| Commitments and Contingencies | 3 Months Ended |
| Sep. 29, 2013 |
| Commitments And Contingencies Disclosure [Abstract] | ' |
| Commitments and Contingencies | ' |
| 7. Commitments and Contingencies |
| Litigation |
| Broadcom Patent Infringement Litigation |
| On September 14, 2009, Broadcom Corporation (Broadcom) filed a patent infringement lawsuit against the Company in the United States District Court in the Central District of California (District Court). The original complaint alleged infringement by the Company of ten Broadcom patents covering certain data and storage networking technologies. On January 11, 2010, the District Court set a trial date of September 20, 2011. On February 23, 2010, Broadcom filed a first amended complaint adding allegations of infringement for one additional Broadcom patent. The first amended complaint sought unspecified damages and injunctive relief. On March 25, 2010, the Company filed its answer and affirmative defenses to the first amended complaint alleging that it believed that the Broadcom patents at issue were invalid or not infringed, or both. In addition, the Company asserted counterclaims for declaratory judgment of invalidity and non-infringement against each of the Broadcom patents at issue, and sought award of attorney’s fees, costs and expenses. |
| On May 26, 2010, Broadcom filed a separate patent infringement lawsuit again the Company in the District Court. The 2010 lawsuit alleged infringement of a Broadcom patent covering certain data and storage networking technologies by certain Emulex products. Broadcom sought a judgment for damages, injunctive relief, and an award of attorneys’ fees and costs. |
| On June 30, 2010, the District Court consolidated the 2009 and 2010 patent cases into a single case. On October 14, 2010, the District Court issued an order on the parties’ joint stipulation dismissing three patents from the case. On November 1, 2010, the District Court issued an order allowing Broadcom to make infringement assertions against additional Emulex products. In a District Court ruling dated December 17, 2010, the District Court provided interpretations of certain terms contained in the claims of the patents being asserted by Broadcom. In February and May 2011, the District Court issued separate orders on the parties’ joint stipulations collectively dismissing two patents from the case (leaving seven patents in the case). The District Court heard the parties’ respective motions for summary judgment and subsequently issued a ruling on August 3, 2011 barring Broadcom’s claim for infringement on one patent, leaving six patents in the case. On August 25, 2011, the Company met with a mediator and representatives of Broadcom concerning potential settlement of the case. On September 2, 2011, the parties submitted a joint summary of the mediation proceedings in which they stated that the mediation proceedings continued for a full day, but the parties were unable to reach a settlement agreement. |
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| After a nearly three week trial that ended October 6, 2011, the jury reached a partial verdict involving two out of the six patents. The District Court determined that one of the patents (U.S. Patent 7,058,150) [the ‘150 patent] had been infringed by Emulex, and the jury rendered an advisory verdict on October 12, 2011 to the District Court that it is not invalid, and awarded approximately $0.4 million in damages with respect to that patent. The jury reached a unanimous verdict of non-infringement on another patent relating to Emulex Fibre Channel switch products. A mistrial was declared concerning the remaining four patents (U.S. Patent 7,471,691) [the ‘691 patent] and (U.S. Patent 6,424,194; 7,486,124; and 7,724,057) [collectively, the ‘194 Patent family], for which no unanimous verdict was reached. On December 15, 2011, the District Court issued judgments as a matter of law (JMOL) that the two patents, on which the jury had rendered advisory verdicts, were not invalid. On December 16, 2011, the District Court issued an additional JMOL that the ‘691 Patent had been infringed by Emulex. The ‘150 Patent, particularly Claim 8 considered at the trial, pertains to the use of multiple lanes of phase interpolators, and products that utilize clock and data recovery (CDR) circuits in SerDes modules on an application specific integrated circuit (ASIC). The ‘691 Patent, particularly Claim 7 considered at the trial, pertains to Fibre Channel arbitrated loop switch crossbars and scoreboards, and products that utilize specialized ASICs used in storage arrays and pass-through modules. The Company filed an appeal for both the ‘150 Patent and ‘691 Patent infringement findings with the U.S. Court of Appeals for the Federal Court (Appeals Court), who affirmed the jury’s and District Court’s findings. |
