Company: VSAT
Filing Date: 2025-02-11
Form Type: CORRESP
Source: 0001193125-25-024360
Chunk: 4

Company: VIASAT INC
Filing Date: 2025-02-11
Form: CORRESP
Chunk 4
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 Contract, Acacia ceased paying royalties required related to the licensed technology for
certain of its product generations. Viasat became aware that certain of Acacia’s products continued to use Viasat’s technology, but Acacia had stopped reporting use of the technology and paying the related royalties required under the
terms of the Acacia Contract. In January 2016, Viasat commenced legal proceedings seeking recovery of such amounts, and in fiscal year 2023 was awarded $62.2 million in payments from Cisco (the “Fiscal 2023 Payment”) with respect to
royalties previously earned and not paid.

In November 2019, Viasat filed a second lawsuit against Acacia in the California Superior Court for San Diego
County (“SDSC”), claiming that Acacia had continued to breach the Acacia Contract.

On April 25, 2023, the SDSC issued its ruling in favor
of Viasat and awarded Viasat $97.5 million in contractual remedies based on Acacia’s continued sales of products using Viasat’s technology. On May 31, 2023, Cisco filed an appeal, but continued to pay Viasat related royalties
earned after the April 25, 2023 ruling. On September 29, 2023, Cisco agreed to stop its appeal and that the preceding payments were due and payable to Viasat, bringing the total amount paid by Cisco in fiscal year 2024 relating to the
contractual royalties to $107.1 million (collectively, the “Fiscal 2024 Payment” and, together with the Fiscal 2023 Payment, the ”Acacia Payments”).

Given the Acacia Payments were in settlement of breach of contract claims relating to the Acacia Contract, we assessed the payments under ASC Topic 606,
Revenue from Contracts with Customers (“ASC 606”) in addition to consideration of other potential non-revenue elements as discussed in the December 2007, Speech by the SEC regarding Accounting for
Litigation settlements (Speech by SEC Staff: Remarks before the 2007 AICPA National Conference on Current SEC and PCAOB Developments) and the following with respect to considerations related to litigation settlements as set forth within PwC
Revenue Recognition Guide Section 9.7.4, which states:

To determine the accounting for settlement proceeds, management will need to identify all of the components of the litigation settlement. In addition to a prospective license to IP, the settlement may include other components, such