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Note 7 - Contingencies
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6 Months Ended |
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Sep. 30, 2012
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| 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.
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