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Commitments and Contingencies
6 Months Ended
Jul. 31, 2016
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Commitments and Contingencies

Operating Leases
 
During the six months ended July 31, 2016, we entered into three office facility lease agreements and an amendment to an existing office facility lease agreement with total additional lease obligations of approximately $39.5 million with lease periods expiring through June 2024.
Letters of Credit
As of January 31, 2016 and July 31, 2016, we had outstanding letters of credit in the aggregate amount of $7.1 million and $7.7 million respectively, in connection with our facility leases. The letters of credit are collateralized by restricted cash in the same amount and mature at various dates through June 2024.
Legal Matters
On November 4, 2013, EMC filed a complaint against us in the U.S. District Court for the District of Massachusetts, alleging that our hiring of EMC employees evidences a scheme to misappropriate EMC’s confidential information and trade secrets and to unlawfully interfere with EMC’s business relationships with its customers and contractual relationships with its employees. The complaint seeks damages and injunctive relief. On November 26, 2013, we answered and counterclaimed, denying EMC’s allegations and alleging that EMC surreptitiously obtained and tested our product in a manner that constituted misappropriation of our trade secrets, a breach of contract, breach of the covenant of good faith and fair dealing, unlawful interference with our contractual and business relationships as well as unfair competition and a violation of Massachusetts General Law 93A, Sections 2 and 11. On November 18, 2014, we amended our counterclaim, additionally alleging that EMC has engaged in commercial disparagement, violated the Lanham Act and engaged in defamation. Our counterclaim seeks damages and declaratory and injunctive relief. Fact and expert discovery has closed. Dispositive motions were filed in May 2016. In August 2016, we received summary judgment on EMC’s claims under Massachusetts General Law 93A, and the remainder of our dispositive motions were denied pending resolution at trial. EMC’s dispositive motions are still pending. The District Court has scheduled a trial date for October 24, 2016.
In a separate litigation matter, on November 26, 2013, EMC filed a complaint against us in the U.S. District Court for the District of Delaware, alleging infringement of five patents held by EMC. The five patents are U.S. Patent No. 6,904,556 entitled “Systems and Methods Which Utilize Parity Sets,” U.S. Patent No. 6,915,475 entitled “Data Integrity Management for Data Storage Systems,” U.S. Patent No. 7,373,464 entitled “Efficient Data Storage System” and the related U.S. Patent No. 7,434,015 entitled “Efficient Data Storage System” and U.S. Patent No. 8,375,187 entitled “I/O Scheduling For Flash Drives.” The complaint seeks damages and injunctive and equitable relief, with respect to the FlashArray 400-Series and predecessor products. Prior to trial, EMC dropped U.S. Patent No. 6,915,475 from the suit, and the District Court found, in a summary judgment ruling, that we did not infringe U.S. Patent No. 8,375,187 and did infringe certain claims of U.S. Patent No. 7,434,015, (’015 patent). The remaining two patents and the validity of ‘015 patent went to trial.
On March 15, 2016, the jury returned a verdict finding that we did not infringe U.S. Patent Nos. 6,904,556 and 7,373,464, and that the ‘015 patent, which the District Court ruled us to have infringed, is valid. The jury awarded EMC $14.0 million in royalty damages for infringement of the '015 patent. The jury declined to award any lost profit damages. On March 21, 2016, EMC filed an additional complaint for infringement of the '015 patent with respect to the FlashArray//m product, which EMC did not seek permission from the District Court to add to the lawsuit when FlashArray//m was launched in June of 2015. This new complaint seeks damages and injunctive and equitable relief based on the District Court's previous ruling with respect to the '015 patent. The infringement ruling represents a reasonably possible loss contingency under the applicable accounting standards of up to $14.0 million. We believed there were strong grounds to challenge the infringement ruling by the District Court and the validity finding by the jury with respect to the ‘015 patent, and thus we challenged the findings with respect to the ‘015 patent in post-trial motions before the District Court. On September 1, 2016, the District Court ruled that we are entitled to a new trial on the issue of validity of the ‘015 patent in light of U.S. Patent No. 6,889,297 (the Sun patent) and dismissed as moot EMC’s motion for a permanent injunction precluding us from using the deduplication technology of the asserted claims of the ‘015 patent. No date has been set for the new trial. At present, we do not believe it is probable that a loss has been incurred. As a result, we have not recorded any loss contingency on our consolidated balance sheet as of July 31, 2016.
On September 1, 2016, a purported securities class action entitled Ramsay v. Pure Storage, Inc., et al. was filed in the Superior Court of the State of California (San Mateo County) against us and certain of our officers, directors, investors and underwriters. The complaint asserts claims under sections 11, 12 and 15 of the Securities Act of 1933, 15 U.S.C. section 77 related to alleged inaccuracies, omissions, misstatements or misrepresentations in our registration statement filed in connection with our initial public offering. While we have not yet responded to the complaint, we believe there is no merit to the allegations and intend to defend ourselves vigorously.
From time to time, we have become involved in claims and other legal matters arising in the normal course of business. We investigate these claims as they arise. Although claims are inherently unpredictable, we currently are not aware of any matters that may have a material adverse effect on our business, financial position, results of operations or cash flows. Accordingly, we have not recorded any loss contingency on our consolidated balance sheet as of July 31, 2016.
Indemnification
Our arrangements generally include certain provisions for indemnifying customers against liabilities if our products or services infringe a third party’s intellectual property rights. Other guarantees or indemnification arrangements include guarantees of product and service performance and standby letters of credit for lease facilities. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. To date, we have not incurred any material costs as a result of such obligations and have not accrued any liabilities related to such obligations in the consolidated financial statements. In addition, we indemnify our officers, directors and certain key employees while they are serving in good faith in their respective capacities. To date, there have been no claims under any indemnification provisions.