TeleNav 2010 Annual Report Download - page 88

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TELENAV, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Purchase obligations
As of June 30, 2010, we had an aggregate of $15.9 million of future minimum noncancelable financial
commitments primarily related to license fees due to certain of our third party content providers over the next
five fiscal years. The aggregate of $15.9 million of future minimum commitments were comprised of $7.8
million due in 2011; $5.4 million due in 2012; $1.7 million due in 2013; and $1.0 million due in 2014.
Contingencies
From time to time, we may become involved in legal proceedings, claims and litigation arising in the
ordinary course of business. When we believe a loss or a cost of indemnification is probable and can be
reasonably estimated, we accrue the estimated loss or cost of indemnification in our consolidated financial
statements. Where the outcome of these matters is not determinable, we do not make a provision in our financial
statements until the loss or cost of indemnification, if any, is probable and can be reasonably estimated or the
outcome becomes known.
We have received claims from third parties asserting infringement of their intellectual property rights. In
addition, we have received demands for indemnification related to our services from certain of our wireless
carrier partners with respect to litigation to which they are a party.
In 2008, Alltel, AT&T, Sprint and T-Mobile, each demanded that we indemnify and defend them against a
lawsuit brought by Emsat Advanced Geo-Location Technology LLC and Location Based Services LLC
(collectively, “Emsat”) in the Northern District of Ohio (Case Nos. 4:08-cv-822, 4:08-cv-821, 4:08-cv-817,
4:08-cv-818) alleging that the wireless carriers infringe U.S. Patent Nos. 5,946,611, 6,324,404, 6,847,822 and
7,289,763 in connection with the delivery of wireless telephone services and seeking unspecified damages. The
Emsat entities are patent holding companies. In May 2009, several of the cases were stayed pending proceedings
relating to a request for reexamination of all the patents at issue in the litigation. In June 2009, the U.S. Patent
and Trademark Office denied the requests for reexamination as it relates to all of the patent claims asserted in the
lawsuits. Subsequently, the defendants in certain of the cases filed requests for reexamination of U.S. Patent
No. 6,847,822 and indicated that they would do the same with respect to U.S. Patent No. 7,289,763. The U.S.
Patent and Trademark Office is expected to rule on the requests by December 2009. In the Sprint and Alltel
cases, the court has not yet lifted the stay, and has not ruled on a pending motion to vacate the stay. In the
T-Mobile and AT&T cases, the parties voluntarily vacated the stay and a trial status conference with the court
was held on September 24, 2009. On December 22, 2009, the U.S. Patent and Trademark Office granted the
request for reexamination of 17 claims of U.S. Patent No. 6,847,822. On March 16, 2010, the U.S. Patent and
Trademark Office confirmed two of the 17 claims and rejected the other 15 claims. A claim construction hearing
was held on May 10, 2010 but a ruling has not yet been rendered by the court. T-Mobile and AT&T also filed a
motion for partial summary judgment on the invalidity of some asserted claims of the patents-in-suit. The motion
is pending before the court. Google joined as an intervenor in the T-Mobile case because T-Mobile also sought
indemnification from Google. In the AT&T case, Emsat amended the complaint to allege a breach of contract
claim and AT&T denied the allegation in its answer. The AT&T case was consolidated with EMSAT Advanced
Geo-Location Technology, LLC et al v. Tracfone Wireless, Inc. (Case No. 5:10-CV-00245). We cannot
reasonably determine whether and to what extent we would indemnify our wireless carrier partners or the
potential losses they and we may experience in connection with such litigation.
On November 17, 2009, WRE-Hol, LLC filed a complaint against us in the U.S. District Court for the
Western District of Washington (Case No. 2:09-cv-01642-MJP). The suit alleges that certain of our products and/
or services infringe U.S. Patent No. 7,149,625, and that we induce infringement and contribute to the
infringement of U.S. Patent No. 7,149,625 by others. According to the patent, the invention generally relates to a
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