Zynga 2013 Annual Report Download - page 104

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Table of Contents
Company should pay damages of approximately $25 million for the period through September 2013. Plaintiff also sought a running royalty on
revenue of the allegedly infringing games through 2027-28. The Company disputed the methods employed and the conclusion reached by the
plaintiff’s expert. The Company’s damages expert opined that, under the same disputed conditions, the Company should pay $1 million. The
action was called for trial in Marshall in the Eastern District of Texas on November 12, 2013. On November 19, 2013, the jury returned a
unanimous verdict of non-infringement in favor of the Company. Plaintiff did not file any post-trial motions challenging the jury’s verdict nor a
notice of appeal.
In February 2013, the Company filed four petitions for inter partes review in the United States Patent and Trademark Office before the
Patent Trial and Appeal Board (the “PTAB”). The petitions ask the PTAB to review all asserted claims for the four patents that were originally
asserted in the Personalized Media Communications litigation action and, based on the referenced prior art, determine them to be invalid. On
July 25, 2013, the PTAB issued decisions finding a “reasonable likelihood that Zynga [will] prevail” and authorizing the institution of the
Company’s requested inter partes reviews, entered a Scheduling Order, and set oral arguments for April 22, 2014.
In February 2014, the Company and Personalized Media Communications concluded all remaining legal proceedings and reached an
agreement for a comprehensive license to Personalized Media Communications’ entire patent portfolio.
The Company is also party to various other legal proceedings and claims which arise in the ordinary course of business. In addition, we
may receive notifications alleging infringement of patent or other intellectual property rights. Adverse results in any such litigation, legal
proceedings or claims may include awards of substantial monetary damages, costly royalty or licensing agreements, or orders preventing us from
offering certain games, features, or services, and may also result in changes in our business practices, which could result in additional costs or a
loss of revenue for us and could otherwise harm our business. Although the results of such litigation cannot be predicted with certainty, we
believe that the amount or range of reasonably possible losses related to such pending or threatened litigation will not have a material adverse
effect on our business, operating results, cash flows, or financial condition should such litigation be resolved unfavorably. We recognize legal
expenses as incurred.
14. Geographical Information
The following represents our revenue based on the geographic location of our players (in thousands):
The following represents our property and equipment, net by location (in thousands):
100
Revenue
Year Ended December 31,
2013
2012
2011
United States
$
519,819
$
757,299
$
734,469
All other countries(1)
353,447
523,968
405,631
Total revenue
$
873,266
$
1,281,267
$
1,140,100
(1)
No country exceeded 10% of our total revenue for any periods presented.
Property and equipment, net
Year Ended December 31,
2013
2012
2011
United States
$
345,598
$
459,906
$
252,552
All other countries
3,195
6,168
4,188
Total property and equipment, net
$
348,793
$
466,074
$
256,740