12. Commitments and Contingencies Litigation and SEC Investigation From time to time, the Company is involved in claims and legal proceedings that arise in the ordinary course of business. The Company expects that the number and significance of these matters will increase as its business expands. In particular, the Company faces an increasing number of patent and other intellectual property claims as the number of products and competitors in Polycoms industry grows and the functionality of video, voice, data and web conferencing products overlap. Any claims or proceedings against the Company, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time, result in the diversion of significant operational resources, or require the Company to enter into royalty or licensing agreements which, if required, may not be available on terms favorable to the Company or at all. If management believes that a loss arising from these matters is probable and can be reasonably estimated, the Company will record a reserve for the loss. As additional information becomes available, any potential liability related to these matters is assessed and the estimates revised. Based on currently available information, management does not believe that the ultimate outcomes of these unresolved matters, individually and in the aggregate, are likely to have a material adverse effect on the Companys consolidated financial statements. However, litigation is subject to inherent uncertainties, and the Companys view of these matters may change in the future. Were an unfavorable outcome to occur, there exists the possibility of a material adverse impact on the Companys consolidated financial statements for the period in which the unfavorable outcome occurs or becomes probable, and potentially in future periods. In 2015, we did not incur any litigation reserves and payments related to on-going litigation matters. In 2014, the Company recorded $3.1 million in Litigation reserves an