LeapFrog 2010 Annual Report Download - page 84

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LEAPFROG ENTERPRISES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
Legal Proceedings
From time to time, in the normal course of business, the Company is party to various pending claims and
lawsuits.
On April 30, 2010, NovelPoint Learning LLC (“NovelPoint”) (f/k/a Intuit Educational Ventures LLC) sued the
Company in the United States District Court for the Eastern District of Texas alleging that its Tag and Tag Junior
products infringe U.S. Patent No. 6,330,427 (Case No. 6:10-cv-229). NovelPoint is seeking unspecified monetary
damages and attorney’s fees. The court has set a trial date in June 2012. The Company intends to defend
ourselves vigorously. The Company is unable to predict the likelihood of an unfavorable outcome or estimate its
potential liability, if any, and no provision has been made in its financial statements for this matter.
20. Segment Reporting
The Company’s business is organized, operated and assessed in two geographic segments; United States (“U.S”)
and International.
The Company charges all of its indirect operating expenses and general corporate overhead to the U.S. segment
and do not allocate any of these expenses to the International segment.
The accounting policies of the segments are the same as those described in Note 2 of these Notes to the
Consolidated Financial Statements.
The primary business of the two operating segments is as follows:
• The U.S. segment is responsible for the development, design, sales and marketing of electronic
educational hardware products and related software, and learning toys, sold primarily through retail
channels and through the Company’s website in the United States.
• The International segment is responsible for the localization, sales and marketing of electronic
educational hardware products and related software, and learning toys, originally developed for the
United States, sold primarily in retail channels outside of the United States.
74