk management organization structure
Responsible/ImplementationUnit ControlItem ImplementationTasks
Legal Department Contractual and Legal Risk Manageoverallcorporatecontractualrisk
Finance and Accounting Division BusinessStrategyandFinancialRisks
Responsible for capital allocation and
management investment planning, customer
credit control, operational analysis, and cost
analysis
InternalAudit InternalControlRisk Assess comprehensiveness and effectiveness
of internal control systems
ProductDivision ProductTrendRisk Identifyfutureproductdevelopmenttrends
and customer demands
DesignQuality&EngineeringService
Division ProductDesignandQualityRisks
Ensure design quality of HTC products with
regard to hardware, software and product
safety
ManufacturingOperationCenter ProductionQualityRisk Enhance production quality
Customer Service and Quality
Assurance Division ProductQualityRisk Provideafter-salesserviceandenhancethe
quality of such
7. Other Important Matters
(1) Certification details of employees whose jobs are related to the
release of the company's financial information
Number of Employees
Certification Finance and Accounting Division InternalAudit
CertifiedPublicAccountants(CPA) 2 2
InternalAuditor -3
USCertifiedPublicAccountants(USCPA) 2 1
ChinaCertifiedPublicAccountants(ChinaCPA) - 1
CertifiedInternalAuditor(CIA) -3
Chartered Financial Analyst (CFA) 2 -
FinancialRiskManager(FRM) 2 -
Certified Fraud Examiner (CFE) - 2