Overstock.com 2013 Annual Report Download - page 90

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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 July 16, 2012, Digitech Image Technologies, LLC filed against us and 45 other defendants in the United States District Court for the Central
District of California for infringement of a patent covering the imaging technology that facilitates prediction of color and location within digital cameras. The
initial case was dismissed, but in September 2012, Digitech filed a new complaint on the same infringement claims. Subsequently, the court granted a motion
for summary judgment on invalidity of the patent and entered judgment for us. Digitech has appealed. The appeal is in the briefing 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 cooperate with our indemnitor and vigorously defend this action.
On July 19, 2012, Data Carriers, LLC filed suit against us in the United States District Court for the District of Delaware for infringement of a
patent covering the “autocomplete” features of our website. We believe a third party vendor is contractually obligated to indemnify us in this action. We have
answered the complaint. 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 with our vendors.
On February 11, 2013, RPost Holdings, Inc., RPost Communications Limited, and RMail Limited, filed suit against us in the United States District
Court in Eastern District of Texas for infringement of patents covering products and services that verify the delivery and integrity of email messages. We
tendered defense of the case to an indemnitor which accepted the defense. We have answered the complaint. The case is in its early 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 with our vendors.
On April 23, 2013, Eclipse IP, LLC filed suit against us in the United States District Court in Eastern District of Texas for infringement of patents
covering “secure notification messaging systems and methods using authentication indicia.” We were served with the complaint on May 10, 2013, and
answered the complaint. Eclipse IP recently advised us that it intended not to pursue its alleged claims against us, and it dismissed its case against us with
prejudice on February 21, 2014.
On August 16, 2013, Online News Link LLC, LLC filed suit against us in the United States District Court in District of Delaware for infringement
of patents covering data distribution systems that can make downloading data fast and efficient. We are examining whether we are indemnified by any vendor.
We were served with the complaint on August 19, 2013. The case is in its early 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
any indemnification rights with our vendors.
On January 3, 2014, Guardian Media Technologies LTD filed suit against us in the United States District Court in the Eastern District of Texas for
infringement of patents covering parental control features in DVD players and televisions. The suit relates to two prior lawsuits with Guardian filed in 2008,
and in 2013, which were previously dismissed. We are examining whether we are indemnified by any vendor in this subsequent suit. The case is in its early
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 any indemnification rights with our vendors.
On September 30, 2013, Altaf Nazerali filed suit against us in the Supreme Court of British Columbia for vicarious liability for defamation, liable
and slander. The suit relates to alleged representations about Nazerali found on the website www.deepcapture.com. The suit alleges that the representations were
made by our Chief Executive Officer, Patrick Byrne, and two other employees. The case is in its early 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 establish liabilities when a particular contingency is probable and estimable. At December 31, 2013, we have accrued $8.5 million in light of
these probable and estimable liabilities. It is reasonably possible that the actual losses may exceed our accrued liabilities. We have other contingencies which are
reasonably possible; however, the reasonably possible exposure to losses cannot currently be estimated.
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