Symantec 2002 Annual Report Download - page 105

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SYMANTEC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
approximately $3.1 million for post-judgment interest and other costs during the March 2002 quarter. As of
March 31, 2002, we believe that we have adequately accrued for both the damages and costs.
In October 1997, a complaint was Ñled in the United States District Court for the District of Utah on
behalf of PowerQuest Corporation, against Quarterdeck, which we acquired in March 1999. The complaint
alleges that Quarterdeck's partitioning software, included in Partition-It and Partition-It Extra Strength,
violated a patent held by PowerQuest. In January 1998, PowerQuest obtained a second patent relating to
partitioning and has amended its complaint to allege infringement of that patent as well. The plaintiÅ has
added us as a defendant and seeks an injunction against distribution of Partition-It and Partition-It Extra
Strength and monetary damages. We believe this claim has no merit, and we intend to defend the action
vigorously.
On September 15, 1997, Hilgraeve Corporation Ñled a lawsuit in the United States District Court,
Eastern District of Michigan, against us, alleging that unspeciÑed Symantec products infringe a patent owned
by Hilgraeve. The lawsuit requests damages, injunctive relief, costs and attorney fees. In March 2000, the
court granted our summary judgment motions and dismissed the case. In September 2001, the Court of
Appeals for the Federal Circuit reversed the summary judgment and ordered the case returned to the District
Court. We believe this lawsuit has no merit, and we intend to defend the action vigorously.
Over the past few years, it has become common for software companies, including us, to receive claims of
patent infringement. At any given time, we are evaluating claims of patent infringement asserted by several
parties, with respect to certain of our products. The outcome of any related litigation or negotiation could have
a material adverse impact on our future results of operations or cash Öows.
We are also involved in a number of other judicial and administrative proceedings that are incidental to
our business. We intend to defend all of the aforementioned pending lawsuits vigorously and although adverse
decisions (or settlements) may occur in one or more of the cases, the Ñnal resolution of these lawsuits,
individually or in the aggregate, is not expected to have a material adverse aÅect on our Ñnancial condition,
although it is not possible to estimate the possible loss or losses from each of these cases. Depending, however,
on the amount and timing of an unfavorable resolution of these lawsuits, it is possible that our future results of
operations or cash Öows could be materially adversely aÅected in a particular period. We have accrued certain
estimated legal fees and expenses related to certain of these matters; however, actual amounts may diÅer
materially from those estimated amounts.
The total amount of legal and settlement expenses accrued as of the respective year-ends and the
amounts expensed for the years ended are reÖected below:
Balance as of March 31, 2002 ÏÏÏÏÏÏÏ $12.5 million Amount expensed during Ñscal 2002 ÏÏ $9.0 million
Balance as of March 31, 2001 ÏÏÏÏÏÏÏ $ 8.4 million Amount expensed during Ñscal 2001 ÏÏ $3.4 million
Balance as of March 31, 2000 ÏÏÏÏÏÏÏ $ 8.7 million Amount expensed during Ñscal 2000 ÏÏ $7.3 million
The legal expenses accrued by us are deemed probable because the lawsuits have been Ñled, management
has determined its plans of action with regards to the cases and, accordingly, knows that it will incur legal
expenses related to the particular lawsuit. Utilizing the assumptions noted in the accounting policy, see
Summary of SigniÑcant Accounting Policies, management is able to estimate a minimum amount of legal fees
to be incurred in these lawsuits.
Note 17. Segment Information
Our operating segments are signiÑcant strategic business units that oÅer diÅerent products and services,
distinguished by customer needs. We have Ñve operating segments: Enterprise Security, Enterprise Adminis-
tration, Consumer Products, Services and Other.
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