HP 2006 Annual Report Download - page 135

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Consolidated Statements of Earnings (Continued)
Note 17: Litigation and Contingencies (Continued)
The lawsuit alleges that HP and other companies helped perpetuate, profited from, and otherwise
aided and abetted the apartheid regime during the period from 1948-1994 by selling products and
services to agencies of the South African government. Claims are based on the Alien Tort Claims Act,
the Torture Victims Protection Act, the Racketeer Influenced and Corrupt Organizations Act and state
law. The complaint seeks, among other things, an accounting, the creation of a historic commission,
compensatory damages in excess of $200 billion, punitive damages in excess of $200 billion, costs and
attorneys’ fees. On November 29, 2004, the court dismissed with prejudice the plaintiffs’ complaint. In
May 2005, the plaintiffs filed an amended notice of appeal in the United States Court of Appeals for
the Second Circuit. On January 24, 2006, the Second Circuit Court of Appeals heard oral argument on
the plaintiffs’ appeal but has not yet issued a decision.
CSIRO Patent Litigation. Microsoft Corporation, Hewlett-Packard Company, et al. v. Commonwealth
Scientific and Industrial Research Organisation of Australia is an action filed by HP and two other
plaintiffs on May 9, 2005 in the District Court for the Northern District of California seeking a
declaratory judgment against Commonwealth Scientific and Industrial Research Organisation of
Australia (‘‘CSIRO’’) that HP’s products employing the IEEE 802.11a and 8.02.11g wireless protocol
standards do not infringe CSIRO’s US patent no. 5,487,069 relating to wireless transmission of data at
frequencies in excess of 10GHz. On September 22, 2005, CSIRO filed an answer and counterclaims
alleging that all HP products which employ those wireless protocol standards infringe the CSIRO
patent and seeking damages, including enhanced damages and attorneys fees and costs, and an
injunction against sales of infringing products. On December 12, 2006, CSIRO successfully moved to
have the case transferred to the District Court of the Eastern District of Texas, a court that has granted
CSIRO’s motions for summary judgment on the issues of validity and patent infringement in a patent
infringement action brought by CSIRO against a third party vendor of wireless networking products
based on the same patent.
Leak Investigation Proceedings. As described below, HP is the subject of various governmental
inquiries concerning the processes employed in an investigation into leaks of HP confidential
information to members of the media:
• In August 2006, HP was informally contacted by the Attorney General of the State of California
requesting information concerning the processes employed in the leak investigation.
• Beginning in September 2006, HP has received requests from the Committee on Energy and
Commerce of the U.S. House of Representatives (the ‘‘Committee’’) for records and information
concerning the leak investigation, securities transactions by HP officers and directors, including
an August 25, 2006 securities transaction by Mark Hurd, HP’s Chairman and Chief Executive
Officer, and related matters. HP has responded and is continuing to respond to those requests.
In addition, Mr. Hurd voluntarily gave testimony before the Committee regarding the leak
investigation on September 28, 2006.
• In September 2006, HP was informally contacted by the United States Attorney’s Office for the
Northern District of California requesting similar information concerning the processes
employed in the leak investigation. HP is responding to that request.
• Beginning in September 2006, HP has received requests from the Division of Enforcement of
the Securities and Exchange Commission for records and information and interviews with
current and former HP directors and officers relating to the leak investigation, the resignation of
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