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This excerpt taken from the EBAY 10-K filed Feb 17, 2010. Commitments and Contingencies We have certain fixed contractual obligations and commitments that include future estimated payments for general operating purposes. Changes in our business needs, contractual cancellation provisions, fluctuating interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of these payments. We have presented below a summary of the most significant assumptions used in our determination of amounts presented in the tables, in order to assist in the review of this information within the context of our consolidated financial position, results of operations, and cash flows. The following table summarizes our fixed contractual obligations and commitments (in thousands):
Operating lease amounts include minimum rental payments under our non-cancelable operating leases for office facilities, as well as limited computer and office equipment that we utilize under lease arrangements. The amounts presented are consistent with contractual terms and are not expected to differ significantly from actual results under our existing leases, unless a substantial change in our headcount needs requires us to expand our occupied space or exit an office facility early. Purchase obligation amounts include minimum purchase commitments for advertising, capital expenditures (computer equipment, software applications, engineering development services, construction contracts) and other goods and services that were entered into through our ordinary course of business. For those contractual arrangements in which there are significant performance requirements, we have developed estimates to project expected payment obligations. These estimates have been developed based upon historical trends, when available, and our anticipated future obligations. Given the significance of such performance requirements within our advertising and other arrangements, actual payments could differ significantly from these estimates. As we are unable to reasonably predict the timing of settlement of liabilities related to unrecognized tax benefits, the table does not include $929.1 million of such non-current liabilities recorded on our consolidated balance sheet as of December 31, 2009. These excerpts taken from the EBAY 10-K filed Feb 20, 2009. Commitments
and Contingencies
We have certain fixed contractual obligations and commitments
that include future estimated payments for general operating
purposes. Changes in our business needs, contractual
cancellation provisions, fluctuating interest rates, and other
factors may result in actual payments differing from the
estimates. We cannot provide certainty regarding the timing and
amounts of these payments. We have presented below a summary of
the most significant assumptions used in our determination of
amounts presented in the tables, in order to assist in the
review of this information within the context of our
consolidated financial position, results of operations, and cash
flows. The following table summarizes our fixed contractual
obligations and commitments (in thousands):
Operating lease amounts include minimum rental payments under
our non-cancelable operating leases for office facilities, as
well as limited computer and office equipment that we utilize
under lease arrangements. The amounts presented are consistent
with contractual terms and are not expected to differ
significantly, unless a substantial change in our headcount
needs requires us to expand our occupied space or exit an office
facility early.
Purchase obligation amounts include minimum purchase commitments
for advertising, capital expenditures (computer equipment,
software applications, engineering development services,
construction contracts) and other goods and services that were
entered into through our ordinary course of business. For those
contractual arrangements in which there are significant
performance requirements, we have developed estimates to project
expected payment obligations. These estimates have been
developed based upon historical trends, when available, and our
anticipated future obligations. Given the significance of such
performance requirements within our advertising and other
arrangements, actual payments could differ significantly from
these estimates.
We have $1.0 billion outstanding under our credit agreement
at December 31, 2008, which we have classified as a current
liability. We may repay the amount outstanding under the line of
credit within the next twelve months.
As we are unable to reasonably predict the timing of settlement
of liabilities related to unrecognized tax benefits under FASB
Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes” (FIN 48), the table does not include
$754.0 million of such non-current liabilities recorded on
our consolidated balance sheet as of December 31, 2008.
