Autodesk 2007 Annual Report Download - page 86

26
Spatial’s appeal. The trial court awarded Autodesk approximately $0.2 million on April 1, 2006. As a result,
the ultimate resolution of this matter did not have a material effect on Autodesk’s financial position,
results of operations or cash flows.
On September 22, 2004, z4 Technologies, Inc. (“z4”) filed suit against Autodesk and Microsoft
Corporation in the United States District Court, Eastern District of Texas, alleging infringement of U.S.
Patent No. 6,044,471 (“471 patent”), entitled “Method and Apparatus for Securing Software to Reduce
Unauthorized Use,” and U.S. Patent No. 6,785,825 (“825 patent”), entitled “Method for Securing Software
to Decrease Software Piracy.” z4’s complaint alleged that Autodesk infringed both patents by making,
using, selling, and offering for sale the claimed matter of these patents without the plaintiff’s authority. In
its complaint, z4 sought compensatory damages amounting to a 1.5% royalty, injunctive relief and fees and
costs. On April 19, 2006, a jury returned a verdict finding that certain Autodesk products infringed both
patents, awarding z4 $18 million in damages. In light of the jury’s verdict, we accrued the full amount of
this verdict, which represented our best estimate of the probable loss, of which $16.8 million was expensed
during the first quarter of fiscal 2007. The court entered judgment against Autodesk on August 18, 2006,
awarding z4 $18 million in damages, pre-judgment interest and attorneys’ fees. Autodesk filed our notice
of appeal of the judgment on September 8, 2006. On December 20, 2006, Autodesk and z4 entered into
a settlement agreement which resolved all of the issues between the parties. The final resolution of the
z4 litigation did not have a material effect on Autodesk’s financial position, results of operations or cash
flows. Following the guidance set forth in Statement on Auditing Standards No. 1 “Codification of Auditing
Standards and Procedures” AU Section 560 “Subsequent Events,” we reversed $13.0 million of previously
accrued reserves during the second quarter of fiscal 2007.
On August 26, 2005, Telstra Corporation Limited (“Telstra”) filed suit in the Federal Court of Australia,
Victoria District Registry against Autodesk Australia Pty Ltd. (“AAPL”) seeking partial indemnification for
claims filed against Telstra by SpatialInfo Pty Limited relating to Telstra’s use of certain software in the
management of its computer-based cable plant records system. On December 12, 2005, SpatialInfo added
AAPL as a defendant to its lawsuit against Telstra. Autodesk is currently investigating the allegations
and intends to vigorously defend the case. Although this case is in the early stages and Autodesk cannot
determine the final financial impact of this matter, based on the facts known at this time, we believe the
ultimate resolution of this matter will not have a material effect on Autodesk’s financial position, results
of operations or cash flows. However, it is possible that an unfavorable resolution of this matter could
occur and materially affect our future results of operations, cash flows or financial position in a particular
period.
On July 12, 2006 New York University (“NYU”) filed suit against Autodesk in the United States District
Court, Southern District of New York, alleging infringement of U.S. Patent No. 6,115,053 (“053 patent”),
entitled “Computer Animation Method and System for Synthesizing Human-Like Gestures and Actions,”
and U.S. Patent No. 6,317,132 (“132 patent”), entitled “Computer Animation Method for Creating Computer
Generated Animated Characters.” NYU’s complaint alleged that Autodesk infringed both patents by
making, using, selling, and offering for sale the claimed matter of these patents without the plaintiff’s
authority. In its complaint, NYU seeks compensatory damages, injunctive relief and fees and costs.
Autodesk cannot determine the final financial impact of this matter, based on the facts known at this time,
we believe the ultimate resolution of this matter will not have a material effect on Autodesk’s financial
position, results of operations or cash flows. However, it is possible that an unfavorable resolution of this
matter could occur and materially affect our future results of operations, cash flows or financial position
in a particular period.