TeleNav 2011 Annual Report Download - page 96

Table of Contents
TELENAV, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
On November 17, 2009, WRE-Hol, LLC, or WRE-Hol, filed a complaint against us in the U.S. District Court for the Western District of
Washington (Case No. 2:09-cv-01642-MJP). The lawsuit alleges that certain of our products and/or services infringe U.S. Patent No. 7,149,625,
and that we induce infringement and contribute to the infringement of U.S. Patent No. 7,149,625 by others. According to the patent, the
invention generally relates to a 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, HP 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 these 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. On September 13, 2010, the U.S. Patent
and Trademark Office rejected 44 of the 51 WRE-Hol patent claims in a non-final first office action and confirmed seven of the 51 claims. On
November 15, 2010, WRE
-Hol responded to the office action, canceling some claims and adding others. On December 15, 2010, TeleNav
responded to the office action and WRE-Hol’s response. On April 4, 2011, the U.S. Patent and Trademark Office rejected WRE-Hol’s
November 15, 2010 office action response, and gave WRE
-Hol 30 days to file a corrected response. WRE-Hol filed its corrected response on
May 4, 2011. TeleNav responded to WRE-Hol’s filing on June 2, 2011. The next step will be a second office action from the Patent Office,
which is expected within the next four months. 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 lawsuit on our financial condition,
results of operations, or cash flows.
On December 31, 2009, Vehicle IP, LLC, or Vehicle IP, filed a complaint against us in the U.S. District Court for the District of Delaware
(Case No. 1:09-cv-01007-JJF). The plaintiff alleges that certain of our services, including our GPS Navigator and TeleNav Track, 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. 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 was also named as a co-
defendant in the Vehicle IP litigation based on the AT&T Navigator product. AT&T has tendered the defense of the litigation to us and we are
defending the case on behalf of AT&T. The court conducted a scheduling conference for the litigation on February 7, 2011 and set a jury trial
date for November 5, 2012. The parties are engaged in fact discovery, which has a cutoff date of April 5, 2012. The court will hold a claim
construction hearing on October 24, 2011. We are developing our non-infringement and invalidity defenses in preparation for the case
dispositive motions. The parties are to submit case dispositive motions by May 18, 2012. Due to the 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 lawsuit on our financial
condition, results of operations, or cash flows.
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