TeleNav 2012 Annual Report Download - page 90

Table of Contents
As of June 30, 2013, the total minimum sublease income to be received in the next three years was $3.9 million , which was comprised of $1.3
million to be received in fiscal 2014, $1.4 million to be received in fiscal 2015, and $1.2 million to be received in fiscal 2016.
Rent expense was $4.8 million , $4.9 million and $2.4 million for fiscal 2013 , 2012 and 2011 , respectively.
Purchase obligations
As of June 30, 2013 , in addition to our lease obligations, we had an aggregate of $12.3 million of future minimum noncancelable financial
commitments primarily related to license fees due to certain of our third party content providers over the next two fiscal years. The aggregate of
$12.3 million of future minimum commitments were comprised of $8.4 million due in fiscal 2014 , $3.7 million due in fiscal 2015 and $174,000 due
in fiscal 2016. The above commitment amounts exclude amounts already recorded on the Consolidated Balance Sheet.
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 expense legal fees
related to these matters as they are incurred.
On November 17, 2009, WRE-Hol, LLC, or WRE-Hol, filed a patent infringement lawsuit against us, seeking monetary damages, fees and
expenses and other relief. WRE-Hol later sought to add claims against us and certain of our founders, alleging misappropriation of trade secrets,
breach of contract, and wrongful patent inventorship. On April 27, 2010, we filed a reexamination request for all of the claims of the asserted patent
before the U.S. Patent and Trademark Office, or PTO. In the reexamination, the PTO rejected 44 of the 51
patent claims and confirmed the remaining
seven claims. We filed a separate reexamination request with the PTO for the seven confirmed claims. As result of the Examiner's initial findings in
that proceeding, WRE-Hol canceled all but one of the patent claims. We also filed an appeal to challenge some of the findings of the earlier
reexamination. On April 18, 2013 the Patent Trial and Appeal Board ruled in Telenav's favor on the appeal, rejecting all seven of the remaining
claims. While the Court's ruling appears to be dispositive of all of the asserted claims, we do not yet know whether WRE-Hol will seek to challenge
that finding. The Court stayed the entire litigation pending completion of the reexamination. At this time, the case remains stayed by the Court. Due
to the preliminary status of the lawsuit and uncertainties related to litigation, we are unable to evaluate the likelihood of either a favorable or
unfavorable outcome. We believe that it is reasonably possible that we will incur a loss; however, we cannot currently estimate a range of any
possible losses we may experience in connection with this case. Accordingly, we are unable at this time to estimate the effects of this lawsuit on our
financial condition, results of operations, or cash flows.
On December 31, 2009, Vehicle IP, LLC, or Vehicle IP, filed a patent infringement lawsuit against us, seeking monetary damages, fees and
expenses and other relief. Verizon Wireless was named as a co-defendant in the Vehicle IP litigation based on the VZ Navigator product and has
demanded that we indemnify and defend Verizon against Vehicle IP. At this time, we have not agreed to defend or indemnify Verizon. AT&T was
also named as a co-defendant in the Vehicle IP litigation based on the AT&T Navigator product. AT&T has tendered the defense of the litigation to
us and we are defending the case on behalf of AT&T. After the Court issued its claim construction ruling the parties agreed to focus on early
summary judgment motions, and asked the Court to postpone the rest of the case schedule pending the resolution of these potentially case-
dispositive
motions. The defendants filed motions for summary judgment of noninfringement. On April 10, 2013 the Court granted AT&T and Telenav's motion
for summary judgment of noninfringement. While the Court's ruling appears to be dispositive of plaintiff's claims, plaintiff is appealing the Court's
claim construction and summary judgment ruling. The appeal is currently
F-17
Fiscal Year:
2014
$
5,134
2015
4,170
2016
4,003
2017
5,049
2018 and thereafter
12,699
Total minimum lease payments
$
31,055