Adeia Inc. 10-Q

Item 1. Legal Proceedings In the normal course of our business, we are involved in legal proceedings. In the past, we have litigated to enforce our patents, to enforce the terms of license agreements, and to defend our patents against claims of invalidity. We expect to continue to be involved in similar legal proceedings in the future, including proceedings regarding infringement of our patents and proceedings to ensure proper and full payment of royalties by licensees under the terms of our license agreements. We cannot predict the outcome of any of the proceedings described below, other than to the extent such proceedings have concluded. An adverse decision in any of these proceedings could significantly harm our business and our consolidated financial position, results of operations, and cash flows. Patent Infringement Litigation In the ordinary course of our IP licensing business, we engage in litigation to protect our IP from infringement. While litigation is never our preference, and we prefer to reach mutually agreeable commercial licensing arrangements with third parties, it is sometimes a necessary step to effectively protect our investment in our IP. As a result of these lawsuits, defendants have often filed Inter Partes Review (“IPR”) petitions with the U.S. Patent Office’s Patent Trial and Appeal Board (and other similar post-grant proceedings outside of the U.S.) seeking to invalidate one or more of our patents. We are currently engaged in multiple lawsuits with several third parties. Videotron Patent Infringement Litigation On May 21, 2021, Adeia Guides Inc. (formerly known as Rovi Guides, Inc.) (“Adeia Guides”) filed a patent infringement complaint against Videotron Ltd. (“Videotron”) in Toronto, Canada, alleging infringement of four patents (the “Videotron Litigation”). On July 21, 2021, the Federal Court of Canada held a case management conference in the Videotron Litigation, shortly before which Videotron filed a motion to strike various portions of the statement of claim. On March 22, 2022, the Court issued an order on Videotron’s motion to strike, dismissing the motion in its entirety. On April 1, 2022, Videotron filed an appeal of the Court’s order dismissing Videotron’s motion to strike. On June 30, 2022, the Court of Appeal issued its decision in Videotron’s appeal in which it ruled in Adeia Guides’s favor and dismissed Videotron’s appeal. The trial commenced on February 3, 2025. Closing arguments were held April 15-17, 2025. There is no set deadline for the Federal Court of Canada to issue a decision. Bell Patent Infringement Litigation On July 27, 2021, Adeia Guides and Adeia Media Holdings LLC (formerly known as TiVo LLC) (together, “Adeia Media”) filed a patent infringement complaint against Bell Canada and four of its affiliates, Telefonaktiebolaget L M Ericsson, Ericsson Canada Inc., and MK Systems USA Inc. and MK Mediatech Canada Inc. (collectively, “Defendants”) in Toronto, Canada, alleging infringement of four patents (the “Bell Litigation”). The Defendants filed a motion to strike various portions of the statement of claim in the Bell Litigation. On March 22, 2022, the Court issued an order on Defendants’ motion to strike, dismissing-in-part and granting-in-part. On April 1, 2022, the Defendants filed a Notice of Motion to Appeal the Court’s order on Defendants’ motion to strike. On June 30, 2022, the Court of Appeal issued its decision in Defendants' appeal in which it ruled in Adeia Media's favor and dismissed Defendants’ appeal. On September 30, 2022, Defendants filed a motion for bifurcation, asking the Federal Court of Canada to bifurcate the case into two phases: a first phase related to liability and injunction and second phase addressing damages if liability is found. The Court held a hearing on the motion for bifurcation on December 12, 2022. On February 15, 2023, the Court issued an order granting the motion for bifurcation in which the Court bifurcated the liability and injunction phase from the damages quantification phase of the case. The trial commenced on April 28, 2025. Closing arguments were held June 2-4, 2025. There is no set deadline for the Federal Court of Canada to issue a decision. Shaw Breach of Contract Litigation On October 2, 2023, Adeia Guides Inc., Adeia Media Solutions Inc., and Adeia Media Holdings LLC (collectively, “Adeia Media Companies”) filed a complaint against Shaw Cablesystems G.P. and Shaw Satellite G.P. (together, “Shaw”) in the United States District Court for the Southern District of New