Commitments and Contingencies We have certain fixed contractual obligations and commitments that include future estimated payments for general operating purposes. Changes in our business needs, contractual cancellation provisions, fluctuating interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of these payments. We have presented below a summary of the most significant assumptions used in our determination of amounts presented in the tables, in order to assist in the review of this information within the context of our consolidated financial position, results of operations, and cash flows. The following table summarizes our fixed contractual obligations and commitments (in thousands):
Operating lease amounts include minimum rental payments under our non-cancelable operating leases for office facilities, as well as limited computer and office equipment that we utilize under lease arrangements. The amounts presented are consistent with contractual terms and are not expected to differ significantly, unless a substantial change in our headcount needs requires us to expand our occupied space or exit an office facility early. Purchase obligation amounts include minimum purchase commitments for advertising, capital expenditures (computer equipment, software applications, engineering development services, construction contracts) and other goods and services that were entered into through our ordinary course of business. For those contractual arrangements in which there are significant performance requirements, we have developed estimates to project expected payment obligations. These estimates have been developed based upon historical trends, when available, and our anticipated future obligations. Given the significance of such performance requirements within our advertising and other arrangements, actual payments could differ significantly from these estimates. We have $1.0 billion outstanding under our credit agreement at December 31, 2008, which we have classified as a current liability. We may repay the amount outstanding under the line of credit within the next twelve months. As we are unable to reasonably predict the timing of settlement of liabilities related to unrecognized tax benefits under FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (FIN 48), the table does not include $754.0 million of such non-current liabilities recorded on our consolidated balance sheet as of December 31, 2008. These excerpts taken from the EBAY 10-K filed Feb 29, 2008. Commitments
and Contingencies
We have certain fixed contractual obligations and commitments
that include future estimated payments. Changes in our business
needs, contractual cancellation provisions, fluctuating interest
rates, and other factors may result in actual payments differing
from the estimates. We cannot provide certainty regarding the
timing and amounts of these payments. We have presented below a
summary of the most significant assumptions used in our
determination of amounts presented in the tables, in order to
assist in the review of this information within the context of
our consolidated financial position, results of operations, and
cash flows. The following table summarizes our fixed contractual
obligations and commitments (in thousands):
Operating lease amounts include minimum rental payments under
our non-cancelable operating leases for office facilities, as
well as limited computer and office equipment that we utilize
under lease arrangements. The amounts presented are consistent
with contractual terms and are not expected to differ
significantly, unless a substantial change in our headcount
needs requires us to expand our occupied space or exit an office
facility early.
Purchase obligation amounts include minimum purchase commitments
for advertising, capital expenditures (computer equipment,
software applications, engineering development services,
construction contracts) and other goods and services that were
entered into through our ordinary course of business. For those
contractual arrangements in which there are significant
performance requirements, we have developed estimates to project
expected payment obligations. These estimates have been
developed based upon historical trends, when available, and our
anticipated future obligations. Given the significance of such
performance requirements within our advertising and other
arrangements, actual payments could differ significantly from
these estimates.
The table above does not include liabilities related to
unrecognized tax benefits under FASB Interpretation No. 48,
“Accounting for Uncertainty in Income Taxes”
(“FIN 48”). As we are unable to reasonably
predict the timing of settlement of such FIN 48
liabilities, the table does not include $494.3 million of
such non-current liabilities recorded on our consolidated
balance sheet as of December 31, 2007.
Commitments and Contingencies We have certain fixed contractual obligations and commitments that include future estimated payments. Changes in our business needs, contractual cancellation provisions, fluctuating interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of these payments. We have presented below a summary of the most significant assumptions used in our determination of amounts presented in the tables, in order to assist in the review of this information within the context of our consolidated financial position, results of operations, and cash flows. The following table summarizes our fixed contractual obligations and commitments (in thousands):
Operating lease amounts include minimum rental payments under our non-cancelable operating leases for office facilities, as well as limited computer and office equipment that we utilize under lease arrangements. The amounts presented are consistent with contractual terms and are not expected to differ significantly, unless a substantial change in our headcount needs requires us to expand our occupied space or exit an office facility early. Purchase obligation amounts include minimum purchase commitments for advertising, capital expenditures (computer equipment, software applications, engineering development services, construction contracts) and other goods and services that were entered into through our ordinary course of business. For those contractual arrangements in which there are significant performance requirements, we have developed estimates to project expected payment obligations. These estimates have been developed based upon historical trends, when available, and our anticipated future obligations. Given the significance of such performance requirements within our advertising and other arrangements, actual payments could differ significantly from these estimates. The table above does not include liabilities related to unrecognized tax benefits under FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). As we are unable to reasonably predict the timing of settlement of such FIN 48 liabilities, the table does not include $494.3 million of such non-current liabilities recorded on our consolidated balance sheet as of December 31, 2007. This excerpt taken from the EBAY 10-Q filed Apr 25, 2007. Note 6 —
Commitments and Contingencies
Litigation
and Other Legal Matters
In April 2001, two of our European subsidiaries, eBay GmbH and
eBay International AG, were sued by Montres Rolex S.A. and
certain of its affiliates in the regional court of Cologne,
Germany. The suit subsequently was transferred to the regional
court in Düsseldorf, Germany. Rolex alleged that our
subsidiaries were infringing Rolex’s trademarks as a result
of users selling counterfeit Rolex watches through our German
website. The suit also alleged unfair competition. Rolex sought
an order enjoining the sale of Rolex-branded watches on the
website as well as damages. In December 2002, a trial was held
in the matter, and the court ruled in favor of eBay on all
causes of action. Rolex appealed the ruling to the Higher
Regional Court of Düsseldorf, and the appeal was heard in
October 2003. In February 2004, the court rejected Rolex’s
appeal and ruled in our favor. Rolex appealed the ruling to the
German Federal Supreme Court, a hearing took place before that
court in December 2006, and a decision was reached in April 2007
(although the full written decision has not yet been released).
