Overstock.com 2013 Annual Report Download - page 89

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we transferred at least $2.3 million and received in return transfers totaling at least $2.5 million. The trustee does not specify a date for the transactions;
however we believe that any alleged transaction with the Petters Company would have taken place in excess of seven years from the date of the filing of the
adversary proceeding. The case is in its discovery stages. We filed a motion to dismiss on statute of limitations and other grounds. The court consolidated the
issues in our motion with issues raised by motion in similar trustee-filed cases. The court issued legal rulings on these consolidated legal issues, and has
allowed portions of the case to proceed to the discovery stage. The nature of the loss contingencies relating to claims that have been asserted against us are
described above. However, no estimate of the loss or range of loss can be made. We intend to vigorously defend this action.
On November 17, 2010, we were sued in the Superior Court of California, County of Alameda, by District Attorneys for the California Counties of
Alameda, Marin, Monterey, Napa, Santa Clara, Shasta and Sonoma County, and the County of Santa Cruz later joined the suit. These district attorneys
sought damages and an injunction under claims for violations of California consumer protection laws, alleging we made untrue or misleading statements
concerning our pricing, price reductions, sources of products and shipping charges. The complaint asked for damages in the amount of not less than $15
million. We tried the case in September 2013 before the judge of the court and made final arguments in December 2013. On January 3, 2014, the court issued a
tentative ruling in favor of the District Attorneys, which became a final Statement of Decision on February 5, 2014. The decision provides for an injunction
that prescribes disclosures necessary for certain types of price advertising and price reductions and imposes civil penalties of $3,500 per day for practices
from March 2006 through September 2008, and $2,000 per day for September 2008 through September 2013, totaling $6.8 million. The court issued a Final
Judgment February 19, 2014 reflecting the Court’s Statement of Decision. Plaintiff may apply to the court for a reimbursement of costs. It is unknown
whether the plaintiff will request or have entitlement to an award of attorneys fees, or whether the court would grant any such request. While we intend to
comply with the judgment, we will appeal. We will likely have to post an appeal bond under California rules or alternatively, by agreement, provide some form
of surety in the amount of the ordered penalty. The nature of the loss contingencies relating to claims that have been asserted against us are described above. We
intend to continue to vigorously defend this action.
On September 11, 2011, Droplets, Inc. filed suit against us and eight other defendants in the United States District Court in the Eastern District of
Texas for infringement of a patent covering strings of programming code downloaded from a server to a client computer. We have answered the complaint. The
case is in its discovery stages and has been scheduled for trial in January 2015. The nature of the loss contingencies relating to claims that have been asserted
against us are described above. However, no estimate of the loss or range of loss can be made. We intend to vigorously defend this action and pursue our
indemnification rights with our vendors.
On September 13, 2011, Select Retrieval, LLC filed suit against us and 79 other defendants in the United States District Court for the District of
Delaware for infringement of a patent covering the hierarchical display of interactive links on a webpage. We filed a motion to dismiss which was denied. The
case is in its discovery stages. The nature of the loss contingencies relating to claims that have been asserted against us are described above. However, no
estimate of the loss or range of loss can be made. We intend to vigorously defend this action and pursue our indemnification rights, if any, with our vendors.
On January 27, 2012, Pragmatus Telecom, LLC filed suit against us in the United States District Court for the District of Delaware for infringement
of two patents covering a system for coordinating data and voice communications via customer contact channel changing system using voice over IP and
infringement of one patent for coordinating data and voice communications via customer contact channel changing system. We answered the complaint. We
tendered the defense of the case to an indemnitor. The case against us was stayed July 10, 2012, pending resolution of a declaratory judgment action filed by
our indemnitor against Pragmatus. Our indemnitor reached a settlement agreement with Pragmatus, requiring no payment from us, and on February 7, 2014
the case was dismissed.
On March 1, 2012, H-W Technology, L.C. filed suit against us in the United States District Court in the Northern District of Texas for infringement
of a patent entitled “Internet Protocol (IP) Phone with Search and Advertising Capability.” We answered the complaint. On January 28, 2013, we filed a motion
for summary judgment for invalidity on two claims of the patent. On September 23, 2013, the court granted the motion. H-W Technology has appealed. We
have applied to the court for court-ordered reimbursement of our legal fees and costs expended in our defense.
On May 2, 2012, Execware LLC filed suit against us in the United States District Court for the District of Delaware for infringement of a patent
entitled: “Integrated Dialog Box for Rapidly Altering Presentation of Parametric Text Data Objects on a Computer Display.” We have answered the complaint.
The case is in its discovery stages. The nature of the loss
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