Stamps.com 2010 Annual Report Download - page 89

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TABLE OF CONTENTS
STAMPS.COM INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12. Legal Proceedings – (continued)
litigation, purchased the patents asserted in the litigation for $0.4 million, and granted Mr. Salim Kara options to purchase
35,000 shares of Stamps.com common stock. Mr. Kara also agreed to cooperate with us in the prosecution and enforcement of
any patents on which he is named as an inventor, including the patents asserted in the Stamps.com vs. Endicia litigation matters.
On December 22, 2010, Patent Management Foundation filed suit against us in the United States District Court for the
Northern District of California, alleging that we falsely marked certain of our products and advertisements with incorrect or
inapplicable patents. In addition, on February 22, 2011, Union Properties LLC filed suit against us in the United States District
Court for the Western District of Texas, also alleging that we falsely marked certain of our products and advertisements with
incorrect or inapplicable patents. We dispute the claims made by Patent Management Foundation and Union Properties LLC and
intend to defend these lawsuits vigorously.
In 2001, we were named, together with certain of our current and former board members and/or officers, as a defendant in
several purported class-action lawsuits, filed in the U.S. District Court for the Southern District of New York. The lawsuits
allege violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 in connection with our initial public
offering and a secondary offering of our common stock. Plaintiffs seek damages and statutory compensation, including interest,
costs and expenses (including attorneys’ fees). In October 2009, the court approved a settlement of this action, which does not
require us to make any payments. The court approval has been appealed.
We are subject to various other routine legal proceedings and claims incidental to our business, and we do not believe that
these proceedings and claims would reasonably be expected to have a material adverse effect on our financial position, results of
operations or cash flows.
13. Subsequent Events
We are not aware of any material subsequent events or transactions that have occurred that would require recognition in the
financial statements or disclosure in the notes to the financial statements.
F-23