In September 2004, the German Federal Supreme Court issued its
written opinion in favor of Rolex in a case involving an
unrelated company, ricardo.de AG, but somewhat comparable legal
theories. The Court has now confirmed that the ricardo.de
decision applies to eBay, and that eBay must therefore take
reasonable measures to prevent recurrence once it is informed of
clearly identified infringement. The Court may clarify its
reasoning in its full decision, and we expect that the
Court’s decision will result in an increase in litigation
against us in Germany, although we do not currently believe that
it will require a significant change in our business practices.
In August 2006, Louis Vuitton Malletier and Christian Dior
Couture filed two lawsuits in the Paris Court of Commerce
against eBay Inc. and eBay International AG. The complaint
alleges that we violated French tort law by negligently
broadcasting listings posted by third parties offering
counterfeit items bearing plaintiffs’ trademarks, and by
purchasing certain advertising keywords. The plaintiffs seek
approximately EUR 35 million in damages. In or about
September 2006, Parfums Christian Dior, Kenzo Parfums, Parfums
Givenchy, and Guerlain Société also filed a lawsuit in
the Paris Court of Commerce against eBay Inc. and eBay
International AG. The complaint alleges that we have interfered
with the selective distribution network the plaintiffs set up in
France and the European Union by allowing third parties to post
listings offering genuine perfumes and cosmetics for sale on our
sites. The plaintiffs in this suit seek approximately
EUR 9 million in damages and injunctive relief. We
filed our initial briefs responding to the first complaint in
February 2007, and initial briefs in response to the second
complaint are due in April 2007. We believe that we have
meritorious defenses to these suits and intend to defend
ourselves vigorously. Other luxury brand owners have also filed
suit against us or have threatened to do so.
In September 2001, MercExchange LLC filed a complaint against
us, our Half.com subsidiary and ReturnBuy, Inc. in the
U.S. District Court for the Eastern District of Virginia
(No. 2:01-CV-736)
alleging infringement of three patents (relating to online
consignment auction technology, multiple database searching and
electronic consignment systems) and seeking a permanent
injunction and damages (including treble damages for willful
infringement). Following a trial in 2003, the jury returned a
verdict finding that we had willfully infringed the patents
relating to multiple database searching and electronic
consignment systems, and the court entered judgment for
MercExchange in the amount of approximately $30 million,
plus pre-judgment interest and post-judgment interest. In May
2006, following appeals to the U.S. Court of Appeals for
the Federal Circuit and the U.S. Supreme Court, the Supreme
Court remanded the case back to the district court for further
action. In parallel with the federal court proceedings, at our
request, the U.S. Patent and Trademark Office agreed to
reexamine each of the patents in suit, finding that substantial
questions existed regarding the validity of the claims contained
in them. In separate actions in 2005, the Patent and Trademark
Office initially rejected all of the claims contained in the
three patents in suit. In March 2006, the Patent and Trademark
Office reiterated its earlier ruling rejecting the claims
contained in the patent
Table of Contents
eBay
Inc.
