Overstock.com 2012 Annual Report Download - page 116

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described above. However, no estimate of the loss or range of loss can be made. We intend to vigorously defend this action and pursue our
indemnification rights, if any, with our vendors.
On May 2, 2012, Execware LLC filed suit against us in the United States District Court for the District of Delaware for infringement of a patent
entitled: "Integrated Dialog Box for Rapidly Altering Presentation of Parametric Text Data Objects on a Computer Display." We have answered the
complaint. The case is in its early stages. The nature of the loss contingencies relating to claims that have been asserted against us are described above.
However, no estimate of the loss or range of loss can be made. We intend to vigorously defend this action and pursue our indemnification rights with
our vendors.
On May 10, 2012, Lodsys Group, LLC filed suit against us and seven other defendants in the United States District Court for the Eastern District
of Texas for infringement of a patent covering method and system for gathering information from units of a commodity across a network. We tendered
the defense of this action to an indemnitor which resolved the matter with no payment from us. The case has been dismissed.
On July 16, 2012, Digitech Image Technologies, LLC filed against us and forty-five other defendants in the United States District Court for the
Central District of California for infringement of a patent covering the imaging technology that facilitates prediction of color and location within digital
cameras. We tendered defense of the case to an indemnitor which accepted the defense. Following a ruling in our favor, the case was dismissed and in
September 2012, Digitech filed a new complaint in the same court on the same infringement claims. In the new action, our indemnitor continues to
defend the case. The case is in its early stages. The nature of the loss contingencies relating to claims that have been asserted against us are described
above. However, no estimate of the loss or range of loss can be made. We intend to cooperate with our indemnitor and vigorously defend this action.
On July 19, 2012, Data Carriers, LLC filed suit against us in the United States District Court for the District of Delaware for infringement of a
patent covering the "autocomplete" features of our website. We believe a third party vendor is contractually obligated to indemnify us in this action. We
have answered the complaint. The case is in its early stages. The nature of the loss contingencies relating to claims that have been asserted against us are
described above. However, no estimate of the loss or range of loss can be made. We intend to vigorously defend this action and pursue our
indemnification rights with our vendors.
We establish liabilities when a particular contingency is probable and estimable. At December 31, 2012, we have accrued $2.9 million in light of
these probable and estimable liabilities. It is reasonably possible that the actual losses may exceed our accrued liabilities. We have other contingencies
which are reasonably possible; however, the reasonably possible exposure to losses cannot currently be estimated.
We recognized a reduction in legal expenses of $88,000, zero and $4.5 million during the years ended December 31, 2012, 2011 and 2010
respectively, related to the settlement of legal matters.
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