Clearwire 2009 Annual Report Download - page 53

O
n Decem
b
er 1, 2008, A
d
apt
i
x, Inc., w
hi
c
h
we re
f
er to as A
d
apt
i
x,
fil
e
d
su
i
t
f
or patent
i
n
f
r
i
ngement aga
i
nst us an
d
Sp
rint in the United States District Court for the Eastern
D
i
strict of Texas, alle
g
in
g
that we and Sprint infrin
g
ed six
p
atents purportedl
y
owned b
y
Adaptix. On Februar
y
10, 2009, Adaptix filed an Amended Complaint alle
g
in
g
i
n
f
r
i
ngement o
f
a sevent
h
patent. A
d
apt
i
xa
ll
eges t
h
at
b
yo
ff
er
i
ng 4G mo
bil
eW
i
MAX serv
i
ces to su
b
scr
ib
ers
in
c
ompliance with the 802.1
6
e WiMAX standard, and b
y
makin
g
,usin
g
and/or sellin
g
the supportin
g
WiMAX networ
k
use
d
to prov
id
esuc
h
W
i
MAX serv
i
ces, we an
d
Spr
i
nt
i
n
f
r
i
nge t
h
e seven patents. A
d
apt
i
x
i
ssee
ki
ng monetary
d
amages,
attorne
y
s’ fees and a permanent in
j
unction en
j
oinin
g
us fro
m
further acts of alle
g
ed infrin
g
ement. On Februar
y
2
5
,2009
,
we
fil
e
d
an Answer to t
h
eAmen
d
e
d
Comp
l
a
i
nt,
d
eny
i
ng
i
n
f
r
i
ngement an
d
assert
i
ng severa
l
a
ffi
rmat
i
ve
d
e
f
enses
,
i
ncludin
g
that the asserted patents are invalid. We filed an Amended Answer on June 2
5
, 2009, addin
g
a counter-claim
for declarator
yj
ud
g
ment of non-infrin
g
ement and invalid
i
t
y
of the sub
j
ect patents. A trial is scheduled for December
2010, an
d
t
h
e part
i
es commence
ddi
scovery
i
n ear
l
y 2009. On Decem
b
er 21, 2009, A
d
apt
i
x
fil
e
db
ut
did
not serve a
n
additional suit for patent infrin
g
ement in the United States District Court for the Eastern District of Texas. That suit
a
ll
eges
i
n
f
r
i
ngement o
f
one patent re
l
ate
d
to t
h
ose asserte
di
nt
h
e prev
i
ous
l
y
fil
e
d
su
i
t. We
h
ave not
b
een serve
d
an
d
therefore have not appeared in the newl
y
-filed suit. On
F
ebruar
y
23, 2010, we reached a resolution with Adaptix and
S
pr
i
nt regar
di
ng A
d
apt
i
x’s patent
i
n
f
r
i
ngement
li
t
i
gat
i
on
s
p
en
di
ng
i
nt
h
eUn
i
te
d
States D
i
str
i
ct Court
f
or t
h
e Easter
n
D
istrict of Texas, whereb
y
the pendin
g
liti
g
ations will be dismissed without pre
j
udice
.
