TeleNav 2015 Annual Report Download - page 105

Table of Contents
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 district court issued its claim construction ruling the parties agreed to focus on early summary judgment motions, the
defendants filed motions for summary judgment of noninfringement. On April 10, 2013 the district court granted AT&T and our motion for
summary judgment of noninfringement. Plaintiff appealed the district court's claim construction and summary judgment rulings to the U.S. Court
of Appeals for the Federal Circuit. On November 18, 2014, the U.S. Court of Appeals for the Federal Circuit reversed the district court's claim
construction and overturned the district court's grant of summary judgment of noninfringement. The case has been sent back to the U.S. District
Court for the District of Delaware and trial is currently scheduled for February 2017. 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, or Traffic Information, 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 U.S. Patent and Trademark Office or PTO, and the reexamined claims were found invalid. Plaintiff appealed this finding
and on May 30, 2013, the Patent Trial and Appeal Board, or PTAB, confirmed the invalidity of these claims. Plaintiff filed a request for
reconsideration of this decision with the PTAB, which was denied on January 13, 2014. Traffic Information filed an appeal with the U.S.
Appeals Court for the Federal Circuit, and on January 20, 2015, the court affirmed the PTO's finding of invalidity. On April 28, 2015, Traffic
Information filed a dismissal of all claims against us. On May 6, 2015, the District Court entered the dismissal.
On February 6, 2015, Location Services IP, LLC filed a complaint against AT&T, Inc. and Telenav, Inc. in the U.S. District Court for the
Eastern District of Texas, alleging that the AT&T Navigator, Telenav GPS Plus, and Telenav Scout Mobile applications infringe 4 U.S. patents.
On April 16, 2015, Location Services IP LLC dismissed all claims against AT&T, Inc. and Telenav, Inc. and filed a new complaint against
AT&T Mobility, AT&T Services, Inc. and Telenav, Inc. in the same court, alleging that the AT&T Navigator, Telenav GPS Plus, Telenav GPS
Navigator, and Telenav Scout Mobile applications as well as AT&T Store Locator and the myAT&T Mobile Application infringe the same
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U.S. patents. The complaint seeks unspecified monetary damages, fees and expenses and injunctive relief. AT&T has requested that we defend
and indemnify them in this matter as it relates to the AT&T Navigator product and we have agreed to do so. 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 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 complaint on our financial condition, results of
operations or cash flows.
In addition, we have received, and expect to continue to receive, demands for indemnification from our customers, which demands can be
very expensive to settle or defend, and we have in the past offered to contribute to settlement amounts and incurred legal fees in connection with
certain of these indemnity demands. A number of these indemnity demands, including demands relating to pending litigation, remain
outstanding and unresolved as of the date of this Form 10-K. Furthermore, in response to these demands we may be required to assume control
of and bear all costs associated with the defense of our customers in compliance with our contractual commitments. At this time, we are not a
party to the following cases; however our customers have requested that we indemnify them in connection with such cases:
In 2008, Alltel, AT&T, Sprint and T-Mobile USA, or T-Mobile, each demanded that we indemnify and defend them against patent
infringement lawsuits brought by patent holding companies EMSAT Advanced Geo-Location Technology LLC
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