Barnes and Noble 2015 Annual Report Download - page 63

services infringe U.S. Patent Nos. ,, (’ patent),
,, (’ patent) and ,, (’ patent). B&N
filed its Answer on August , , denying infringement
and asserting several affirmative defenses. At the same
time, B&N filed counterclaims seeking declaratory judg-
ments of non-infringement and invalidity with respect to
each of the patents-in-suit. Following the claim construc-
tion hearing held on November ,  (as to which the
Court issued a claim construction order on December ,
), the Court set a further amended case management
schedule, under which fact discovery was to be (and has
been) substantially completed by November , , and
concluded by December , ; and expert disclosures
and discovery were to be (and have been) completed by
January , . According to the amended case manage-
ment schedule, summary judgment motion briefing was to
have been, and has now been completed as of February ,
. The final pretrial conference, originally scheduled to
be held on February , , was adjourned by the Court
until April , . On that date the summary judgment
motions were orally argued to the Court, and the Court
reserved decision on such motions until a later date. The
parties then discussed various pretrial proceedings with
the Court, and the Court set the date of October ,  for
trial. Subsequently, on July , , the Court issued a deci-
sion granting partial summary judgment in B&N’s favor,
and in particular granting B&N’s motion to dismiss one of
Adrea’s infringement claims, and granting B&N’s motion to
limit any damages award with respect to another of Adrea’s
infringement claims.
Beginning October , , through and including October
, , the case was tried to a jury in the Southern
District of New York. The jury returned its verdict on
October , . The jury found no infringement with
respect to the ‘ patent, and infringement with respect
to the ‘ and ‘ patents. It awarded damages in the
amount of ,. The jury further found no willful
infringement with respect to any patent.
To date, the Court has yet to enter judgment, as it is cur-
rently reviewing and deciding post-trial briefing with
respect to certain legal issues raised by the parties, which,
if decided in B&N’s favor, could overturn all or a portion of
the jury’s findings on liability. Once the Court determines
those issues and enters judgment, it is anticipated that
the parties will file post-judgment motions, including, on
B&N’s part, a motion for judgment in its favor as a matter of
law, notwithstanding the jury’s verdict.
Commonwealth Scientific and Industrial Research
Organisation v. Barnes & Noble, Inc., et al.
On August , , Commonwealth Scientific and
Industrial Research Organisation (CSIRO) filed a com-
plaint against Barnes & Noble, Inc. and seven other
defendants in the United States District Court for the
Eastern District of Texas. The complaint alleges that the
Company is infringing U.S. Patent No. ,, (’
patent). On October , , the Company answered
the complaint, denying CSIRO’s material allegations,
asserting several affirmative defenses, and asserting
counterclaims for a declaratory judgment of invalidity and
non-infringement. On February , , the Company
amended its answer to add an affirmative defense that the
’ patent is unenforceable due to inequitable conduct.
On November , , the ’ patent expired. On January
, , CSIRO served an amended complaint to allege
that the Company is infringing the ’ patent because its
products may support the . ac and draft ac standards.
In this amended complaint, CSIRO dropped its request for
injunctive relief. On January , , the Company served
an amended answer to set forth additional Fair, Reasonable
and Non-Discriminatory (F/RAND) related defenses and
counterclaims: breach of contract, promissory estoppel,
and waiver. On February , , the Company and CSIRO
responded to these amended pleadings.
On June , , the Company and CSIRO executed an
agreement to settle the action without the need for further
litigation. The Company and CSIRO will be filing a dis-
missal of the action promptly.
OTHER LITIGATION AND PROCEEDINGS
Kevin Khoa Nguyen, an individual, on behalf of himself and
all others similarly situated v. Barnes & Noble, Inc.
On April , , a complaint was filed in the Superior
Court for the State of California against the Company.
The complaint is styled as a nationwide class action and
includes a California state-wide subclass based on alleged
cancellations of orders for HP TouchPad Tablets placed on
the Company’s website in August . The lawsuit alleges
claims for unfair business practices and false advertising
under both New York and California state law, violation of
the Consumer Legal Remedies Act under California law,
and breach of contract. The complaint demands specific
performance of the alleged contracts to sell HP TouchPad
Tablets at a specified price, injunctive relief, and mon-
etary relief, but does not specify an amount. The Company
submitted its initial response to the complaint on May
, , removing the case to the United States District
Court for the Central District of California, and moved to
2015 Annual Report 61