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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2017
Commitments And Contingencies Disclosure [Abstract] |
Commitments and Contingencies | (9) Commitments and Contingencies (a) Commitments From time to time, the Company enters into certain types of contracts that require it to indemnify parties against third-party claims. These contracts primarily relate to agreements under which the Company assumes indemnity obligations for intellectual property infringement, as well as other obligations from time to time depending on arrangements negotiated with customers and other third parties. The conditions of these obligations vary. Thus, the overall maximum amount of the Company’s indemnification obligations cannot be reasonably estimated. Historically, the Company has not been obligated to make significant payments for these obligations and does not currently expect to incur any material obligations in the future. Accordingly, the Company has not recorded an indemnification liability on its balance sheets as of December 31, 2017 or December 31, 2016. The Company leases office space and computer and other equipment under operating lease agreements. Under the lease agreements, in addition to base rent, the Company is generally responsible for certain taxes, utilities and maintenance costs, and other fees. Several of these leases include options for renewal or purchase. The Company does not have any material capital leases. As of December 31, 2017, the Company leased approximately 214,000 square feet of office space at a location in Northern Virginia that began serving as its corporate headquarters in October 2010 and was to expire in December 2020. In January 2018, the Company amended the lease to extend the lease term through December 2030. See Note 17, Subsequent Events, to the Consolidated Financial Statements for further information. At December 31, 2017 and 2016, deferred rent of $8.5 million and $12.3 million, respectively, was included in other long-term liabilities and $3.8 million and $3.5 million, respectively, was included in current accrued expenses. As a result of the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”), the Company estimated and recorded a one-time $40.3 million tax expense related to the mandatory deemed repatriation transition tax (“Transition Tax”) during the year ended December 31, 2017. See Note 10, Income Taxes, to the Consolidated Financial Statement for further information. At December 31, 2017, $36.8 million of the Transition Tax was included in “other long-term liabilities” and $3.5 million was netted against “prepaid expenses and other current assets” in the Company’s Consolidated Balance Sheets. The following table shows future minimum rent payments under noncancellable operating leases and agreements with initial terms of greater than one year, net of total future minimum rent payments to be received under noncancellable sublease agreements, and anticipated payments related to the one-time Transition Tax resulting from the Tax Act, based on the expected due dates of the various installments as of December 31, 2017 (in thousands):
|  | Operating Leases |  |  | Transition Tax |
Year |  | Amount |  |  | Amount |
2018 |  | $ | 24,508 |  |  | $ | 3,450 |
2019 |  |  | 20,059 |  |  |  | 3,200 |
2020 |  |  | 18,779 |  |  |  | 3,200 |
2021 |  |  | 2,610 |  |  |  | 3,200 |
2022 |  |  | 1,758 |  |  |  | 3,200 |
Thereafter |  |  | 4,276 |  |  |  | 24,000 |
|  | $ | 71,990 |  |  | $ | 40,250 |
The above table does not include estimated payments related to the renewal of our corporate headquarters office lease in January 2018. See Note 17, Subsequent Events, to the Consolidated Financial Statements for further information about our corporate headquarters office lease. Total rental expenses under operating lease agreements for the years ended December 31, 2017, 2016, and 2015 were $19.8 million, $20.3 million, and $22.6 million, respectively. (b) Contingencies In December 2011, DataTern, Inc. (“DataTern”) filed a complaint for patent infringement against the Company in the United States District Court for the District of Massachusetts (the “District Court”). The complaint alleged that the Company infringes U.S. Patent No. 6,101,502 (the “’502 Patent”), allegedly owned by DataTern, by making, selling, or offering for sale several of the Company’s products and services, including MicroStrategy 9, MicroStrategy Intelligence Server, MicroStrategy Business Intelligence Platform, MicroStrategy Cloud Personal, and other MicroStrategy applications for creating or using data mining, dashboards, business analytics, data storage and warehousing, and web hosting support. The complaint accused the Company of willful infringement and sought an unspecified amount of damages, an award of attorneys’ fees, and preliminary and permanent injunctive relief. In light of a judgment in a separate action involving DataTern in another jurisdiction, in February 2013, MicroStrategy and DataTern filed motions for summary judgment of non-infringement and the District Court entered summary judgment against DataTern. In March 2013, DataTern filed a notice of appeal with the United States Court of Appeals for the Federal Circuit (the “Federal Circuit”). In December 2014, the Federal Circuit issued an opinion vacating the District Court’s summary judgment, stating that the claim construction on which the summary judgment was based was incorrect. In January 2015, the case was remanded to the District Court for further proceedings. A claim construction ruling was issued in February 2017. In August 2017, counsel for DataTern filed a motion to withdraw from the lawsuit. The District Court initially gave DataTern a deadline of September 18, 2017 to find replacement counsel, which was later extended to October 20, 2017. On October 20, 2017, the District Court dismissed the case for failure to prosecute when DataTern failed to identify substitute counsel. The Company has received indemnification requests from certain of its channel partners and customers who were sued by DataTern in the District Court in lawsuits alleging infringement of the ‘502 Patent. The proceedings against these channel partners and customers were stayed pending the resolution of DataTern’s lawsuit against the Company. On October 30, 2017, the District Court dismissed with prejudice these channel partner and customer proceedings. No estimated liability for these matters has been accrued in the accompanying Consolidated Financial Statements. The Company is also involved in various other legal proceedings arising in the normal course of business. Although the outcomes of these other legal proceedings are inherently difficult to predict, management does not expect the resolution of these other legal proceedings to have a material adverse effect on the Company’s financial position, results of operations, or cash flows. The Company has contingent liabilities that, in management’s judgment, are not probable of assertion. If such unasserted contingent liabilities were to be asserted, or become probable of assertion, the Company may be required to record significant expenses and liabilities in the period in which these liabilities are asserted or become probable of assertion.

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- Definition The entire disclosure for commitments and contingencies. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -URI http://asc.fasb.org/topic&trid=2127136 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -URI http://asc.fasb.org/topic&trid=2144648 + Details
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