NOTES TO
CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
that underlies the jury verdict, which relates to electronic
consignment systems. We have requested that the district court
stay all proceedings in the case pending the final outcome of
the reexamination proceedings, and MercExchange has renewed its
request that the district court grant an injunction. Final
briefs regarding both claims were filed in March 2007, and a
hearing has been scheduled for June 2007. Even if we are
successful, litigation of these matters will continue to be
costly. As a precautionary measure, we have modified certain
functionality of our websites and business practices in a manner
which we believe avoids any infringement of the consignment
patent. For this reason, we believe that any injunction that
might be issued by the district court will not have any impact
on our business. We also believe we have appropriate reserves
for this litigation. Nonetheless, if the modifications to the
functionality of our websites and business practices are not
sufficient to make them non-infringing, we would likely be
forced to pay significant additional damages and licensing fees
and/or
modify our business practices in an adverse manner.
In June 2006, Net2Phone, Inc. filed a lawsuit in the
U.S. District Court for the District of New Jersey
(No. 06-2469)
alleging that eBay Inc., Skype Technologies S.A., and Skype Inc.
infringed five patents owned by Net2Phone relating to
point-to-point
Internet protocol. The suit seeks an injunction against
continuing infringement, unspecified damages, including treble
damages for willful infringement, and interest, costs, and fees.
We have filed an answer and counterclaims asserting that the
patents are invalid, unenforceable, and were not infringed. The
parties are in the process of conducting discovery. A claim
construction hearing has been scheduled for September 2007, and
we expect a trial date to be scheduled for 2008. We believe that
we have meritorious defenses and intend to defend ourselves
vigorously.
In August 2006, Peer Communications Corporation filed a lawsuit
in the U.S. District Court for the Eastern District of
Texas
(No. 6-06CV-370)
alleging that eBay Inc., Skype Technologies S.A., and Skype Inc.
infringed two patents owned by Peer Communications relating to
uniform network access. The suit seeks an injunction against
continuing infringement, unspecified damages, and interest,
costs, and fees. The parties are in the process of conducting
discovery, and a trial date has been scheduled for October 2008.
We believe that we have meritorious defenses and intend to
defend ourselves vigorously.
In September 2006, Mangosoft Intellectual Property, Inc. filed a
lawsuit in the U.S. District Court for the Eastern District
of Texas
(No. 2-06CV-390)
alleging that eBay Inc., Skype Technologies S.A., and Skype
Software S.a.r.l. infringed a patent owned by Mangosoft relating
to dynamic directory services. The suit seeks an injunction
against continuing infringement, unspecified damages, and
interest, costs, and fees. We have filed an answer and
counterclaims asserting that the patents are invalid,
unenforceable, and not infringed. We expect to receive the
court’s scheduling order shortly. We believe that we have
meritorious defenses and intend to defend ourselves vigorously.
In February 2007, our StubHub subsidiary was sued in the
U.S. District Court for the Central District of California
(No. CV-07-1328)
in a purported class action lawsuit alleging that StubHub
violated the Fair and Accurate Credit Transaction Act by
allegedly printing receipts containing more than the last five
digits of a credit card number or the expiration date. The
complaint seeks compensatory and punitive damages and attorneys
fees. We believe that we have meritorious defenses and intend to
defend ourselves vigorously.
In March 2007, a plaintiff filed a purported antitrust class
action lawsuit against eBay in the Western District of Texas,
alleging that eBay, through its wholly owned subsidiary PayPal,
used illegal tie-in and steering practices to improperly
“monopolize” the forms of payment that sellers can use
on eBay. The plaintiff alleges claims under sections 1 and
2 of the Sherman Act, as well as related state law claims. The
complaint seeks treble damages and an injunction. In April 2007,
the plaintiff re-filed the complaint in the U.S. District
Court for the Northern District of California
(No. 07-CV-01882-RS),
and dismissed the Texas action. We believe that we have
meritorious defenses and intend to defend ourselves vigorously.
Other third parties have from time to time claimed, and others
may claim in the future, that we have infringed their
intellectual property rights. We are subject to additional
patent disputes, and expect that we will increasingly
Table of Contents
eBay
Inc.
