Legal Settlement

9 Months Ended

Sep. 30, 2018

Legal Settlement [Abstract]

Legal Settlement

11.    Legal Settlement

On August 6, 2018, we entered into a binding term sheet with Cisco (“Term Sheet”). Under the Term Sheet, we paid Cisco $400.0 million on August 20, 2018, and the parties obtained dismissals of all ongoing district court and USITC litigation between them. Cisco granted us a release for all past claims relating to the patents Cisco asserted against us in the district court and USITC, and we granted Cisco a release from all past antitrust and unfair competition claims. These mutual releases extended to the Company's and Cisco’s customers, contract manufacturers, and partners. The parties further agreed to a five-year stand-down period for any utility patent infringement claims either may have against features currently implemented in the other party’s products and services, with some carve-outs for products stemming from acquired companies. The parties further agreed to a three-year dispute resolution process for allegations by either party against new and/or modified features in the other party’s products. We also agreed to make certain modifications to our Command Line Interface (“CLI”).

Upon signing the Term Sheet, we recorded a legal settlement charge of $405.0 million to operating expenses, which included legal fees associated with the settlement in the three months ended June 30, 2018. We have also recorded a corresponding income tax benefit of $0.9 million and $99.9 million for the three and nine months ended September 30, 2018.