Overstock.com 2004 Annual Report Download - page 85

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case) is conducting the defense of the case and has agreed to indemnify the Company against the claim and any judgment.
In May 2004, the Company filed a complaint against TLMT Holdings, Inc (f/k/a LastMinuteTravel.com, Inc.) in the Superior Court of the State of
Delaware alleging that it breached its contract with the Company. In July 2004, TLMT Holdings filed a counterclaim against the Company alleging that the
Company has breached the contract. The counterclaim seeks damages in an unspecified amount. The Company has filed an answer to the counterclaim and
believes it has defenses to the allegations and intends to pursue them vigorously. At this point in time, the Company does not have sufficient information to
assess the validity of the claims or the amount of potential damages.
In January 2003, the Company received a letter from NCR Corporation claiming that certain of the Company's business practices and information
technology systems infringe patents owned by NCR. The letter further stated that NCR would vigorously protect its intellectual property rights if the
Company does not agree to enter into licensing arrangements with respect to the asserted patents. On January 31, 2003, the Company filed a complaint in the
United States District Court of Utah, Central Division seeking declaratory judgment that the Company does not infringe any valid claim of the patents
asserted by NCR. On March 24, 2003, NCR filed an answer and counterclaims alleging that certain of the Company's business practices and information
technology systems infringe patents owned by NCR. On April 8, 2003, the Company filed an answer denying the material allegations in NCR's counterclaims.
On May 12, 2003, the parties entered into a standstill agreement, agreeing to the dismissal of the complaint and counterclaims without prejudice to either
party's ability to renew its claims at a later date. On May 19, 2003, the court entered an order dismissing the complaint and counterclaims without prejudice.
The parties each reserved all claims and counterclaims. In August 2004, NCR notified the Company of its intent to terminate the standstill agreement. On
September 2, 2004, the Company re-filed its complaint in the United States District Court of Utah, Central Division seeking declaratory judgment that the
Company does not infringe any valid claim of the patents asserted by NCR. On October 4, 2004, NCR filed an answer and counterclaims alleging that certain
of the Company's business practices and information technology systems infringe patents owned by NCR. On October 12, 2004, the Company filed an answer
denying the material allegations in NCR's counterclaims. Although the Company has filed an answer and believes it has defenses to the allegations and
intends to pursue them vigorously, the NCR lawsuit is not yet even in the early stages of discovery, and the Company does not have sufficient information to
assess the validity of the claims or the amount of potential damages.
In September 2004, the Company received a letter from BTG International Inc. claiming that certain of the Company's business practices and online
marketing information technology systems infringe patents owned by BTG. On September 14, 2004, without engaging in any meaningful discussion or
negotiation with the Company, BTG filed a complaint in the United States District Court of Delaware alleging that certain of the Company's business
practices and online marketing information technology systems infringe a single patent owned by BTG. On October 21, 2004, the Company filed an answer
denying the material allegations in BTG's claims. Although the Company has filed an answer and believes it has defenses to the allegations and intends to
pursue them vigorously, the BTG lawsuit is not yet even in the early stages of discovery, and the Company does not have sufficient information to assess the
validity of the claims or the amount of potential damages.
F-22