14. COMMITMENTS AND CONTINGENCIES The Company leases office space for its headquarters in Palo Alto, California under an operating lease, which is due to expire in November 2017. Monthly rent payments on the lease are approximately $40,000. In January 2015, the Company entered into a capital lease for computer equipment that matures in December 2016 with the right to purchase the equipment at maturity for one dollar. Minimum rental commitments under all noncancelable leases with an initial term in excess of one year as of January 31, 2016, were as follows (in thousands): Capital Operating Year Ending January 31, Leases Leases 2017 $ 653 $ 1,802 2018  1,421 2019  45 Total $ 653 $ 3,268 Less: Amount representing interest (21 ) Present value of lease payments 632 Less: Current portion (632 ) Capital leasenet of current portion $  Rent expense was $1.2 million, $0.9 million, and $0.6 million for the years ended January 31, 2016, 2015 and 2014, respectively. In March 2011, the Company entered into a patent license agreement with AT&amp;T Intellectual Property II, L.P. Under the terms of the agreement, the Company is to pay a royalty on a per unit of on-premise appliance sold basis in consideration for the license and release. The royalty is not payable until after 250,000 units are sold. The royalty expense is recorded in cost of revenue, and was not material for any of the periods presented. Legal Matters The Company is party to actions and proceedings incident to the Companys business in the ordinary course of business, including litigation regarding its intellectual property, challenges to the enforceability or validity of its intellectual property, and claims that the Companys products or services infringe on the intellectual property rights of others. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. In managements opinion, there are no contingent liabilities requiring accrual or disclosure as of Ja