Symantec 2001 Annual Report Download - page 53

Note 15. Litigation
On December 23, 1999,Altiris Inc. (“Altiris”) filed a lawsuit in the
United States District Court, District of Utah, against us, alleging that
unspecified Symantec products including Norton Ghost Enterprise
Edition, infringed a patent owned by Altiris. The lawsuit requests
damages, injunctive relief, costs and attorney fees.We believe this claim
has no merit and we intend to defend the action vigorously.
On May 12, 1999, a venture capital entity and a former stockholder
owning less than a majority share of CKS Limited, which AXENT
acquired in March 1999, commenced an action in the Suffolk County
Superior Court in Boston, Massachusetts against AXENT and its
directors. The action alleges violations of the Massachusetts Uniform
Securities Act, negligent misrepresentations and unfair trade practices.
We inherited this case upon our acquisition of AXENT. We believe the
claims are without merit and intend to vigorously defend the action.
In July 1998, the Ontario Court of Justice (General Division) ruled
that we should pay a total of approximately $6.8 million for damages
and legal costs to Triolet Systems, Inc. and Brian Duncombe in a
decade-old copyright action, for damages arising from the grant of a
preliminary injunction against the defendant. The damages were
awarded following the court’s ruling that evidence presented later in
the case showed the injunction was not warranted. We inherited this
case through our acquisition of Delrina Corporation, which was the
plaintiff in this lawsuit. We have appealed the decision; however, we
recorded a charge of approximately $5.8 million in the June 1998
quarter, representing the unaccrued portion of the judgment plus
costs. As of March 31, 2001, we believe that we have adequately
accrued for both the judgment and all legal costs.
On February 19, 1998, a class action complaint was filed by the law
firm of Milberg, Weiss, Bershad, Hynes & Lerach in Santa Clara
County Superior Court, on behalf of a class of purchasers of pre-
version 4.0 Norton AntiVirus products. A similar complaint was filed
in the same court on March 6, 1998, by an Oregon law firm. Those
actions were consolidated and a consolidated amended complaint
was filed in late October 1998. The complaint originally purported to
assert claims for breach of implied warranty, fraud, unfair business
practices and violation of California’s Consumer Legal Remedies Act,
among others, arising from the alleged inability of earlier versions of
Norton AntiVirus to function properly after the year 2000. All but the
unfair business practice claims were dismissed following our demurrer.
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In December 2000, the unfair business practice claims were dismissed,
and the case was resolved with no material financial impact on us.
In October 1997, a complaint was filed in the United States District
Court for the District of Utah on behalf of PowerQuest Corporation
(“PowerQuest”) against Quarterdeck. The complaint alleges that
Quarterdeck’s partitioning software included in Partition-It and
Partition-It Extra Strength violates a patent held by PowerQuest.
In January 1998, PowerQuest obtained a second patent relating to
partitioning and has amended its complaint to allege infringement
of that patent as well. The plaintiff seeks an injunction against distri-
bution of Partition-It and Partition-It Extra Strength and monetary
damages. We believe this claim has no merit and we intend to defend
the action vigorously.
On September 15, 1997, Hilgraeve Corporation (“Hilgraeve”) filed a
lawsuit in the United States District Court, Eastern District of
Michigan, against us, alleging that unspecified Symantec products
infringe a patent owned by Hilgraeve. The lawsuit requested damages,
injunctive relief, costs and attorney fees. In March 2000, the court
granted our summary judgment motions and dismissed the case.
The plaintiff has appealed the dismissal and we have cross-appealed.
A hearing on the appeals took place in May 2001, but no decision has
been issued.
Over the past few years, it has become common for software compa-
nies, including us, to receive claims of patent infringement. We are
currently evaluating claims of patent infringement asserted by several
parties, with respect to certain of our products.While we believe that
we have valid defenses to these claims, the outcome of any related liti-
gation or negotiation could have a material adverse impact on our
future results of operations or cash flows.
We are also involved in a number of other judicial and administrative
proceedings incidental to our business. We intend to defend all of the
aforementioned pending lawsuits vigorously and although adverse
decisions (or settlements) may occur in one or more of the cases, the
final resolution of these lawsuits, individually or in the aggregate, is not
expected to have a material adverse affect on our financial condition,
although it is not possible to estimate the possible loss or losses from
each of these cases. Depending, however, on the amount and timing of
an unfavorable resolution of these lawsuits, it is possible that our
Note 14. Other Comprehensive Loss
The components of other comprehensive loss, net of tax, were as follows:
Year Ended March 31
(In thousands) 2001 2000 1999
Other comprehensive loss:
Change in unrealized gain (loss) on available-for-sale investments, net of a tax provision (benefit)
of $1,406, ($974) and ($217). $ 2,987 $ (2,069) $ (461)
Change in cumulative translation adjustment, net of a tax (benefit) of ($11,366),
($3,072) and ($1,476). (24,152) (6,528) (6,090)
Total other comprehensive loss $ (21,165) $ (8,597) $ (6,551)
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