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Litigation, Commitments and Contingencies
9 Months Ended
Sep. 30, 2011
Litigation, Commitments and Contingencies [Abstract] 
Legal Matters and Contingencies [Text Block]
Litigation, Commitments and Contingencies
We are the subject of various pending or threatened legal actions in the ordinary course of our business. All such matters are subject to many uncertainties and outcomes that are not predictable with assurance. Additionally, our audio and video information and secure and scalable storage businesses are subject to allegations of patent infringement by our competitors as well as by non-practicing entities (NPEs), sometimes referred to as “patent trolls,” who may seek monetary settlements from us, our competitors, suppliers and resellers. Consequently, as of September 30, 2011, we are unable to ascertain the ultimate aggregate amount of any monetary liability or financial impact that we may incur with respect to these matters. While these matters could materially affect operating results depending upon the final resolution in future periods, it is our opinion that after final disposition, any monetary liability beyond that provided in the Condensed Consolidated Balance Sheet as of September 30, 2011 would not be material to our Condensed Consolidated Financial Statements.
On June 19, 2009 Advanced Research Corp. (ARC) sued Imation in Ramsey County District Court for breach of contract relating to a supply agreement under which we purchased our requirements for magnetic heads to write servo patterns on magnetic tape prior to sale of the finished cartridges, requesting the court to order that Imation pay damages and return the purchased heads to ARC. A trial date had been set for October 2011, but in September 2011 we agreed to a settlement of the matter. Under the terms of the settlement we agreed to pay ARC $2 million. The one time payment was accrued for in the third quarter of 2011 and recorded as a litigation settlement expense in the Condensed Consolidated Statements of Operations.
In some countries in Europe the sale of recordable optical media is subject to a private copying levy, which is an extra charge on purchases of these products. Imation collects the levies upon sale, and submits payment of the levies to copyright collective non-government agencies for distribution to content providers as “fair compensation” for the harm caused to them due to private copies made by natural persons of protected works. For several years the amount of the levies in Europe has been in question and the subject of various litigation and law making activities. During 2010 we began withholding payments from the collecting agencies related to levies on some of the recordable optical media we sold but we continued to accrue the liability. For some countries we have discontinued recording the accrual. Quarterly we review the necessity of the accrued liability on a country-by-country basis relative to the ongoing developments related to litigation and law making activities in each country. Depending on our expectations of the final outcome of the various litigation and law making activities, if we determine the payment is less than what we have accrued, the estimated over accrual will be reversed and recorded as a reduction to our cost of goods sold in the period that we determine the payment is not probable. During the three and nine months ended September 30, 2011, we reversed $7.2 million and $12.7 million of the European levy accruals, respectively, due to our determination of probability based on court decisions which clarify the circumstances in which we are required to pay certain levies. The reversal was recorded as a benefit to cost of goods sold in the Condensed Consolidated Statements of Operations.