On Apr
il
22, 2009, a purporte
d
c
l
ass act
i
on
l
awsu
i
twas
fil
e
d
a
g
a
i
nst us
i
n Super
i
or Court
i
nK
i
n
g
Count
y,
W
ashington by a group of five plaintiffs from Hawaii, Minnesota, North Carolina and Washington. The lawsuit generall
y
alle
g
es that we disseminated false advertisin
g
about the qua
l
it
y
and reliabilit
y
of our services; imposed an unlawful earl
y
term
i
nat
i
on
f
ee; an
di
nvo
k
e
d
unconsc
i
ona
bl
eprov
i
s
i
ons o
f
our Terms o
f
Serv
i
ce to t
h
e
d
etr
i
ment o
f
customers. Among
other thin
g
s, the lawsuit seeks a determination that the alle
g
ed claims ma
y
be asserted on a class-wide basis; an order
d
ec
l
ar
i
n
g
certa
i
nprov
i
s
i
ons o
f
our Terms o
f
Serv
i
ce,
i
nc
l
u
di
n
g
t
h
e ear
ly
term
i
nat
i
on
f
ee prov
i
s
i
on, vo
id
an
d
unen
-
forceable; an injunction prohibiting us from collecting early termination fees and further false advertising; restitution o
f
an
y
ear
ly
term
i
nat
i
on
f
ees pa
id by
our su
b
scr
ib
ers; equ
i
ta
bl
ere
li
e
f
;an
d
an awar
d
o
f
unspec
ifi
e
dd
ama
g
es an
d
attorne
y
s
’
fees. On May 27, 2009, an amended complaint was filed and served, adding seven additional plaintiffs, including
i
ndividuals from New Mexico, Vir
g
inia and Wisconsin. On June 2, 2009, plaintiffs served the amended complaint. We
r
emove
d
t
h
e act
i
on to t
h
eUn
i
te
d
States D
i
str
i
ct Court
f
or t
h
e Western D
i
str
i
ct o
f
Was
hi
n
g
ton. On Ju
ly
23,2009,we
fil
e
d
a motion to dismiss the amended complaint. The Court sta
y
ed discover
y
pendin
g
its rulin
g
on the motion. The Cour
t
g
rante
d
our mot
i
on to
di
sm
i
ss
i
n
i
ts ent
i
ret
y
on Fe
b
ruar
y
2, 2010. P
l
a
i
nt
iff
s
h
ave 30
d
a
y
s to move t
h
eCourt
f
or
l
eave to
amend the com
p
laint. Whether
p
laintiffs will seek such leave is not determinable at this time.
On Septem
b
er 1, 2009, we were serve
d
w
i
t
h
a purporte
d
c
l
ass act
i
on
l
awsu
i
t
fil
e
di
nK
i
n
g
Count
y
Super
i
o
r
Court. The complaint alleges we placed unlawful telephone calls using automatic dialing and announcing devices. I
t
s
ee
k
s
d
ec
l
arator
y
,
i
n
j
unct
i
ve, an
d
/or equ
i
ta
bl
ere
li
e
f
an
d
statutor
yd
ama
g
es un
d
er
f
e
d
era
l
an
d
state
l
aw. On
O
cto
b
er 1, 2009, we remove
d
t
h
e case to t
h
eUn
i
te
d
States D
i
str
i
ct Court
f
or t
h
e Western D
i
str
i
ct o
f
Was
hi
ngton. O
n
O
ctober 22, 2009, the Court issued a stipulated order granting plaintiff until October 29, 2009 to file an Amended
Com
pl
a
i
nt. T
h
e
p
art
i
es
f
urt
h
er st
ip
u
l
ate
d
to a
ll
ow a Secon
d
Amen
d
e
d
Com
pl
a
i
nt, w
hi
c
hpl
a
i
nt
iff
s
fil
e
d
on
D
ecember 23, 2009. We then filed a motion to dismiss that was fully briefed on January 1
5
, 2010. Prior to the Cour
t
r
u
li
n
g
on t
h
e mot
i
on to
di
sm
i
ss, p
l
a
i
nt
iff
move
d
t
h
e Court
f
or
l
eave to
fil
ea
f
urt
h
er amen
d
e
d
comp
l
a
i
nt. On
Fe
b
ruary 22, 2010 t
h
e Court grante
d
our mot
i
on to
di
sm
i
ss
i
n part,
di
sm
i
ss
i
ng certa
i
nc
l
a
i
ms w
i
t
h
pre
j
u
di
ce an
d
g
rantin
g
plaintiff 20 da
y
s to amend the complaint. The Court dismissed plaintiff’s motion for leave to amend as
m
oot. T
hi
s case
i
s
i
nt
h
e ear
l
y stages o
fli
t
i
gat
i
on, an
di
ts outcome
i
sun
k
nown
.
I
n addition to the matters described above, we are often involved in certain other proceedin
g
s which arise in th
e
or
di
nary course o
fb
us
i
ness an
d
see
k
monetary
d
amages an
d
ot
h
er re
li
e
f
. Base
d
upon
i
n
f
ormat
i
on current
ly
ava
il
a
bl
e to us, none o
f
t
h
ese ot
h
er c
l
a
i
ms are expecte
d
to
h
ave a mater
i
a
l
a
d
verse e
ff
ect on our
b
us
i
ness,
fi
nanc
i
a
l
c
ondition or results of o
p
erations.
ITEM
4.
Submission of Matters to a Vote of Security Holders
Th
ere were no matters su
b
m
i
tte
d
to a vote o
f
t
h
e stoc
kh
o
ld
ers
d
ur
i
ng t
h
e per
i
o
d.
43