| On March 16, 2012, the District Court issued a decision concerning injunctive relief for the ‘150 and ‘691 patents. The decision provided, in part, for a sunset period of 18 months relating to the ‘150 patent, starting on October 12, 2011. The decision further provided for a sunset period of 18 months relating to the ‘691 patent, starting on December 16, 2011. The affected products for the ‘150 patent include the BE2, BE3, XE201, and SOC 442 ASICs, and products containing them, and products not colorably different from them. The affected products for the ‘691 patent include the SOC 320, SOC 422, and SOC 442 ASICs, products containing them, and products not colorably different from them. The sunset period allows the Company to sell the affected products to existing customers for specific customer devices, subject to limitations relating to when the products had been qualified and when certain firm orders had been placed. The decision further provided for the Company to pay a royalty of nine percent on all sales of such products made during the sunset period, and also provided that foreign sales (outside the U.S.) are beyond the scope of the suit. On April 3, 2012, the District Court issued a permanent injunction (2012 Permanent Injunction) which, with respect to both the ‘150 and ‘691 patents, further describe the prohibited activities, contain sunset provision terms including royalty rates and computations, limit the territory to allow sales of products that are manufactured outside the U.S. to customers located outside the U.S., permit design around efforts including modifications and design, development, and testing to eliminate infringement, and permit service and technical support for certain products. |
| On May 30, 2012, the District Court issued an order requiring the parties to submit the Appendix to the 2012 Permanent Injunction, and excluded from the sunset provision any customer who is a distributor and not an OEM, with distributor exceptions for needs of an end user affecting health of the public, public safety, and governmental agencies engaged in the national defense. The May 30, 2012, order provided that, not later than 90 days from the date of that order, Broadcom may move the District Court for exclusion of certain device/customer product combinations from the Appendix. An Appendix was filed by Emulex and Broadcom with the District Court under seal on June 10, 2012. The current Permanent Injunction permits major OEMs to obtain continued supply beyond the sunset period, providing them time to re-qualify products resulting from the design around efforts. |
| On July 3, 2012, Broadcom and the Company entered into a Patent License and Release Agreement (Settlement Agreement) pursuant to which both parties agreed to settle and release certain claims related to the patent infringement litigation in exchange for a lump sum payment of approximately $58.0 million. The Settlement Agreement provided for certain amendments to the 2012 Permanent Injunction, and dismissals of certain allegations of the lawsuit, including portions of the scheduled re-trial. The Company also received a worldwide limited license to the ‘691 patent, the ‘150 patent, the ‘194 patent and related families for certain fields of use including Fibre Channel applications. The fields of use licensed to Emulex are related, in part, to the Emulex XE201 (Lancer) ASICs, that are capable of Fibre Channel and Ethernet, 16Gbps Fibre Channel HBAs, Fibre Channel SOCs and other Fibre Channel products. On July 18, 2012, pursuant to the Settlement Agreement, the District Court issued an amended Permanent Injunction with an amended appendix, and approved a stipulation to dismiss certain allegations in the lawsuit. The amended Permanent Injunction provides for a sunset provision under which the injunction was stayed until April 11, 2013, subject to limitations. The current Permanent Injunction permits certain major OEMs to obtain continued supply beyond the sunset period, providing them time to re-qualify products resulting from the design around efforts. |
| On February 1, 2013, the District Court announced that it had reset the start date for the retrial relating to the ‘194 patent family from April 2, 2013 to November 5, 2013. On July 10, 2013, the Court made a determination not to hold the retrial on November 5, 2013, and a new retrial date is pending. The District Court has not issued any rulings with respect to these remaining three patents. |
| During the first quarter of fiscal 2013, the Company made a payment of approximately $58.0 million to Broadcom pursuant to the Settlement Agreement, approximately $36.8 million of which was expensed in fiscal 2012. The remainder of approximately $21.2 million was recorded as prepaid license fees and is being amortized to cost of goods sold over the ten year license term in proportion to the estimated future revenues of such licensed technology. As of September 29, 2013, the unamortized prepaid license fee was approximately $16.1 million, of which approximately $4.0 million was recorded in prepaid expenses and other current assets and approximately $12.1 million was recorded in other assets. The Company recognized approximately $1.0 million of amortization expense related to such prepaid license fees during the three months ended September 29, 2013 and September 30, 2012. |
