Orbitz 2009 Annual Report Download - page 31

In the Orange County, Florida case, on December 22, 2008, the Florida Supreme Court denied the
defendants’ Petition to Invoke Discretionary Jurisdiction to review the Fifth District Court of Appeal’s
decision. The case is now remanded to the trial court for further action.
On January 12, 2009, the County of Monroe, Florida re-filed its purported class action complaint against
Orbitz Worldwide, Inc., Travelport Americas, LLC, Trip Network, Inc. (d/b/a Cheaptickets) and Orbitz, LLC.
We have also been contacted by several municipalities or other taxing bodies concerning our possible
obligations with respect to state or local hotel occupancy or related taxes. The cities of New Orleans,
Louisiana, Phoenix, Arizona, North Little Rock and Pine Bluff, Arkansas, 26 cities in California (including
Los Angeles and Oakland), an entity representing 84 cities and 14 counties in Alabama, the counties of
Jefferson, Arkansas, Brunswick and Stanly, North Carolina, Duval County, Florida and the Hawaii Department
of Taxation issued audit notices against the Company. These municipalities have not issued assessments, but
have requested information to conduct an audit and/or have requested that the Company register to pay local
hotel occupancy taxes.
In addition, the cities of Anaheim, San Diego and San Francisco, California, the counties of Miami-Dade
and Broward, Florida, the cities of Alpharetta, Cartersville, Cedartown, College Park, Dalton, East Point,
Hartwell, Macon, Rockmart, Rome, Tybee Island and Warner Robins, Georgia, the counties of Augusta,
Clayton, Cobb, DeKalb, Fulton, Gwinnett, Hart and Richmond, Georgia, the city of Philadelphia, Pennsylva-
nia, and state tax officials from Indiana and Wisconsin have begun audit proceedings and some have issued
assessments against the Company, ranging from almost nil to approximately $2 million, and totaling
approximately $7 million.
The Company disputes that any hotel occupancy or related tax is owed under these ordinances and is
challenging the assessments made against the Company. If the Company is found to be subject to the hotel
occupancy tax ordinance by a taxing authority and appeals the decision in court, certain jurisdictions may
attempt to require us to provide financial security or pay the assessment to the municipality in order to
challenge the tax assessment in court.
Litigation related to Intellectual Property
DDR Holdings, LLC v. Hotels.com, L.P., et al. On January 31, 2006, DDR Holdings, LLC (“DDR”)
filed an action in the United States District Court for the Eastern District of Texas (Marshall Division) against
a number of Internet companies, including Cendant Corporation, for alleged infringement of U.S. Patents Nos.
6,629,135 (entitled “Affiliate Commerce System and Method”), and 6,993,572 (entitled “System and Method
for Facilitating Internet Commerce with Outsourced Websites”), which DDR claims full right and title to. The
plaintiff asserts only patent infringement claims. The plaintiff seeks unspecified damages, injunctive relief, a
declaratory judgment and attorneys’ fees. On April 12, 2006, the plaintiff amended its complaint to add
Internetwork Publishing Corporation (d/b/a Lodging.com) as a defendant. On April 12, 2006, the plaintiff
voluntarily dismissed Cendant Corporation and named Cendant Travel Distribution Services Group, Inc. as a
defendant. On July 14, 2006, certain defendants filed a motion for summary judgment alleging that both
patents are invalid (Cendant Travel Distribution Services Group, Inc. and Internetwork Publishing Corporation
joined on July 19, 2006). On September 22, 2006, the plaintiff filed a second amended complaint adding Neat
Group Corporation as a defendant and not including Cendant Travel Distribution Services Group, Inc. as a
defendant. On September 26, 2006, DDR filed a request of reexamination in the United States Patent and
Trademark Office, of the patents-in-suit. DDR moved to stay the lawsuit pending the outcome of any
reexamination. On December 19, 2006, the court administratively closed the case pending reexamination. The
court ruled that actions by defendants during the reexamination may not be used to argue willful infringement,
but the court reserved judgment on whether damages are tolled. On February 2, 2007, the Patent and
Trademark Office granted DDR’s requests for reexamination of the two patents-in-suit.
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