DROPBOX, INC.

ITEM 1. LEGAL PROCEEDINGS

Legal Proceedings

We are currently involved in, and may in the future be involved in, legal proceedings, claims, inquiries, and government investigations in the ordinary course of business, including legal proceedings with third parties asserting infringement of their intellectual property rights, regulatory matters and commercial disputes.

On July 19, 2019 and July 23, 2021, Motion Offense, LLC (“Motion Offense”) filed patent infringement suits in the Western District of Texas (Waco Division) asserting infringement of a total of six patents. These lawsuits were consolidated in September 2021 (“the Consolidated Action”). In April 2023, Motion Offense filed a third patent infringement lawsuit involving one patent, which was not consolidated into the Consolidated Action.

The Consolidated Action had a jury trial in May 2023, and the jury found in favor of Dropbox on all counts including non-infringement and invalidity of the patents and awarded no damages to Motion Offense. In August 2024, the court entered judgment in line with the May 2023 verdict. The parties completed briefing on Motion Offense’s post-trial motions and are awaiting the court to schedule a hearing and issue a decision. The final judgment in the district court may be appealed to the Federal Circuit.

In Motion Offense’s third patent infringement suit, the parties filed their initial pleadings but the case is currently stayed pending Dropbox’s Inter Partes Review (“IPR”) of the asserted patent. On June 30 and July 1, 2025, the Patent Trial and Appeal Board issued Final Written Decisions in the IPRs determining the challenged and asserted claims unpatentable. Motion Offense filed Notices of Appeal with the Federal Circuit and its opening appeal briefs are due in December 2025. Dropbox believes Motion Offense’s allegations in the third lawsuit are similarly without merit and will vigorously defend against them.

In addition, in December 2022, Entangled Media, LLC filed a patent infringement suit against Dropbox in the Western District of Texas (Austin Division). The complaint alleges that Dropbox infringes two patents (U.S. Patent Nos. 8,296,338 and 8,484,260). In June 2023, the case was transferred to the Northern District of California (San Jose Division). In August 2025, the court granted-in-part Dropbox’s Motion for Summary Judgment, finding that Dropbox does not infringe one of the asserted patents (No. 8,484,260). One patent remains for trial. The trial is currently set for March 16, 2026. Dropbox believes it has meritorious defenses and plans to vigorously defend this matter.

While we remain confident in the Company’s defenses to the asserted allegations in these cases, it is not possible to determine the ultimate outcome at this time, however, we do not believe any potential loss would be material to our financial position or results of operations.

Future litigation may be necessary, among other things, to defend ourselves or our users by determining the scope, enforceability, and validity of third-party proprietary rights or to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.