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Commitments and Contingencies | 6 Months Ended
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Jan. 31, 2020
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Non-cancelable Purchase Obligations In the normal course of business, we enter into non-cancelable purchase commitments with various parties to purchase products and services such as technology equipment, subscription-based cloud service arrangements, corporate events and consulting services. As of January 31, 2020, and July 31, 2019, we had outstanding non-cancelable purchase obligations with a term of 12 months or longer of $7.0 million and $2.5 million, respectively. Legal Matters Symantec Litigation On December 12, 2016 and April 18, 2017, Symantec Corporation ("Symantec") filed two separate complaints in the U.S. District Court for the District of Delaware, alleging that "Zscaler's cloud security platform" infringed multiple U.S. patents held by Symantec (the "Symantec Cases"). The complaints in the Symantec Cases sought compensatory damages, injunctions, enhanced damages and attorney fees. In July and August 2017, the Symantec Cases were transferred to the U.S. District Court for the Northern District of California. On November 4, 2019, Broadcom, Inc. ("Broadcom") announced the completion of its acquisition of certain assets and assumption of certain liabilities of Symantec's enterprise security business, including all rights, titles, and interests in the patents asserted in the Symantec Cases. On January 12, 2020, we entered into a settlement and patent license agreement with CA, Inc., a Broadcom affiliate, pursuant to which the Symantec Cases were dismissed with prejudice effective as of January 13, 2020. In connection with the settlement, we made a payment of $15.0 million to Broadcom, and Broadcom provided us with patent licenses, a release and a covenant not to sue. We determined that there is no material future economic benefit from the acquired Broadcom license and accordingly, we recorded an expense of $15.0 million within general and administrative expenses in the consolidated statement of operations for the quarter ended January 31, 2020. Finjan Litigation As further disclosed in our Annual Report on Form 10-K for the fiscal year ended July 31, 2019, in April 2019 we entered into a patent license and settlement agreements with Finjan, Inc. and its affiliates (collectively "Finjan"), resolving all claims alleged by Finjan in the complaint filed on December 5, 2017. The settlement agreements required us to make a cash payment to Finjan for $7.3 million, of which $4.1 million was accrued in the three months ended April 30, 2019, $0.7 million in fiscal 2018 and $2.5 million in fiscal 2017. Other Litigation and Claims In addition, from time to time we are a party to various litigation matters and subject to claims that arise in the ordinary course of business, including patent, commercial, product liability, employment, class action, whistleblower and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. In addition, third parties may from time to time assert claims against us in the form of letters and other communications. Except as otherwise described above, there is no pending or threatened legal proceeding to which we are a party that, in our opinion, is likely to have a material adverse effect on our future financial results or operations; however, the results of litigation and claims are inherently unpredictable. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. The expense of litigation and the timing of this expense from period to period are difficult to estimate, subject to change and could adversely affect our results of operations.

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