TeleNav 2013 Annual Report Download - page 91

Table of Contents
ongoing in the U.S. Court of Appeals for the Federal Circuit. Due to the 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 April 30, 2010, Traffic Information, LLC filed a patent infringement lawsuit against us, seeking monetary damages, fees and expenses, and
other relief. The patent at issue was subject to reexamination by the PTO and found invalid. Plaintiff appealed this finding and on May 30, 2013, the
Patent Trial and Appeal Board confirmed the invalidity of these claims. Plaintiff has indicated its intent to appeal this finding. In light of the
reexamintion and plaintiff's appeal of the reexamination findings, the Court stayed the case and the case remains stayed until at least May 27, 2013.
Defendants have requested that the Court extend the stay. 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 complaint on our financial condition, results of operations or cash flows.
In addition, we have received, and expect to continue to receive, demands for indemnification from our wireless carrier and other customers,
which demands can be very expensive to settle or defend, and we have in the past offered to contribute to settlement amounts and incurred legal fees
in connection with certain of these indemnity demands. A number of these indemnity demands, including demands relating to pending litigation,
remain outstanding and unresolved as of the date of this Form 10-K. Furthermore, in response to these demands we may be required to assume
control of and bear all costs associated with the defense of our customers in compliance with our contractual commitments. At this time, we are not a
party to the following cases; however our customers have requested that we indemnify them in connection with such cases:
In 2008, Alltel, AT&T, Sprint and T-Mobile USA, or T-Mobile, each demanded that we indemnify and defend them against patent
infringement lawsuits brought by patent holding companies EMSAT Advanced Geo-Location Technology LLC and Location Based Services LLC
(collectively, “EMSAT”). After T-Mobile also sought indemnification and defense from Google, Inc., Google intervened in the T-Mobile litigation.
After claim construction and related motion practice, EMSAT agreed to dismiss all claims against Google in at least the T-Mobile suit, and in March
2011, EMSAT and AT&T settled their claims. By March 2011, all the EMSAT cases were either dismissed or stayed until the PTO completes its
reexamination of the validity of the patents at issue. Due to uncertainties related to litigation, we are unable to evaluate the likelihood of either a
favorable or unfavorable outcome. We have arbitrated with and compensated one carrier for our defense obligations, without a negative effect on our
financial condition, results of operations, or cash flows. We have not yet determined the extent of our defense obligations to the other wireless
carriers. We believe that it is reasonably possible that we will incur additional loss; however, we cannot currently estimate a range of other possible
losses we may experience in connection with this case. Accordingly, we are unable at this time to estimate the overall effects of these cases on our
financial condition, results of operations, or cash flows.
In March 2009, AT&T demanded that we indemnify and defend them against a patent infringement lawsuit brought by Tendler Cellular of
Texas LLC. In June 2010, AT&T settled its claims with Tendler and we came to an agreement with AT&T as to the extent of our contribution
towards AT&T's settlement; however, there continues to be a disagreement as to whether any additional amounts are owed to AT&T for legal fees
and expenses related to the defense of the matter. We believe that it is reasonably possible that we will incur additional loss; however, we cannot
currently estimate a range of other possible losses we may experience in connection with this case. Accordingly, we are unable at this time to
estimate the overall effects on our financial condition, results of operations, or cash flows.
7. Guarantees and indemnifications
Our agreements with our customers generally include certain provisions for indemnifying them against liabilities if our products and services
infringe a third party’s intellectual property rights or for other specified matters. We have in the past received indemnification requests or notices of
their intent to seek indemnification in the future from our customers with respect to specific litigation claims in which our customers have been
named as defendants.
We have agreed to indemnify our directors, officers and certain other employees for certain events or occurrences, subject to certain limits,
while such persons are or were serving at our request in such capacity. We may terminate the indemnification agreements with these persons upon
the termination of their services with us, but termination will not affect claims for indemnification related to events occurring prior to the effective
date of termination. The maximum amount of potential future
F-18