TeleNav 2010 Annual Report Download - page 89

Download and view the complete annual report

Please find page 89 of the 2010 TeleNav annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 109

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109

TELENAV, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
system and method for providing navigation and automated guidance to a mobile user. The complaint seeks
unspecified monetary damages, fees and expenses and injunctive relief against us. On November 27, 2009,
WRE-Hol served the complaint on us. On January 25, 2010, we answered the WRE-Hol complaint asserting that
the patent-in-suit is not infringed and is invalid and unenforceable. On March 11, 2010, WRE-Hol amended its
complaint to add a new defendant, and we subsequently answered, repeating our assertions that the patent-in-suit
is not infringed and is invalid and unenforceable. On April 27, 2010, we filed a reexamination request for all of
the claims of the asserted patent before the U.S. Patent and Trademark Office. On April 29, 2010, we filed a
motion to stay the litigation pending the reexamination. On May 3, 2010, WRE-Hol filed a motion for leave to
amend the complaint against us, seeking to add claims for misappropriation of trade secrets against us and our
founders, Y.C. Chao, H.P. Jin and Robert Rennard. WRE-Hol’s motion for leave to amend also seeks to add a
breach of contract claim against us and a claim for wrongful inventorship involving two of our patents,
requesting a declaratory judgment that a WRE-Hol inventor be named as an inventor on those patents. On
July 19, 2010, the U.S. Patent and Trademark Office issued an order granting inter partes reexamination of all 51
claims of the WRE-Hol ‘625 patent. On July 23, 2010, the district court issued an order granting WRE-Hol’s
motion for leave to amend its complaint, but at the same time stayed the entire litigation pending completion of
the reexamination. The stay of the litigation extends to the new claims the court allowed. Accordingly, we are
unable at this time to estimate the effects of this complaint on our financial condition, results of operations or
cash flows.
On December 31, 2009, Vehicle IP, LLC filed a complaint against us in the U.S. District Court for the
District of Delaware (Case No. 1:09-cv-01007-JJF). The suit alleges that certain of our navigation services,
including TeleNav GPS Navigator, infringe U.S. Patent No. 5,987,377, and that we induce infringement and
contribute to the infringement of U.S. Patent No. 5,987,377 by others. According to the patent, the invention
generally relates to a navigation system that determines an expected time of arrival. The complaint seeks
unspecified monetary damages, fees and expenses and injunctive relief against us. On March 11, 2010, we
answered the complaint, asserting that the patent-in-suit is not infringed and is invalid. Vehicle IP denied these
counterclaims and requested that they be dismissed. Verizon Wireless was named as a co-defendant in the
Vehicle IP litigation based on the VZ Navigator product and has demanded that we indemnify and defend
Verizon against Vehicle IP. AT&T Mobility was also named as a co-defendant in the Vehicle IP litigation based
on the AT&T Navigator product. AT&T Mobility has tendered the defense of the litigation to us and we are
defending the case on behalf of AT&T Mobility. The court has not yet ordered a scheduling conference for the
litigation. Due to the preliminary status of the lawsuit and uncertainties related to litigation, we are unable to
evaluate the likelihood of either a favorable or unfavorable outcome. Accordingly, we are unable at this time to
estimate the effects of this lawsuit on our financial condition, results of operations, or cash flows.
In March and May 2009, AT&T and Sprint demanded that we indemnify and defend them against a lawsuit
brought by Tendler Cellular of Texas LLC in the Eastern District of Texas (Case No. 6:09-cv-0115) alleging that
the wireless carriers infringe U.S. Patent No. 7,447,508 in connection with the delivery of certain LBS as part of
their wireless telephone services and seeking unspecified damages. Tendler Cellular of Texas is a patent holding
company. In May 2009, AT&T responded to the allegations, filing an answer that the patent-in-suit is not
infringed, is invalid and unenforceable. In June 2009, Sprint did the same. In June 2010, AT&T settled its claims
with Tendler and we came to an agreement with AT&T as to the extent of our contribution towards AT&T’s
settlement. In July 2010, Sprint settled its claims with Tendler. We have resolved the amount of our contribution
towards Sprint’s settlement amount with Sprint, but we continue to discuss some ancillary issues with Sprint to
bring this matter to a close. These settlement amounts were accrued in our consolidated financial statements as of
June 30, 2010.
In February 2010, Sprint demanded that we indemnify and defend them against a lawsuit brought by
Alfred P. Levine, an individual, in the Eastern District of Texas (Case No. 2:09-cv-00372) alleging that Sprint
86