TeleNav 2014 Annual Report Download - page 100

Table of Contents
6. Commitments and contingencies
Our primary facilities located in Sunnyvale and Culver City, California, Shanghai and Xi’an, China, and Cluj, Romania, as well as certain
other facilities in various locations in the United States, Germany and Brazil, are leased under noncancelable operating lease arrangements. As of
June 30, 2014 , future minimum operating lease payments, net of sublease income, by fiscal year were as follows (in thousands):
As of June 30, 2014, the total minimum sublease income to be received in the next two years was $2.5 million , which is comprised of
$1.4
million to be received in fiscal 2015, and $1.1 million to be received in fiscal 2016.
Rent expense was $4.1 million , $4.8 million and $4.9 million for fiscal 2014 , 2013 and 2012 , respectively. Facility exit costs included in
restructuring costs in fiscal 2014 and 2013 were $2.0 million and $124,000 , respectively.
Purchase obligations
As of June 30, 2014 , in addition to our lease obligations, we had an aggregate of $6.0 million of future minimum noncancelable financial
commitments primarily related to license fees due to certain of our third party content providers over the next two fiscal years. The aggregate of
$6.0 million of future minimum commitments is comprised of $4.4 million due in fiscal 2015 , $1.2 million due in fiscal 2016 , $286,000 due in
fiscal 2017 and $125,000 due in fiscal 2018. The above commitment amounts exclude amounts already recorded on the Consolidated Balance
Sheet.
Contingencies
From time to time, we may become involved in legal proceedings, claims and litigation arising in the ordinary course of business. When
we believe a loss or a cost of indemnification is probable and can be reasonably estimated, we accrue the estimated loss or cost of
indemnification in our consolidated financial statements. Where the outcome of these matters is not determinable, we do not make a provision in
our financial statements until the loss or cost of indemnification, if any, is probable and can be reasonably estimated or the outcome becomes
known. We expense legal fees related to these matters as they are incurred.
On December 31, 2009, Vehicle IP, LLC, or Vehicle IP, filed a patent infringement lawsuit against us in the U.S. District Court for the
District of Delaware, seeking monetary damages, fees and expenses and other relief. Verizon Wireless, or Verizon, 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
this time, we have not agreed to defend or indemnify Verizon. AT&T was also named as a co-defendant in the Vehicle IP litigation based on the
AT&T Navigator and Telenav Track products. AT&T has tendered the defense of the litigation to us and we are defending the case on behalf of
AT&T. After the Court issued its claim construction ruling the parties agreed to focus on early summary judgment motions, and asked the Court
to postpone the rest of the case schedule pending the resolution of these potentially case-dispositive motions. The defendants filed motions for
summary judgment of noninfringement. On April 10, 2013 the Court granted AT&T and our motion for summary judgment of noninfringement.
While the Court's ruling appears to be dispositive of plaintiff's claims, plaintiff is appealing the district court's claim construction and summary
judgment ruling. The appeal is currently ongoing in the U.S. Court of Appeals for the Federal Circuit; the oral argument was held on April 10,
2014. Due to the uncertainties related to litigation, we are unable to evaluate the likelihood of either a favorable or unfavorable outcome. We
believe that it is reasonably possible that we will incur a loss; however, 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 April 30, 2010, Traffic Information, LLC filed a patent infringement lawsuit against us in the U.S. District Court for the Eastern
District of Texas, seeking monetary damages, fees and expenses, and other relief. The patent at issue was subject to reexamination by the PTO
and the reexamined claims were found invalid. Plaintiff appealed this finding and on May 30, 2013,
F-18
Fiscal Year:
2015
$
4,760
2016
5,359
2017
5,118
2018
4,859
2019 and thereafter
6,976
Total minimum lease payments
$
27,072