| LEGAL PROCEEDINGS |
NOTE
J – LEGAL PROCEEDINGS
| [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 (“Optiver”) 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. |
| [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. |
| [3] | On December 24, 2024, the Company’s wholly-owned subsidiary, HFT
Solutions, LLC, initiated patent litigations against Citadel Securities, LLC (“Citadel”) and Jump Trading, LLC (“Jump”)
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.
On April 7, 2025, defendant Jump filed an answer and counterclaims of non-infringement and invalidity of the asserted patents. On May
19, 2026 and June 2, 2026, the PTAB denied institution of two IPRs filed by Citadel with respect to two of the patents asserted by the
Company against Citadel in the litigation. On July 1, 2026, the Company dismissed without prejudice its patent infringement case against
Jump. Depending upon future developments in the industry or otherwise, the Company may decide to revisit potential IP causes of action
against Jump in order to protect its intellectual property rights. |
| [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. |
On May 14, 2024, the Company filed a notice of appeal to the U. S. Court
of Appeals for the Federal Circuit. 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. A trial date has been scheduled for
December 7, 2026.
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