Qualcomm 2011 Annual Report Download - page 89

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
shares of common stock at 85% of the lower of the fair market value on the first or the last day of each offering period, which is generally six
months. Employees may authorize the Company to withhold up to 15% of their compensation during any offering period, subject to certain
limitations. The employee stock purchase plan includes a non-423(b) plan. The shares authorized under the employee stock purchase plan were
approximately 46,709,000 at September 25, 2011 . The shares reserved for future issuance were approximately 18,411,000 at September 25,
2011 . During fiscal 2011 , 2010 and 2009 , approximately 3,778,000 , 3,782,000 and 3,654,000 shares, respectively, were issued under the plan
at an average price of $36.82 , $32.81 and $29.72 per share, respectively.
At September 25, 2011 , total unrecognized estimated compensation cost related to non-vested purchase rights granted prior to that date was
$17 million . The Company recorded cash received from the exercise of purchase rights of $139 million , $124 million and $109 million during
fiscal 2011 , 2010 and 2009 , respectively.
Note 9. Commitments and Contingencies
Legal Proceedings. Tessera, Inc. v. QUALCOMM Incorporated:
On April 17, 2007, Tessera filed a patent infringement lawsuit in the United
States District Court for the Eastern District of Texas and a complaint with the United States International Trade Commission (ITC) pursuant to
Section 337 of the Tariff Act of 1930 against the Company and other companies, alleging infringement of two patents. The district court action is
stayed pending resolution of the ITC proceeding, including all appeals. On May 20, 2009, the ITC issued a limited exclusion order and a cease
and desist order, both of which were terminated when the patents expired on September 24, 2010 . During the period of the exclusion order, the
Company shifted supply of accused chips for customers who manufacture products that may be imported to the United States to a licensed
supplier of Tessera, and the Company continued to supply those customers without interruption. On December 21, 2010, the United States Court
of Appeals for the Federal Circuit issued a decision affirming the ITC’s orders, and on March 29, 2011, it declined to reconsider that decision.
The Company has appealed to the United States Supreme Court, which may or may not accept this case for appeal. Once the stay is lifted,
Tessera may continue to seek back damages in the district court, but it may not seek injunctive relief due to the expiration of the patents.
MicroUnity Systems Engineering, Inc. v. QUALCOMM Incorporated et al. : MicroUnity filed a total of three patent infringement
complaints, on March 16, 2010, June 3, 2010 and January 27, 2011, against the Company and a number of other technology companies,
including Texas Instruments, Samsung, Apple, Nokia, Google and HTC, in the United States District Court for the Eastern District of Texas. The
complaints against the Company allege infringement of a total of 15 patents and appear to accuse the Company’s Snapdragon products. The
district court consolidated the actions in May 2011. The claim construction hearing is set for August 12, 2012, and trial is scheduled for June 3,
2013. On September 30, 2011, the court denied the Company’
s motion to sever the claims against it from the other defendants and to transfer the
case to the United States District Court for the Northern District of California.
Broadcom Corporation et al. v. Commonwealth Scientific and Industrial Research Organisation (CSIRO) : On November 10, 2009,
Broadcom and Atheros (Note 12), which was acquired by the Company in May 2011, filed a complaint for declaratory judgment against
(CSIRO) in the United States District Court for the Eastern District of Texas, requesting the court to declare, among other things, that United
States patent number 5,487,069 (the ’069 Patent) assigned to CSIRO is invalid, unenforceable and that Atheros does not infringe any valid
claims of the ’069 Patent. On October 14, 2010, CSIRO filed a complaint against Atheros and Broadcom (amended and consolidated with
complaints against other third parties on April 6, 2011) alleging infringement of the ’069 Patent. A claim construction hearing was held on
October 4, 2011, and trial is scheduled for April 9, 2012.
MOSAID Technologies Incorporated v. Dell, Inc. et al. : On March 16, 2011, MOSAID filed a complaint against Atheros and 32 other
entities in the United States District Court for the Eastern District of Texas. In its infringement contentions, MOSAID alleges that certain of
Atheros’ products infringe United States patent numbers 5,131,006, 5,151,920, 5,422,887, 5,706,428, 5,563,786 and 6,992,972. MOSAID seeks
unspecified damages and other relief. Discovery has not yet begun. A claim construction hearing is scheduled for February 18, 2014, and trial is
scheduled for August 4, 2014.
India BWA Spectrum: In connection with the BWA spectrum won in India in June 2010, the Company recorded a payment in noncurrent
other assets, which was $994 million and $1.1 billion at September 25, 2011 and September 26, 2010, respectively. In addition, the Company
created four wholly-
owned subsidiaries. On August 9, 2010, each subsidiary filed an application to obtain a license to operate a wireless network
on this spectrum for one of the respective regions. Thereafter, two Indian companies each acquired 13% of each subsidiary . On September 21,
2011, the Company received a letter dated September 7, 2011 from the Government of India’s Department of Telecommunications (DoT) (the
DoT Letter) notifying the Company that its applications had been rejected based on its conclusion that the applications were filed after the
deadline and that the Company was restricted to filing one application rather than four. On September 27, 2011, the Company filed a petition
with the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) seeking to overturn the DoT Letter. On September 28, 2011, the
TDSAT issued an order granting the Company interim relief, pending a final determination of the case, directing the DoT to (i) not issue the
spectrum that has been earmarked to the Company to anyone else and (ii) not forfeit or appropriate the
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