Stamps.com 2012 Annual Report Download - page 22

On January 23, 2012, we completed the purchase of two adjacent buildings in El Segundo, California that now serve as our corporate
headquarters for an aggregate purchase price of $13.4 million. We moved into our new corporate headquarters during the third quarter of 2012.
We substantially completed the renovation and construction project on the property in 2012. We occupy a portion of the 99,600 square feet
space, with the remaining portion of the space continuing to be leased to the existing tenants. The purchase of the property and renovations were
funded out of our cash flow from operations and existing cash and investments.
We believe that our existing facilities are suitable and adequate for our present purposes.
On November 22, 2006, we filed a lawsuit against Endicia, Inc. and PSI Systems, Inc. in the United States District Court for the Central District
of California for infringement of eleven of our patents covering, among other things, Internet postage technology. We sought an injunction,
unspecified damages, and attorneys’
fees. On November 10, 2008, we were required to select fifteen claims (from over six hundred claims
available) to be the subject of the trial. On November 9, 2009, the Court granted the summary judgment motion of Endicia, Inc. and PSI
Systems, Inc. that the fifteen claims we selected are invalid. On June 15, 2011, the United States Court of Appeals for the Federal Circuit
affirmed the summary judgment ruling.
On August 8, 2008, PSI Systems, Inc. filed a lawsuit against us in the same court, alleging that we infringed three PSI Systems patents related to
Internet postage technology. PSI Systems sought an injunction, unspecified damages, and attorneys’
fees. On September 16, 2008, we filed
counterclaims for infringement of four more of our patents. In our counterclaim, we sought an injunction, unspecified damages, and attorneys’
fees. On March 6, 2012, we entered into a binding agreement with PSI Systems, Inc. to resolve all outstanding patent litigation among the
parties. On April 23, 2012, we executed a patent license and settlement agreement. Under the terms of the agreement, the parties agreed to a
patent cross-
licensing arrangement for the patents in dispute in (i) the lawsuit filed by Stamps.com against Endicia, Inc. and PSI Systems, Inc. on
November 22, 2006 and (ii) the lawsuit filed by PSI Systems, Inc. against Stamps.com Inc. on August 8, 2008, both in the United States District
Court for the Central District of California. In addition, the parties agreed to a five-
year period where each will not sue the other for patent
infringement. No payments were made to either party as part of the settlement.
In 2001, we were named, together with certain of our current and former board members and/or officers, as a defendant in several purported
class-
action lawsuits, filed in the U.S. District Court for the Southern District of New York. The lawsuits alleged violations of the Securities Act
of 1933 and the Securities Exchange Act of 1934 in connection with our initial public offering and a secondary offering of our common stock.
Plaintiffs sought damages and statutory compensation, including interest, costs and expenses (including attorneys’
fees). In October 2009, the
court approved a settlement of this action, which does not require us to make any payments. In January 2012, that settlement became final
following the resolution of all appeals.
We are subject to various other routine legal proceedings and claims incidental to our business, and we do not believe that these proceedings and
claims would reasonably be expected to have a material adverse effect on our financial position, results of operations or cash flows.
Not applicable.
Table of Contents
ITEM 3.
LEGAL PROCEEDINGS.
ITEM 4. MINE SAFETY DISCLOSURES.
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