COMMITMENTS AND CONTINGENCIES

Leases

The Company leases its facilities under operating leases, which expire at various times through 2028. The Company is responsible for certain real estate taxes, utilities and maintenance costs under these leases. The Company's corporate headquarters is located in a leased facility in Westford, Massachusetts, consisting of 97,500 square feet under a lease that expires in August 2028.

Escalation clauses, free rent and other lease concessions are recognized on a straight-line basis over the minimum lease term. Rent expense was $5.9 million for the year ended December 31, 2017, $4.5 million for the year ended December 31, 2016 and $5.2 million for the year ended December 31, 2015.

Future minimum payments under operating lease arrangements as of December 31, 2017 were as follows (in thousands):



Years ending December 31,
2018	$	14,703
2019	11,067
2020	6,632
2021	5,612
2022	3,680
Thereafter	15,866
	$	57,560

Litigation and Contingencies

The Company is fully cooperating with an SEC inquiry regarding the development and issuance of Sonus’ first quarter 2015 revenue and earnings guidance. Following recent communications with the SEC's Division of Enforcement (the "Staff"), the Company has reached an agreement in principle to resolve this matter. The Company is negotiating the terms of an order with the Staff in which it will neither admit nor deny, and that as part of the settlement the Company will pay a $1.9 million civil penalty and agree not to violate the securities laws in the future. The Company recorded $1.9 million in the year ended December 31, 2017, including $0.3 million in the three months ended December 31, 2017, for potential fines in connection with this investigation.

In addition, through GENBAND, the Company is involved in three ongoing patent infringement lawsuits with Metaswitch Networks Ltd., Metaswitch Networks Corp. and Metaswitch Inc. (collectively, “Metaswitch”). First, on January 21, 2014, GENBAND and the Company’s indirectly-owned subsidiary, GENBAND US LLC, filed a complaint alleging that Metaswitch infringed certain patents owned by GENBAND. Following unsuccessful mediation, a trial took place and on January 15, 2016 the jury awarded approximately $8,168,000 in past royalty damages to GENBAND, which neither GENBAND nor the Company has recorded. On September 29, 2016, the court confirmed the jury verdict following motions from both parties. GENBAND is seeking additional royalty and other damages and has appealed a ruling of the court denying a permanent injunction against continued infringement by Metaswitch. GENBAND appealed the denial of its request for a permanent injunction and presented oral argument on this issue before the U.S. Court of Appeals for the Federal Circuit on June 8, 2017. On July 10, 2017, the U.S. Court of Appeals for the Federal Circuit vacated the lower court’s denial of a permanent injunction and remanded the case for further consideration of GENBAND’s request for a permanent injunction. On December 18, 2017, the lower court held a hearing on all remaining issues regarding the appeal. All briefing for reconsideration has been completed and the court’s decision is pending.

A second lawsuit was filed on July 7, 2014 by Metaswitch against GENBAND in which both parties asserted claims of patent infringement against each other. The trial for the second lawsuit concluded on March 17, 2016 with no damages awarded to either party. The court entered a final judgment on April 14, 2016 awarding GENBAND its costs as the prevailing party. On August 28, 2017, the court denied all parties’ motions for judgment as a matter of law and for a new trial. On October 26, 2017, the court granted GENBAND’s motion for bill of costs and awarded GENBAND approximately $315,000 against Metaswitch, which was subsequently recorded by the Company in early 2018, when received.

On June 2, 2016, the federal district court signed an order lifting a stay and severing and consolidating various non-patent claims and counterclaims that were previously stayed in the first two lawsuits into a third lawsuit. On March 28, 2017, the court dismissed all parties’ claims in this third lawsuit without prejudice, concluding that it lacked subject-matter jurisdiction over GENBAND’s claims, declining to exercise jurisdiction over Metaswitch’s federal Lanham Act counterclaim, and dismissing Metaswitch’s remaining counterclaims concluding that it lacked subject-matter jurisdiction over those claims. Immediately following the dismissal of this federal court action on March 28, 2017, GENBAND filed a petition against Metaswitch in Texas state court asserting the claims that GENBAND had previously asserted in the federal court action. Metaswitch filed its answer on April 21, 2017 and asserted counterclaims against GENBAND. On August 16, 2017, Metaswitch then amended its counterclaims against GENBAND. A hearing on discovery motions was held on January 4, 2018. The Texas state court has issued a scheduling order setting trial for this case in November 2018. At this time, it is not possible to predict the outcome of the litigation, but the Company does not expect the results of these Metaswitch-related matters to have a material adverse effect on its business or consolidated financial statements.

In addition, the Company is often a party to disputes and legal proceedings that it considers routine and incidental to its business. Management does not expect the results of any of these actions to have a material effect on the Company's business or consolidated financial statements.