Commitments and Contingencies Leases As of September 30, 2012 , the Company leased four facilities under operating lease arrangements. The expiration dates of these leases range from May 2014 to April 2015 . Certain leases contain escalation clauses calling for increased rents. The Company recognizes rent expense on a straight-line basis over the lease period and has recorded deferred rent for the difference between rent payments and rent expense recognized. An additional facility is leased on a month-to-month basis. Rent expense was $0.3 million and $0.9 million for the three and nine months ended September 30, 2012 , respectively, and $0.3 million and $0.7 million for the three and nine months ended September 30, 2011 , respectively. In October, 2012, the Company entered into an agreement to lease additional office space. The lease expires in April, 2015 with payments of $21,000 per month over the term. Legal Proceedings On August 28, 2009, DocMagic, Inc., ( DocMagic ), filed a lawsuit against the Company in the U.S. District Court for the Northern District of California ( DocMagic, Inc. v. Ellie Mae, Inc ., Case No. 3:9-CV-4017), which is referred to in this report as the Federal Action, alleging that the Company had engaged in monopolization and/or attempted monopolization of an alleged product market composed of  internet portal[s] providing electronic linkages for mortgage loan closing document preparation services,  and that it is subject to liability for related state court claims for intentional interference with a contractual relationship, interference with prospective economic advantage and unfair competition. DocMagic s claims relate to the August 2009 expiration of a September 2006 Electronic Bridge Agreement pursuant to which DocMagic had been a vendor on the Ellie Mae Network. In addition, DocMagic filed a separate lawsuit against Ellie Mae in the Superior Court of California for the City and County of San Francisco ( DocMagic, Inc. v. Ellie Mae, Inc. , Case No. CGC-9-491986), which is referred to