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WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Seagate disputes the method the Company used for calculating post-award interest and contends that the Com-
pany owes Seagate approximately $29 million in additional interest. The Company denies Seagate’s contention and
believes it calculated interest properly in accordance with the arbitration award. On November 12, 2014, the Com-
pany filed a motion with the District Court seeking an order declaring that WD has paid to Seagate all amounts due
under the arbitration award, including all pre-award and post-award interest, and all costs and disbursements assessed
by the Minnesota Court of Appeals and the Minnesota Supreme Court. On December 23, 2014, Seagate filed a cross-
motion seeking entry of judgment in the amount of $29 million, plus daily interest from October 15, 2014 until the
date any judgment is paid. Both parties’ motions were fully briefed and, on January 9, 2015, the District Court heard
oral argument on both motions. On April 7, 2015, the District Court granted the Company’s motion and declared
that all amounts due and owing from the Company to Seagate have been paid, and a corresponding judgment was
entered on April 8, 2015. On May 6, 2015, Seagate appealed the decision and judgment to the Minnesota Court of
Appeals. The matter has been fully briefed before the Minnesota Court of Appeals but a date for oral argument has not
been set. The Company will continue to defend itself vigorously in this matter.
Other Matters
On December 22, 2011, the German Central Organization for Private Copying Rights (Zentralstelle für private
Überspielungsrechte), (“ZPÜ”), an organization consisting of several copyright collecting societies, instituted arbi-
tration proceedings against Western Digital’s German subsidiary (“WD Germany”) before the Copyright Arbitration
Board (“CAB”) claiming copyright levies for multimedia hard drives, external hard drives and network hard drives
sold or introduced into commerce in Germany by WD Germany from January 2008 through December 2010. The
CAB, which was required to issue a settlement proposal within one year of the initiation of the action, failed to do so
and requested the parties consent to continue the deadline. WD Germany declined to provide consent and, on Febru-
ary 1, 2013, WD Germany filed a declaratory relief action against ZPÜ in the Higher Regional Court of Munich (the
“Higher Court”), seeking an order from the court to determine the copyright levy issue. On May 21, 2013, ZPÜ filed
a counter-claim against WD Germany with the Higher Court, seeking copyright levies for multimedia hard drives,
external hard drives and network hard drives (collectively, “Covered Products”) sold or introduced into commerce
from January 2008 through December 2010 based on tariffs published by ZPÜ on November 3, 2011. On May 22,
2014, oral argument on the pleadings occurred. On January 15, 2015, the Higher Court ruled in favor of ZPÜ. In its
ruling, the Higher Court declared that WD Germany must pay certain levies on certain WD products which it sold in
Germany between January 1, 2008 and December 31, 2010. The judgment specifies levy amounts on certain WD
products sold from 2008 to 2010 and directs WD Germany to provide applicable sales data to the ZPÜ. The exact
amount of the judgment has not been determined. ZPÜ and WD Germany filed appeals with the German Federal
Court of Justice on February 18 and February 20, 2015. WD intends to defend itself vigorously in this matter.
On December 11, 2014, ZPÜ submitted a pleading to the CAB seeking copyright levies for multimedia hard
drives, external hard drives and network hard drives sold or introduced into commerce in Germany by WD Germany
from January 1, 2012 to December 31, 2013. WD intends to defend itself vigorously in this matter.
The Company has recorded an accrual for German copyright levies in an amount that is not material to the
Company’s financial position, results of operations or cash flows. It is reasonably possible that the Company may incur
losses totaling up to $95 million, including the amounts accrued.
In the normal course of business, the Company is subject to other legal proceedings, lawsuits and other claims.
Although the ultimate aggregate amount of probable monetary liability or financial impact with respect to these
other matters is subject to many uncertainties and is therefore not predictable with assurance, management believes
that any monetary liability or financial impact to the Company from these other matters, individually and in the
aggregate, would not be material to the Company’s financial condition, results of operations or cash flows. However,
there can be no assurance with respect to such result, and monetary liability or financial impact to the Company from
these other matters could differ materially from those projected.
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