Commitments and Contingencies
|9 Months Ended
Sep. 30, 2019
|Commitments and Contingencies Disclosure [Abstract]
|Commitments and Contingencies
|Commitments and Contingencies
Inventory Purchase and Other Contractual Obligations
As of September 30, 2019, future minimum payments under inventory purchase and other obligations are as follows:
Other obligations consist of contractual payments due for software licenses.
As disclosed in the Annual Report, the Company was a defendant in patent litigation originally filed by CrestaTech Technology Corporation, or CrestaTech. On January 21, 2014, CrestaTech filed a complaint for patent infringement against the Company in the United States District Court of Delaware, or District Court Litigation, alleging that the Company infringed U.S. Patent Nos. 7,075,585, or the '585 Patent and 7,265,792, or the '792 Patent. In addition to asking for compensatory damages, CrestaTech alleged willful infringement and sought a permanent injunction. CrestaTech also named Sharp Corporation, Sharp Electronics Corp. and VIZIO, Inc. as defendants based upon their alleged use of the Company's television tuners. Following the litigation history described in the Company's prior filings on Form 10-K and Form 10-Q, the District Court dismissed the District Court Litigation in April 2018. While the successor plaintiff following a Chapter 7 bankruptcy proceeding of CrestaTech below has suggested that the dismissal may have been in error, it has taken no action to re-instate the case. In the related bankruptcy proceeding, the plaintiff stated that it “no longer has any valid patent claims that it is asserting in any of the proceedings purchased through the Sale Agreement,” which includes the District Court Litigation against the Company in re Cresta Technology Corporation, Case No. 16-50808 (N.D. Cal. Bank. 2016) at Dkt. No. 270. At this time, the Company cannot predict whether the District Court litigation will be re-instated. In addition, outside the District Court Litigation, the Company is continuing to dispute certain matters relating to the ‘585 Patent through the inter parties review (IPR) and appeal process. The successor to CrestaTech recently withdrew from the one remaining appeal. The Company is waiting to see whether the U.S.
Patent and Trademark Office intervenes in that appeal. Any re-instatement of the District Court Litigation, material expenses associated with the IPR and appeal process, or other costs arising from the dispute between the parties could adversely affect the Company's operating results.
Trango Systems, Inc. Litigation
On or about August 2, 2016, Trango Systems, Inc., or Trango, filed a complaint in the Superior Court of California, County of San Diego, Central Division, against defendants Broadcom Corporation, Inc., or Broadcom, and the Company, collectively, Defendants. Trango is a purchaser that alleges various fraud, breach of contract, and interference with economic relations claims in connection with the discontinuance of a chip line the Company acquired from Broadcom in 2016. For additional information regarding this lawsuit, see Part I, Item 3, “Legal Proceedings” included in the Company's Annual Report. The parties entered into a settlement agreement and on June 6, 2019 the case was dismissed with prejudice. The terms of the settlement are confidential, and the settlement did not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
In addition, from time to time, the Company is subject to threats of litigation or actual litigation in the ordinary course of business, some of which may be material. Other than the CrestaTech litigation described above, the Company believes that there are no other currently pending litigation matters that, if determined adversely to the Company's interests, would have a material effect on the Company's financial position, results of operations, or cash flows or that would not be covered by the Company's existing liability insurance.