In July 2005, Forgent initiated litigation against 15 companies for infringement
of the United States Patent No. 6,285,746 in the United States District Court
for the Eastern District of Texas, Marshall Division, seeking injunctive relief
against sales of infringing products and monetary damages, among other relief
sought. The defendants include Cable One, Inc., a subsidiary of the Washington
Post Company; Charter Communications, Inc.; Comcast Corporation; Cox
Communications, Inc., a subsidiary of Cox Enterprises, Inc.; EchoStar
Communications Corporation; The DIRECTV Group, Inc.; Time Warner Inc.;
Scientific-Atlanta Inc.; Motorola Inc.; Diego, Inc.; and their respective
subsidiaries. Forgent dismissed six defendants from the lawsuit since they had
no operational role with respect to infringement: Cox Communications, Inc.;
DIRECTV Group, Inc.; DIRECTV Enterprises, LLC; DIRECTV Operations, LLC; EchoStar
Communications Corporation; and EchoStar DBS Corporation. No settlements
accompanied these dismissals and there have been no other settlements to date in
this litigation. The '746 Litigation has since been moved to the United States
District Court for the Eastern District of Texas, Tyler Division.

On October 2, 2006, the United States Patent and Trademark Office ("USPTO")
granted Motorola Inc.'s petition and ordered an inter partes re-examination of
the '746 patent. On October 26, 2006, the USPTO issued its first office action
related to this re-examination. This first action, which is not the final
conclusion of the re-examination, rejected the five claims in the '746 patent.
Forgent responded to the USPTO and anticipates working to vigorously defend all
of the claims of the '746 patent.

On November 9, 2006, Forgent and the defendants in the '746 Litigation appeared
before the Court and presented arguments relating to claims construction, a
motion for summary judgment and a motion to stay the litigation. On November
20, 2006, the Court denied the motion to stay the litigation. On February 16,
2007, the Court denied the defendants' motion for summary judgment for
invalidity and the Court issued its claims construction ruling. Various other
motions are currently pending against Forgent, including some which seek summary
judgment. The Company has and will continue to respond accordingly. On
February 20, 2007, the Court ordered Forgent and the defendants to mediate by
April 15, 2007. The trial date for the '746 Litigation is set for May 14, 2007.

http://sec.edgar-online.com/2007/03/...