York, alleging breach of contract by Shaw for failure to pay royalties owed to Adeia Media Companies under the license agreement between the parties. On October 8, 2024, Shaw filed a motion to dismiss the complaint. The Court has yet to rule on Shaw’s motion to dismiss. The trial date has not been set. 39 Disney Patent Infringement Litigation On November 7, 2024, Adeia Technologies Inc., (“Adeia Technologies”) and Adeia Media filed a complaint against The Walt Disney Company, Disney Media and Entertainment Distribution LLC, Disney DTC LLC, Disney Streaming Services LLC, Disney Entertainment & Sports LLC, Disney Platform Distribution, Inc., BAMTech, LLC, Hulu, LLC, and ESPN, Inc. (collectively, “Disney U.S. Defendants”) in the United States District Court for the District of Delaware, alleging infringement of six patents. On January 16, 2025, Disney U.S. Defendants filed a motion to dismiss two of the six asserted patents as invalid under 35 U.S.C. §101. Adeia Technologies and Adeia Media’s opposition to the motion to dismiss was filed on February 13, 2025. Disney U.S. Defendants’ reply was filed February 27, 2025. The Court has yet to rule on Disney U.S. Defendants’ motion to dismiss. Trial has been set for June 7-11, 2027. On November 7, 2024, Adeia Solutions LLC (“Adeia Solutions”) filed a complaint against The Walt Disney Company Benelux (BV), Disney Interactive Studios, Inc., and The Walt Disney Company Limited (collectively, “Disney Europe Defendants”) in the Regional Court of Munich, Germany, alleging infringement of one patent. Disney Europe Defendants filed their response to the complaint on June 30, 2025. Adeia Solutions’ reply to Disney Europe Defendants’ response to the complaint is due September 30, 2025. The oral hearing on the merits is set for February 25, 2026. On November 7, 2024, Adeia Guides filed a complaint against the Disney Europe Defendants in the Unified Patent Court (“UPC”) Munich Local Division, Germany, alleging infringement of one patent. Disney Europe Defendants filed their Statement of Defence and Counterclaim for Revocation on March 10, 2025. Adeia Guides filed its reply to Disney Europe Defendants’ Statement of Defence and Counterclaim for Revocation on May 12, 2025. Oral hearing on the merits is set for January 15, 2026. On November 7, 2024, Adeia Guides filed a complaint against Disney Europe Defendants in the UPC The Hague Local Division, The Netherlands, alleging infringement of one patent. Disney Europe Defendants filed their Statement of Defence and Counterclaim for Revocation on March 5, 2025. Adeia Guides filed its reply to the Disney Europe Defendants’ Statement of Defence and Counterclaim for Revocation on May 21, 2025. Oral hearing on the merits has not been set yet. On November 11, 2024, Adeia Guides filed a complaint against The Walt Disney Company (Brasil) LTDA (“Disney Brazil”) in Rio de Janeiro State Court, Brazil, alleging infringement of four patents (the “Brazil Asserted Patents”). Disney Brazil’s answer to the complaint was filed on January 27, 2025. Adeia Guides filed its rebuttal to Disney Brazil’s answer to the complaint on May 15, 2025. On January 27, 2025, Disney Brazil filed a patent invalidity lawsuit against Adeia Inc. and Adeia Guides Inc. (collectively. “Adeia Brazil Invalidity Defendants”) at the Brazilian Patent and Trademark Office in Rio de Janeiro Federal Court, Brazil, alleging the Brazil Asserted Patents are invalid. Adeia Brazil Invalidity Defendants’ response to Disney Brazil’s invalidity complaint is due September 5, 2025. Altice Declaratory Judgment of Noninfringement Litigation On June 27, 2025, Altice USA, Inc., Cequel Communications, LLC and CSC Holdings, LLC (collectively, “Altice”) filed a complaint against Adeia Inc, Adeia Guides Inc., Adeia Media Holdings LLC, Adeia Technologies Inc. and Adeia Media Solutions Inc. (collectively, “Adeia Group”) in the United States District Court for the Southern District of New York seeking a declaratory judgment of noninfringement of ten of our patents. The date for Adeia Group to respond to Altice’s complaint and the trial date have not been set yet. 40 Item 1A. Ri sk Factors There were no material changes to the risk factors previously disclosed in Part 1, Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2024, which is incorporated by reference herein. Item 2. Unregistered Sales of Equity Securities, Use of Proceeds , and Issuer Purchases of Equity Securities Not applicable. Item 3. Defaults Upon Senior Securities Not applicable. Item 4. Mine Safety Disclosures Not applicable.