Item 3. Legal Proceedings
Item 3. Legal Proceedings
We are, and from time to time
may become, involved in various legal proceedings arising in the normal course of our business activities, such as copyright infringement
and tort claims arising from user-uploaded content, patent infringement claims, breach of contract claims, government demands, putative
class actions based upon consumer protection or privacy laws and other matters. The amounts that may be recovered in such matters may
be subject to insurance coverage.
On January 27, 2022, we received
notification of a lawsuit filed by Kosmayer Investment Inc. (“KII”) against Rumble and Mr. Pavlovski in the Ontario Superior
Court of Justice, alleging fraudulent misrepresentation in connection with KII’s decision to redeem its shares of Rumble in August
2020. On June 3, 2022, we served our statement of defence, and KII filed a reply pleading on June 15, 2022. The case remains in discovery.
KII is seeking rescission of such redemption such that, following such rescission, KII would own 20% of the issued and outstanding shares
of Rumble or, in the alternative, damages for the lost value of the redeemed shares, which KII has alleged to be worth $419.0 million
(based on the value ascribed to the shares of Rumble in the Business Combination), together with other damages including punitive damages
and costs. The case remains in discovery. Although we believe that the allegations are meritless and intend to vigorously defend against
them, the result or impact of such claim is uncertain, and could result in, among other things, damages, and/or awards of attorneys’
fees or expenses.
In January 2021, we filed an
antitrust lawsuit against Google in the United States District Court for the Northern District of California, alleging that Google unlawfully
gives an advantage to its YouTube platform over Rumble in search engine results and in the mobile phone market. In June 2021, Google filed
a partial motion to dismiss the lawsuit and a motion to strike; in July 2022, the court denied Google’s motion. The case is currently
in discovery, with trial scheduled for November 4, 2024.
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In August 2022, we received notification
of a patent infringement lawsuit in the United States District Court for the Middle District of Florida by Interactive Content Engines
LLC (“ICE”), a non-practicing entity. On October 5, 2022, we filed our answer to ICE’s complaint and counterclaims
asserting non-infringement and invalidity of the asserted patents. The court has scheduled a claim construction hearing for May 31, 2023.
Although we believe that the allegations of infringement are meritless and intend to vigorously defend against them, the result or impact
of such lawsuit is uncertain, and could result in, among other things, damages and/or awards of attorneys’ fees or expenses.
In October 2022, we received notification of a putative class action
lawsuit alleging violations of the Video Privacy Protection Act in the United States District Court for the Middle District of Florida.
On March 13, 2023, the court denied our motion to dismiss the lawsuit. Although we believe that the allegations are meritless and intend
to vigorously defend against them, the result or impact of the lawsuit is uncertain, and could result in, among other things, damages
and/or awards of attorneys’ fees or expenses.
Along with co-plaintiff Eugene
Volokh, on December 1, 2022, we filed a lawsuit in the U.S. District Court for the Southern District of New York to block the enforcement
of New York State’s Social Media Law. On February 14, 2023, the court granted our motion for a preliminary injunction, halting enforcement
of the law; on March 13, 2023, the New York Attorney General filed a notice of her intent to appeal that decision to the U.S. Court of
Appeals for the Second Circuit.
On February 17, 2023, we filed a petition in the Court of Chancery
under 8 Del. C. §205, or Section 205 of the Delaware General Corporation Law (the “Petition”) to resolve potential uncertainty
with respect to our authorized share capital that was introduced by a recent holding in Garfield v. Boxed, Inc. , 2022 WL 17959766
(Del. Ch. Dec. 27, 2022). The Court of Chancery granted our petition on March 6, 2023, and entered an order that same day under 8 Del.
C. §205 (1) declaring our current certificate of incorporation (the “Current Certificate of Incorporation”), including
the filing and effectiveness thereof, as validated and effective retroactive to the date of its filing with the Office of the Secretary
of State of the State of Delaware on September 15, 2022, and all amendments effected thereby and (2) ordering that our securities (and
the issuance of the securities) described in the Petition and any other securities issued in reliance on the validity of the Current Certificate
of Incorporation are validated and declared effective, each as of the original issuance dates. We have received a litigation demand concerning
the subject matter of the Petition, which we now believe to be moot by virtue of the granting of the Petition.
Item 4. Mine Safety Disclosures
Not Applicable.
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Part
II