| LEGAL PROCEEDINGS |
NOTE
J – LEGAL PROCEEDINGS
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[1] |
On
September 8, 2025, the Company’s wholly-owned subsidiary, HFT Solutions, LLC, commenced
patent litigation against Optiver US LLC and Optiver Trading US LLC in the United States
District Court for the Western District of Texas for infringement of certain patents within
the Company’s HFT Patent Portfolio. On November 21, 2025, the Optiver defendants filed
their answer and counterclaims of non-infringement and invalidity of the asserted patents.
A trial date has been scheduled for June 7, 2027. |
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[2] |
On
June 27, 2025, the Company commenced patent litigation against Samsung Electronics Co., LTD
and Samsung Electronics America, Inc. (collectively, “Samsung”) in the United
States District Court for the Eastern District of Texas, Marshall Division, for infringement
of six patents within the Company’s M2M/IoT Patent Portfolio. The lawsuit alleges
that Samsung infringes the Company patents by supporting certain eSIM (embedded Subscriber
Identification Module) and certain 5G technologies in its mobile devices, including its Galaxy
smartphones, watches and tablets. A trial date has been scheduled for June 7, 2027. In April
and May 2026, the U.S. Patent Trial and Appeal Board (PTAB) of the U.S. Patent &
Trademark Office denied the institution, on the merits, of six Inter Partes Review proceedings
requested by Samsung, relating to all six patents being asserted by
the Company in the litigation. |
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[3] |
On
December 24, 2024, the Company’s wholly-owned subsidiary, HFT Solutions, LLC, initiated
patent litigations against Citadel Securities, LLC and Jump Trading, LLC in the United States
District Court for the Northern District of Illinois for infringement of certain patents
within our HFT Patent Portfolio. In the Citadel action, on April 7, 2025, the defendant Citadel
filed a motion to dismiss under 35 U.S.C. § 101, asserting that the asserted patents
are directed to patent-ineligible subject matter. On December 1, 2025, the Court denied Citadel’s
motion to dismiss. On January 5, 2026, Citadel filed its answer asserting defenses of non-infringement, patent validity and counterclaims for the same. In the Jump Trading action,
on April 7, 2025, defendant filed an answer and counterclaims of non-infringement and invalidity
of the asserted patents. |
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[4] |
On
April 4, 2014 and December 3, 2014, the Company initiated litigation against Google
Inc. (“Google”) and YouTube, LLC (“YouTube”) in the U.S. District
Court for the Southern District of New York for infringement of several of its patents within
its Cox Patent Portfolio which relate to the identification of media content on the Internet.
The lawsuit alleges that Google and YouTube have infringed and continue to infringe certain
of the Company’s patents by making, using, selling and offering to sell unlicensed
systems and related products and services, which include YouTube’s Content ID system.
In April 2024, following a motion for summary judgment by defendants, the U.S. District Court
for the Southern District of New York issued a judgment dismissing the Company’s patent
infringement claims finding that the asserted claims of two of the patents are invalid for
indefiniteness and granting summary judgment that that the asserted claims of another patent
are not infringed by Google’s accused system. |
On
May 14, 2024, the Company filed a notice of appeal to the U. S. Court of Appeals for the Federal Circuit and oral argument on the appeal
took place on March 9, 2026. On April 23, 2026, the U.S. Court of Appeals for the Federal Circuit issued a decision on the appeal overturning
the judgment of non-infringement of the U.S District Court for the Southern District of New York relating to the Company’s Patent
No. 8,205,237 (the “’237 Patent”) for certain implementations of Google’s Content ID system. The Federal Circuit
also affirmed the District Court’s judgement that (i) certain claims in other asserted patents were invalid, and (ii) a previous
implementation of Content ID does not infringe the claims of the ’237 Patent. The Federal Circuit remanded the case to the District
Court for further proceedings on the infringement case consistent with its decision.
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