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Legal Proceedings

6 Months Ended

May 31, 2011

10.

LEGAL PROCEEDINGS

IPO Allocation Suit

We, certain of our directors and officers, and certain investment bank underwriters have been named in a putative class action for violation of the federal securities laws in the United States District Court for the Southern District of New York, captioned "In re TIBCO Software Inc. Initial Public Offering Securities Litigation." This is one of a number of cases challenging underwriting practices in the initial public offerings (each, an "IPO") of more than 300 companies, which have been coordinated for pretrial proceedings as "In re Initial Public Offering Securities Litigation." Plaintiffs generally allege that the underwriters engaged in undisclosed and improper underwriting activities, namely the receipt of excessive brokerage commissions and customer agreements regarding post-offering purchases of stock in exchange for allocations of IPO shares. Plaintiffs also allege that various investment bank securities analysts issued false and misleading analyst reports. The complaint against us claims that the purported improper underwriting activities were not disclosed in the registration statements for our IPO and secondary public offering and seeks unspecified damages on behalf of a purported class of persons who purchased our securities or sold put options during the time period from July 13, 1999 to December 6, 2000.

A lawsuit with similar allegations of undisclosed improper underwriting practices, and part of the same coordinated proceedings, is pending against Talarian, which we acquired in 2002. That action is captioned "In re Talarian Corp. Initial Public Offering Securities Litigation." The complaint against Talarian, certain of its underwriters and certain of its former directors and officers claims that the purported improper underwriting activities were not disclosed in the registration statement for Talarian's IPO and seeks unspecified damages on behalf of a purported class of persons who purchased Talarian securities during the time period from July 20, 2000 to December 6, 2000.

The parties have reached a global settlement of the litigation, including the actions against us and Talarian. Under the settlement, the insurers will pay the full amount of settlement share allocated to us (our financial liability will be limited to paying the remaining balance of the applicable retention under Talarian's directors and officers liability insurance policy). In addition, we and the other defendants will receive complete dismissals from the case. In 2009, the Court granted final approval of the settlement. Certain objectors appealed; several of the appeals have been dismissed. In May 2011, the appellate court issued an order to remand the remaining appeals to the district court for further determination.

Proginet Merger Litigation

On June 28, 2010, a putative shareholder class action suit was filed by individual stockholders in the Supreme Court of the State of New York, Nassau County, against Proginet (which we acquired on September 15, 2010), certain of its officers and directors, us and our subsidiary created for the purpose of effectuating the acquisition of Proginet. The complaint generally alleged that the individual defendants breached their fiduciary duties by failing to maximize shareholder value in negotiating and approving the merger agreement, and that Proginet and we aided and abetted those alleged breaches of fiduciary duties. The complaint seeks, among other relief, class certification, certain forms of injunctive relief, including enjoining the proposed merger, and unspecified damages.

We, Proginet and the other defendants in this action entered into an agreement providing for the settlement and dismissal with prejudice of this action. The agreement is subject to approval of the court. Although we and Proginet believe that the action is without merit, we and Proginet entered into the settlement to avoid the risk of delaying the merger and to minimize the expense of defending the action. The settlement and dismissal with prejudice, if approved by the court, will resolve all of the claims that were or could have been brought in the action, including all claims relating to the merger (other than claims for appraisal under Section 262 of Delaware law). In connection with the settlement and dismissal with prejudice, Proginet has agreed, subject to court approval, that it will pay plaintiffs' counsel the amount of up to $200,000 for its fees and expenses in the action.

JuxtaComm v. TIBCO, et al.

On January 21, 2010, JuxtaComm-Texas Software, LLC ("JuxtaComm") filed a complaint for patent infringement against us and other defendants in the United States District Court for the Eastern District of Texas, Case No. 6:10-CV-00011-LED. On April 22, 2010, JuxtaComm filed an amended complaint in which it alleges that certain TIBCO offerings, including ActiveMatrix Business Works^™, TIBCO iProcess^™ Suite, TIBCO Business Studio^™ and TIBCO ActiveMatrix^® Service Bus infringe U.S. Patent No. 6,195,662.

JuxtaComm seeks injunctive relief and unspecified damages. On May 6, 2010, we filed an answer and counterclaims in which we denied JuxtaComm's claims and asserted counterclaims for declaratory relief that the asserted patent is invalid and not infringed. Trial is scheduled for January 3, 2012. We intend to defend the action vigorously. While we believe that we have valid defenses to JuxtaComm's claims, litigation is inherently unpredictable and we cannot make any predictions as to the outcome of this litigation. It is possible that our business, financial position, or results of operations could be negatively affected by an unfavorable resolution of this action.

InvestPic, LLC v. TIBCO, et al.

On November 24, 2010, InvestPic, LLC ("InvestPic") filed a complaint for patent infringement against us and fourteen other defendants in the United States District Court for the District of Delaware, Case No. 1:10cv01028-SLR. The complaint alleges that TIBCO Spotfire^® S+^® "and other similar products" infringe U.S. Patent No. 6,349,291 (the "'291 patent"). On March 29, 2011, defendant SAS Institute Inc. filed a motion to dismiss the complaint for failure to state a claim for relief on the basis that all the asserted claims of the '291 patent are invalid as being directed to unpatentable subject matter. On May 13, 2011, TIBCO, along with other defendants, filed a motion to dismiss the complaint on the same grounds as SAS' motion.

InvestPic seeks injunctive relief and unspecified damages. The Court has not yet set a schedule for the case. We intend to defend the action vigorously. While we believe that we have valid defenses to InvestPic's claims, litigation is inherently unpredictable and we cannot make any predictions as to the outcome of this litigation. It is possible that our business, financial position, or results of operations could be negatively affected by an unfavorable resolution of this action.