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| While the Company has contractual commitments from its suppliers concerning the defense and indemnification of certain Broadcom claims relating to certain technology provided by such suppliers, it cannot be certain that such defense and indemnification obligations will be honored by such suppliers. This lawsuit continues to present risks with respect to U.S. sales of certain Ethernet products that could have a material adverse effect on the Company’s business, financial condition, or results of operations, including loss of patent rights, monetary damages, potential reimbursement of customer indemnification liabilities or royalty obligations, and injunction against the sale of accused products. The Company continues to present a vigorous defense against this on-going lawsuit, as well as the previous infringement verdicts, damages and judgments. Through September 29, 2013, the Company has incurred approximately $14.7 million of mitigation, product redesign and appeal related expenses, of which approximately $2.5 million and $0.5 million were recorded during the three months ended September 29, 2013 and September 30, 2012, respectively. The Company expects to incur incremental mitigation, product redesign, appeal related expenses during the remainder of fiscal 2014 in the range of $3 million to $5 million. In addition, engineering and development costs will include expenses for activities to redesign, design around, modify, design, develop, test and requalify certain of the affected products during the sunset period, and to implement the end of life processes in the U.S. for certain other affected products. Sales and marketing costs are likely to include expenses for customer support, pre-production samples, education and training, and other miscellaneous costs. General and administrative costs will include expenses for the Company’s appeal of the previous verdicts and judgments. In addition, the Company has agreed to participate in certain customer royalty obligations arising under license agreements with Broadcom with respect to the infringing products. Through September 29, 2013, the Company has recorded approximately $1.4 million in cost of sales related to such customer obligations, of which approximately $0.5 million was recorded in cost of sales for the three months ended September 29, 2013. Emulex may incur additional amounts related to these obligations in the range of $2 million to $6 million during the remainder of fiscal 2014, all of which will reduce gross margins in the periods accrued. |
| The Company is currently unable to determine whether any further loss will occur related to the ongoing portion of this litigation or to estimate the range of any such further loss. |
| In addition to the ongoing litigation discussed above, the Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of the open matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity. |
| Commitments and Contingencies |
| As of September 29, 2013, the Company has approximately $42.7 million of liabilities for uncertain tax positions for which reasonable reliable estimate of the period of payment cannot be made. See Note 10. |
| The Company has entered into various agreements, including agreements for professional services, product development alignment activities, non-recurring engineering, and purchases of inventory. As of September 29, 2013, the Company’s obligation associated with such agreements was approximately $48.9 million. |
| Emulex provides letters of credit or bank guarantees in the normal course of business as required by certain vendors. As of September 29, 2013, there were approximately $0.7 million in outstanding letters of credit and bank guarantees of which approximately $0.2 million were secured by restricted cash deposits that have been classified within prepaid expenses and other current assets in the accompanying balance sheet. Approximately $0.5 million of outstanding letters of credit and bank guarantees are not secured. |
| In addition, the Company provides limited indemnification in selected circumstances within its various customer contracts whereby the Company indemnifies the parties to whom it sells its products with respect to the Company’s product infringement of certain intellectual property, and in some limited cases against bodily injury or damage to real or tangible personal property caused by a defective Company product. It is not possible to predict the maximum potential amount of future payments under these or similar agreements, due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. As of September 29, 2013, the Company has not incurred any significant costs related to contractual indemnification of its customers. |
