Quarterly report pursuant to Section 13 or 15(d)

Note 7 - Contingencies

Note 7 - Contingencies
6 Months Ended
Sep. 30, 2012
Commitments and Contingencies Disclosure [Text Block]
Note 7 – Contingencies

BreathableBaby, LLC (“BreathableBaby”) filed a complaint against the Company and Crown Crafts Infant Products, Inc. (“CCIP”), a wholly-owned subsidiary of the Company, on January 11, 2012 in the United States District Court for the District of Minnesota, alleging that CCIP’s mesh crib liner infringes BreathableBaby’s patent rights relating to its air permeable infant bedding technology. The Company believes that it has meritorious defenses to the claims asserted in the complaint, and the Company intends to defend itself vigorously against all such claims.  The Company and CCIP filed a motion for summary judgment of non-infringement on May 14, 2012.  On July 25, 2012, the Court entered an order denying that motion without prejudice to refiling it at the close of discovery.  In doing so, the Court did not rule on the merits of the Company’s motion, but instead determined that further discovery was required before a motion for summary judgment could be decided.  Discovery accordingly was resumed and remained ongoing as of September 30, 2012.

CCIP has filed an application for a patent related to its mesh crib liner with the United States Patent and Trademark Office, and, along with other costs related to CCIP’s patent application, the Company has capitalized the defense costs associated with the BreathableBaby litigation in the accompanying consolidated balance sheets.  In the event of an unfavorable outcome with respect to the BreathableBaby litigation or a denial of CCIP’s patent application, the Company would be required to recognize an impairment charge amounting to these accumulated costs.

In addition to the foregoing civil complaint, the Company is, from time to time, involved in various other legal and regulatory proceedings relating to claims arising in the ordinary course of its business.  Neither the Company nor any of its subsidiaries is a party to any such proceeding the outcome of which, individually or in the aggregate, is expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flows.