Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Commitments

In November 2016, the Company executed a lease for new headquarters space in Cambridge, Massachusetts. The lease is for approximately 480,000 square feet and is expected to commence at the termination of the Company's current leases in Cambridge, the majority of which expire on December 31, 2019. The initial lease term is 15 years. In addition to the new lease, the Company also executed an arrangement obligating it to lease at least 150,000 square feet of additional space in Cambridge. The total minimum obligation under these arrangements is $698.4 million. For the year ended December 31, 2020, the Company's minimum obligation is $42.2 million.

Contingencies

During the three months ended June 30, 2016, the Company completed an internal investigation, with the assistance of outside counsel, relating to improper sales practices by a former employee. The internal investigation included a review of compliance with the requirements of the U.S. Foreign Corrupt Practices Act ("FCPA") and other applicable laws and regulations. In February 2015, the Company voluntarily contacted the Commission and Department of Justice to advise both agencies of this internal investigation. In June 2016, the Company signed a non-prosecution agreement with the Commission and agreed to disgorge $0.7 million to resolve this matter, including interest.

In July 2016, as part of the resolution of a patent infringement lawsuit filed by the Company against Limelight Networks, Inc. (“Limelight”) in 2006, the Company agreed to license to Limelight technology covered by certain of the Company’s patents.  The terms of the agreement require Limelight to pay the Company $54.0 million in 12 equal installments over three years, beginning in August 2016. During the third quarter of 2016, the Company received the first installment of $4.5 million, which was recorded as a reduction to general and administrative expenses in the consolidated statement of income, with an insignificant amount recorded as interest income.

In November 2015, Limelight filed a complaint in the U.S. District Court for the Eastern District of Virginia against the Company and XO Communications LLC (“XO”), alleging patent infringement by the two companies.  The complaint alleges that the Company and XO infringed six of Limelight’s content delivery patents.  The complaint seeks to recover from the Company and XO monetary damages based upon lost revenue due to infringing technology used by the companies.  The Company has made counterclaims in the action against Limelight alleging that Limelight has infringed five of the Company’s content delivery patents, and the Company is seeking monetary damages based upon lost revenue due to the infringing technology used by Limelight.  The case is scheduled for trial in January 2017.  No provision with respect to this matter has been made in the Company’s consolidated financial statements.  An estimate of the possible loss or range of loss cannot be made.