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TELENAV, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
and Samsung infringe U.S. Patent Nos. 6,243,030 and 6,140,943 in connection with providing wireless
navigation systems, products and services. In March 2010, Sprint responded to the allegations, filing an answer
that the patents-in-suit are not infringed, are invalid and unenforceable. Alfred Levine subsequently denied these
counterclaims and requested that they be dismissed. The court has not yet set a schedule for the remainder of the
case but has set an initial scheduling conference for August 30, 2010. We agreed to indemnify and defend Sprint
against the lawsuit, with certain limitations, and we are presently negotiating the scope of our indemnification
obligations with Sprint. We cannot reasonably estimate to what extent we will indemnify Sprint or the potential
losses it and we may experience in connection with such litigation.
On April 30, 2010, Traffic Information, LLC filed a complaint against us in the U.S. District Court for the
Eastern District of Texas (Case No. 2:10-cv-00145-TJW). The suit alleges that certain of our products and/or
services infringe U.S. Patent No. 6,785,606, and that we induce infringement and contribute to the infringement
of U.S. Patent No. 6,785,606 by others. According to the patent, the invention generally relates to a system for
providing traffic information to a plurality of mobile users connected to a network. The complaint seeks
unspecified monetary damages, fees and expenses and injunctive relief against us. On May 28, 2010, Traffic
Information, LLC filed an amended complaint, adding a new claim that certain of our products and/or services
infringe U.S. Patent No. 6,466,862, and that we induce infringement and contribute to the infringement of U.S.
Patent No. 6,466,862 by others. According to the patent, the invention generally relates to a system for providing
traffic information to a plurality of mobile users connected to a network. The amended complaint seeks
unspecified monetary damages, fees and expenses and injunctive relief against us. 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. We cannot currently estimate a range of any possible losses we may experience in
connection with this case. Accordingly, we are unable at this time to estimate the effects of this complaint on our
financial condition, results of operations or cash flows.
While we presently believe that the ultimate outcome of these proceedings, individually and in the
aggregate, will not materially harm our financial position, cash flows or overall trends in results of operations,
legal proceedings are subject to inherent uncertainties and unfavorable rulings could occur. Were unfavorable
final outcomes to occur, there exists the possibility of a material adverse impact on our business, financial
position, cash flows or overall trends in results of operations.
5. Guarantees and indemnifications
Our agreements with our wireless carrier partners that offer our LBS generally include certain provisions for
indemnifying them against liabilities if our LBS infringe a third party’s intellectual property rights or for other
specified matters. We have in the past received indemnification requests or notices of their intent to seek
indemnification in the future from our wireless carrier partners with respect to specific litigation claims in which
our wireless carrier partners have been named as defendants. To date, we have not incurred material costs and do
not have material liabilities related to such obligations recorded in our consolidated financial statements.
We have agreed to indemnify our directors, officers and certain other employees for certain events or
occurrences, subject to certain limits, while such persons are or were serving at our request in such capacity. We
may terminate the indemnification agreements with these persons upon the termination of their services with us,
but termination will not affect claims for indemnification related to events occurring prior to the effective date of
termination. The maximum amount of potential future indemnification is unlimited. We have a directors and
officers insurance policy that limits our potential exposure. We believe the fair value of these indemnification
agreements is minimal. We had not recorded any liabilities for these agreements as of June 30, 2010 and 2009.
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