NOTES TO
CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
be subject to patent infringement claims as our services expand
in scope and complexity. In particular, we expect that we may
face additional patent infringement claims involving various
aspects of our Marketplaces, Payments and Communications
businesses. We have in the past been forced to litigate such
claims. We may also become more vulnerable to third-party claims
as laws such as the Digital Millennium Copyright Act, the Lanham
Act and the Communications Decency Act are interpreted by the
courts, and as we expand geographically into jurisdictions where
the underlying laws with respect to the potential liability of
online intermediaries like ourselves are either unclear or less
favorable. We believe that additional lawsuits alleging that we
have violated copyright or trademark laws will be filed against
us, especially in Europe. Intellectual property claims, whether
meritorious or not, are time consuming and costly to resolve,
could require expensive changes in our methods of doing
business, or could require us to enter into costly royalty or
licensing agreements.
From time to time, we are involved in other disputes or
regulatory inquiries that arise in the ordinary course of
business. The number and significance of these disputes and
inquiries are increasing as our business expands and our company
grows larger. Any claims or regulatory actions against us,
whether meritorious or not, could be time consuming, result in
costly litigation, require significant amounts of management
time, and result in the diversion of significant operational
resources.
Indemnification
Provisions
In the ordinary course of business we have included limited
indemnification provisions in certain of our agreements with
parties with whom we have commercial relations, including our
standard marketing, promotions and
application-programming-interface license agreements. Under
these contracts, we generally indemnify, hold harmless, and
agree to reimburse the indemnified party for losses suffered or
incurred by the indemnified party in connection with claims by
any third party with respect to domain names, trademarks, logos
and other branding elements to the extent that such marks are
applicable to our performance under the subject agreement. In a
limited number of agreements, we have provided an indemnity for
other types of third-party claims, substantially all of which
are indemnities related to copyrights, trademarks, and patents.
In our PayPal business, we have provided an indemnity to our
payment processors in the event of certain third-party claims or
card association fines against the processor arising out of
conduct by PayPal. It is not possible to determine the maximum
potential loss under these indemnification provisions due to our
limited history of prior indemnification claims and the unique
facts and circumstances involved in each particular provision.
To date, no significant costs have been incurred, either
individually or collectively, in connection with our
indemnification provisions.
This excerpt taken from the EBAY 10-K filed Feb 28, 2007. Commitments
and Contingencies
We have certain fixed contractual obligations and commitments
that include future estimated payments. Changes in our business
needs, cancellation provisions, changing interest rates, and
other factors may result in actual payments differing from the
estimates. We cannot provide certainty regarding the timing and
amounts of payments. We have presented below a summary of the
most significant assumptions used in our determination of
amounts presented in the tables, in order to assist in the
review of this information within the context of our
consolidated financial position, results of operations, and cash
flows. The following table summarizes our fixed contractual
obligations and commitments (in thousands):
Operating lease amounts include minimum rental payments under
our non-cancelable operating leases for office facilities, as
well as limited computer and office equipment that we utilize
under lease arrangements. The amounts presented are consistent
with contractual terms and are not expected to differ
significantly, unless a substantial change in our headcount
needs requires us to exit an office facility early or expand our
occupied space.
Table of Contents
Purchase obligation amounts include minimum purchase commitments
for advertising, capital expenditures (computer equipment,
software applications, engineering development services,
construction contracts) and other goods and services that were
entered into through our ordinary course of business. For those
contractual arrangements in which there are significant
performance requirements, we have developed estimates to project
expected payment obligations. These estimates have been
developed based upon historical trends, when available, and our
anticipated future obligations. Given the significance of such
performance requirements within our advertising and other
arrangements, actual payments could differ significantly from
these estimates.
In conjunction with our Skype acquisition, we have certain
earn-out payment commitments, not included in table above, that
are contingent upon Skype achieving certain net revenues, gross
profit margin-based targets and active user targets. See
“Note 3 — Business Combinations, Goodwill
and Intangible Assets” of the consolidated financial
statements included elsewhere in this Annual Report on
Form 10-K.
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