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Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2014
Commitments and Contingencies [Abstract] |
Commitments and Contingencies |
8. | Commitments and Contingencies
In October 2011, the Company initiated litigation against Coupons.com Incorporated (Coupons.com) alleging, among other things, that Coupons.com misused certain of the Company's proprietary technology in violation of the terms of a nondisclosure agreement between the parties. On July 10, 2014 the US District Court for the Western District of New York heard oral arguments in connection with Coupons.com's motion for Summary Judgment, and on October 28, 2014, Coupons.com's motion was granted and the case was dismissed. The Company may appeal the District Court's decision. In October 2012, Bascom Research, a subsidiary of Lexington Technology Group, Inc. (LTG), now known as DSS Technology Management, Inc., acquired by the Company in July 2013, initiated litigation with Facebook, Inc., LinkedIn Corporation and three other defendants in the US District Court for the Eastern District of Virginia. The complaint alleged infringement by the defendants of four patents that are instrumental to social and business networking technology and related to the manner in which users and application developers on the Facebook and LinkedIn platforms make connections between “objects” such as photos, people, events and pages. In January 2013, all five cases were transferred to the US District Court for the Northern District of California. In April and May of 2013, LTG announced that Bascom Research had reached settlements with two of the named defendants. Currently, Facebook and LinkedIn remain as defendants in the litigation. On May 22, 2014, Facebook, Inc. filed a Petition for Covered Business Method (CBM) Patent Review with the USPTO's Patent Trial and Appeal Board (PTAB). On September 3, 2014, Bascom Research filed a preliminary response to the CBM petition, and a decision by the PTAB on whether or not to institute the CBM proceeding should be delivered within 90 days following the petition, or about December 2, 2014. On August 30, 2014, the parties held a case management conference that set dates for a hearing to address Facebook's motion for summary judgment, which alleges that the Bascom Research patents are invalid under the patent-eligibility (section 101) standard established in Alice Corp v. CLS Bank International , and for the claims construction (Markman) hearing. The Summary Judgment hearing will take place on November 21, 2014, and the Markman hearing is scheduled for February 26, 2015. On November 29, 2013, DSS Technology Management, Inc. (DSSTM) initiated litigation against Apple, Inc. (Apple) in the US District Court for the Eastern District of Texas. DSSTM's complaint alleges infringement by Apple of DSSTM patents that relate to systems and methods of using low power wireless peripheral devices. A Markman hearing in DSSTM's litigation with Apple in the Eastern District of Texas had been scheduled for November 6, 2014. On October 28, 2014 the case was stayed pending a determination of Apple's motion to transfer the case to the Northern District of California, which had been submitted on March 3, 2014. On November 7, 2014, the Company learned that Apple's motion to transfer was granted. DSSTM anticipates that this Markman hearing will now take place following the completion of the transfer of the case to the Northern District of California. On March 10, 2014, DSS Technology Management, Inc. (DSSTM) initiated litigation with Taiwan Semiconductor Manufacturing Company, Ltd. (TSMC), Samsung Electronics Co. Inc., and NEC Corporation of America in the US District Court for the Eastern District of Texas. DSSTM's complaint against these companies alleges infringement of DSS patents relating to a semiconductor manufacturing process called “double-patterning.” On June 24, 2014, TSMC filed a petition for Inter Partes Review (IPR) with the USPTO Patent Trial and Appeal Board, and DSSTM filed its preliminary response to that petition on October 17, 2014. On November 3, 2014, TSMC filed a motion to transfer its case to the Northern District of California. A decision has not yet been rendered by the District Court for this motion. On May 30, 2014, DSS Technology Management filed suit in the United States District Court for the Eastern District of Texas against Lenovo (United States), Inc. for patent infringement of a patent owned by DSS Technology Management in the wireless peripheral technology space. DSS Technology Management is seeking a judgment for infringement, injunctive relief, and compensatory damages from Lenovo (United States), Inc. The case is currently in the pleadings stage. In addition to the foregoing, the Company is subject to other legal proceedings that have arisen in the ordinary course of business and have not been finally adjudicated. Although there can be no assurance in this regard, in the opinion of management, none of the legal proceedings to which the Company is a party, whether discussed herein or otherwise, will have a material adverse effect on its results of operations, cash flows or financial condition. Contingent Litigation Payments – The Company retains the services of professional service providers, including law firms that specialize in intellectual property licensing, enforcement and patent law. These service providers are often retained on an hourly, monthly, project, contingent or a blended fee basis. In contingency fee arrangements, a portion of the legal fee is based on predetermined milestones or the Company's actual collection of funds. The Company accrues contingent fees when it is probable that the milestones will be achieved and the fees can be reasonably estimated. As of September 30, 2014, the Company has not accrued any contingent legal fees pursuant to these arrangements. Contingent Payments – The Company is party to certain agreements with funding partners who have rights to portions of IP monetization proceeds that the Company receives. Related Party Consulting Payments – The Company has a consulting agreement with Patrick White, its former CEO. During the nine months ended September 30, 2014, the Company paid approximately $112,000 to Mr. White and expects to pay approximately $68,000 in future monthly payments through the expiration of the agreement in March 2015. Company paid approximately $139,000 during nine months ended September 30, 2013.

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