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WESTERN DIGITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
Long-term Purchase Agreements
The Company has entered into long-term purchase agreements with various component suppliers. The commit-
ments depend on specific products ordered and may be subject to minimum quality requirements and future price
negotiations. The Company expects these commitments to total $43 million for 2014, $8 million for 2015,
$2 million for 2016, $1 million for 2017 and $1 million for 2018.
Note 5.
Legal Proceedings
When the Company becomes aware of a claim or potential claim, the Company assesses the likelihood of any loss
or exposure. The Company discloses information regarding each material claim where the likelihood of a loss con-
tingency is probable or reasonably possible. If a loss contingency is probable and the amount of the loss can be reason-
ably estimated, the Company records an accrual for the loss. In such cases, there may be an exposure to potential loss
in excess of the amount accrued. Where a loss is not probable but is reasonably possible or where a loss in excess of the
amount accrued is reasonably possible, the Company discloses an estimate of the amount of the loss or range of possi-
ble losses for the claim if a reasonable estimate can be made, unless the amount of such reasonably possible losses is
not material to the Company's financial position, results of operations or cash flows. Unless otherwise stated below, for
each of the matters described below, the Company has either recorded an accrual for losses that are probable and
reasonably estimable or has determined that, while a loss is reasonably possible (including potential losses in excess of
the amounts accrued by the Company), a reasonable estimate of the amount of loss or range of possible losses with
respect to the claim or in excess of amounts already accrued by the Company cannot be made. The ability to predict
the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. The actual outcome of
such matters could differ materially from management's estimates.
Solely for purposes of this footnote, "WD" refers to Western Digital Corporation or one or more of its subsidiaries
prior to the acquisition of HGST, "HGST" refers to HGST or one or more of its subsidiaries as of the Closing Date, and
"the Company" refers to Western Digital Corporation and all of its subsidiaries on a consolidated basis including HGST.
Intellectual Property Litigation
On June 20, 2008, plaintiff Convolve, Inc. ("Convolve") filed a complaint in the Eastern District of Texas against
WD, HGST, and one other company alleging infringement of U.S. Patent Nos. 6,314,473 and 4,916,635. The com-
plaint sought unspecified monetary damages and injunctive relief. On October 10, 2008, Convolve amended its com-
plaint to allege infringement of only the `473 patent. The `473 patent allegedly relates to interface technology to select
between certain modes of a disk drive's operations relating to speed and noise. A trial in the matter began on July 18,
2011 and concluded on July 26, 2011 with a verdict against WD and HGST in an amount that is not material to the
Company's financial position, results of operations or cash flows. WD and HGST have filed post-trial motions challeng-
ing the verdict and will evaluate their options for appeal after the Court rules on the post-trial motions.
On December 7, 2009, plaintiff Nazomi Communications ("Nazomi") filed a complaint in the Eastern District
of Texas against WD and seven other companies alleging infringement of U.S. Patent Nos. 7,080,362 and 7,225,436.
Nazomi dismissed the Eastern District of Texas suit after filing a similar complaint in the Central District of Cal-
ifornia on February 8, 2010. The case was subsequently transferred to the Northern District of California on
October 14, 2010. The complaint seeks injunctive relief and unspecified monetary damages, fees and costs. The
asserted patents allegedly relate to processor cores capable of Java hardware acceleration. In August 2012, the Court
dismissed WD on summary judgment for non-infringement. Nazomi filed a notice of appeal on January 16, 2013.
WD intends to continue to defend itself vigorously in this matter.
On November 10, 2010, plaintiff Rembrandt Data Storage ("Rembrandt") filed a complaint in the Western
District of Wisconsin against WD alleging infringement of U.S. Patent Nos. 5,995,342 and 6,195,232. The com-
plaint seeks injunctive relief and unspecified monetary damages, fees and costs. The asserted patents allegedly relate to
specific thin film heads having solenoid coils. After a favorable claim construction ruling by the court, WD secured a
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