Adobe 2005 Annual Report Download - page 35

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lease or sublease all of these properties with the exception of our property in San Francisco, California, where we
own the building and the land.
Location
Approximate
Square
Footage Use
North America:
1-3 Riverside Center
Newton, California, USA
348,000*
Research, product development and sales
601 and 625 Townsend
San Franscisco, California, USA
263,000
Research, product development, sales,
marketing, and general and administrative
India:
Salapuria Infinity
Bangalore, India
56,000
Research and product development
UK:
12 Park Crescent
London
82,000
Sales
* We use approximately 24% of this facility.
ITEM 3. LEGAL PROCEEDINGS
On September 6, 2002, Plaintiff Fred B. Dufresne filed suit against Adobe, Microsoft Corporation,
Macromedia, Inc. and Trellix Corporation in the U.S. District Court, District of Massachusetts, alleging
infringement of U.S. Patent No. 5,835,712, entitled “Client-Server System Using Embedded Hypertext Tags for
Application and Database Development.” The Plaintiff’s complaint asserts that “defendants have infringed, and
continue to infringe, one or more claims of the ‘712 patent by making, using, selling and/or offering for sale, inter
alia, products supporting Microsoft Active Server Pages technology.” Plaintiff seeks unspecified compensatory
damages, preliminary and permanent injunctive relief, trebling of damages for “willful infringement,” and fees and
costs. We believe the action has no merit and are vigorously defending against it.
On June 13, 2005, Plaintiff Steve Staehr filed a shareholder derivative action entitled “Steve Staehr,
Derivatively on Behalf of Adobe Systems Incorporated v. Bruce R. Chizen, et. al.,” in the Superior Court of the
State of California for the County of Santa Clara against Adobe’s directors and naming Adobe as a nominal
defendant. The complaint alleges that the defendants breached their fiduciary duties of loyalty and due care and
caused Adobe to waste corporate assets by failing to renegotiate or terminate the acquisition agreement with
Macromedia following the announcement by Macromedia that it would restate its financial results for the fiscal
years ended March 31, 1999 through 2004. The complaint seeks, among other things, unspecified monetary
damages, attorneys’ fees and certain forms of equitable relief. On August 18, 2005, Plaintiff amended his complaint
to add a purported class action. Adobe has obligations under certain circumstances to hold harmless and indemnify
each of the defendant directors against judgments, fines, settlements and expenses related to claims against such
directors and otherwise to the fullest extent permitted under Delaware law and Adobe’s bylaws and certificate of
incorporation. Such obligations may apply to this lawsuit. We believe the action has no merit and are vigorously
defending against it.
In connection with our anti-piracy efforts, conducted both internally and through the Business Software
Alliance, from time to time we undertake litigation against alleged copyright infringers. Such lawsuits may lead to
counter-claims alleging improper use of litigation or violation of other local law and have recently increased in
frequency, especially in Latin American countries. We believe we have valid defenses with respect to such counter-
claims; however, it is possible that our consolidated financial position, cash flows or results of operations could be
affected in any particular period by the resolution of one or more of these counter-claims.
One such case is Consultores en Computación y Contabilidad, S.C. (“CCC”) v. Microsoft, Adobe, Symantec,
and Autodesk (the “Defendants”). On March 1, 2002, CCC, a Mexican hardware/software reseller, filed a lawsuit in
the Mexico Court of First Instance against the Defendants (all members of the Business Software Alliance). CCC