TeleNav 2011 Annual Report Download - page 97

Table of Contents
TELENAV, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 lawsuit 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. On March 14, 2011, we answered the Traffic Information complaint asserting that the patent-in-suit is
not infringed and is invalid and unenforceable. 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.
On April 11, 2011, Walker Digital, LLC, or Walker Digital, filed a complaint against us and 13 other defendants in the United States
District Court for the District of Delaware (Case No. 1:11-CV-00309-SLR), alleging infringement of U.S. Patent No. 6,199,014, and seeking a
permanent injunction, damages and attorneys’ fees should judgment be found in favor of Walker Digital. On May 10, 2011, we filed an answer
denying the allegations. On June 30, 2011, Walker Digital dismissed its complaint against us without prejudice.
On September 2, 2010, a purported stockholder class action was filed by David Smith in the United States District Court for the Northern
District of California (Case No. 3:10-CV-03942-SC) against us, certain of our officers and directors, and certain of our underwriters for our
May 13, 2010 IPO, alleging violations of Sections 11 and 15 of the Securities Act. On March 21, 2011, plaintiff filed an amended complaint
purporting to be brought on behalf of all persons who acquired shares of our common stock pursuant to our IPO and alleging that we, certain of
our officers and directors, and certain of our underwriters for the IPO violated the Securities Act by issuing the Registration Statement and
Prospectus, which the plaintiff alleges contained material misstatements and omissions in violation of Sections 11, 12(a)(2) and 15 of the
Securities Act. The amended complaint sought class certification, compensatory damages, attorneys’ fees and costs, rescission or a rescissory
measure of damages, equitable and/or injunctive relief, and such other relief as the court may deem proper. We filed a motion to dismiss
plaintiff’s amended complaint on May 4, 2011. On June 2, 2011, following a successful mediation between the parties, the Court entered a
stipulation and order regarding settlement and staying all proceedings. A hearing to approve settlement of the case will be held in November
2011. The settlement will include a payment of $3.8 million to resolve all claims as to all defendants to the litigation. The entire settlement
amount will be paid by our insurance carrier. We do not anticipate any liability as a result of this matter.
On June 6, 2011, Qaxaz, LLC, or Qaxaz, filed a complaint against us and nine other defendants in the United States District Court for the
District of Delaware, Case No. 1:11-cv-00492-LPS, alleging infringement of U.S. Patent No. 7,917,285, and seeking a permanent injunction,
damages and attorneys’ fees should judgment be found in favor of Qaxaz. On July 29, 2011, we answered the Qaxaz complaint asserting that the
patent-in-suit is not infringed and is invalid and unenforceable. 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.
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