We are also party to various legal proceedings and claims which arise in the ordinary course of business. Among these legal matters, in two cases, Summit 6 LLC v. Research in Motion Corporation et al., and Timelines, Inc. v. Facebook, Inc. , we have reached agreements to settle the matters. The cost of settlement in each case, which is included in the accompanying condensed consolidated financial statements for the three months ended March 31, 2013, was not material to our business, financial condition, or results of operations.
I’ve reached out to one of the two co-founders of the plaintiff company, Timelines, for comment. He is likely barred from saying anything specific about the settlement or its terms (financial and otherwise).
Timelines is/was a photo-centric site out of Chicago run by former ShopLocal executives. The founders registered the trademark Timelines. Later Facebook used a singular version of that term for its historical archive.
The Timelines company offered to sell itself or the trademark to Facebook. Facebook declined, litigation ensued. One of the Timelines co-founders left, and the company essentially committed the rest of its cash to the lawsuit.
However, the site is still live and appears to be updating. The people behind Timelines also started Photogram. It’s not clear whether Facebook has acquired the Timelines trademark or merely an “in perpetuity” license to use it.
In April, Facebook lost a motion for summary judgment in the case and had to stand trial. I said the following at the time: We’ll see if Facebook wants to “roll the dice” at trial and face a local jury (read: David vs. Goliath) or offer to settle the case before trial.
Most plaintiffs in contested cases need to get beyond a summary judgment motion before defendants will “get serious” about settlement. Such was probably also the case here. The trial was in process when the settlement occurred.
In the SEC filing cited above, Facebook said the settlement amount was “not material” to its business and therefore was not compelled to disclose it. However, “not material,” in this case, could still be millions of dollars.
Postscript: Timeliness co-founder Bob Armour offered the following statement in email: “The parties have reached an amicable, confidential resolution.”