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If we are unable to protect our intellectual property rights or are sued by third parties for infringing upon intellectual
property rights, we may incur substantial costs.
Our success and competitive position depends in large part upon our ability to develop and maintain the proprietary aspects of
our technology. We rely on a combination of patent, copyright, trademark, service mark, trade secret laws, confidentiality provisions
and various other contractual provisions to protect our proprietary rights, but these legal means provide only limited protection.
Although a number of patents have been issued to us and we have obtained a number of other patents as a result of our acquisitions,
we cannot assure you that our issued patents will be upheld if challenged by another party. Additionally, with respect to any patent
applications which we have filed, we cannot assure you that any patents will issue as a result of these applications. If we fail to protect
our intellectual property, we may not receive any return on the resources expended to create the intellectual property or generate any
competitive advantage based on it, and we may be exposed to expensive litigation or risk jeopardizing our competitive position.
Similarly, some third parties have claimed and others could claim that our existing and future products or services infringe upon their
intellectual property rights. Claims like these could require us to enter into costly royalty arrangements or cause us to lose the right to
use critical technology.
Our ability to protect our intellectual property rights is also subject to the terms of future government contracts. We cannot
assure you that the federal government will not demand greater intellectual property rights or restrict our ability to disseminate
intellectual property. We are also a member of standards-setting organizations and have agreed to license some of our intellectual
property to other members on fair and reasonable terms to the extent that the license is required to develop non-infringing products.
Pursuing infringers of our patents and other intellectual property rights can be costly.
Pursuing infringers of our proprietary rights could result in significant litigation costs, and any failure to pursue infringers could
result in our competitors utilizing our technology and offering similar products, potentially resulting in loss of a competitive advantage
and decreased revenues. Despite our efforts to protect our proprietary rights, existing patent, copyright, trademark and trade secret
laws afford only limited protection. In addition, the laws of some foreign countries do not protect our proprietary rights to the same
extent as do the laws of the United States. Protecting our know-how is difficult especially after our employees or those of our third
party contract service providers end their employment or engagement. Attempts may be made to copy or reverse-engineer aspects of
our products or to obtain and use information that we regard as proprietary. Accordingly, we may not be able to prevent the
misappropriation of our technology or prevent others from developing similar technology. Furthermore, policing the unauthorized use
of our products is difficult and expensive. Litigation may be necessary in the future to enforce our intellectual property rights or to
determine the validity and scope of the proprietary rights of others. The costs and diversion of resources could significantly harm our
business. If we fail to protect our intellectual property, we may not receive any return on the resources expended to create the
intellectual property or generate any competitive advantage based on it.
Third parties may claim we are infringing their intellectual property rights and we could be prevented from selling our
products, or suffer significant litigation expense, even if these claims have no merit, and our customers also could demand
indemnification for such claims.
Our competitive position is driven in part by our intellectual property and other proprietary rights. Third parties, however, may
claim that we, our products, operations or any products or technology we obtain from other parties are infringing their intellectual
property rights, and we may be unaware of intellectual property rights of others that may cover some of our assets, technology and
products. From time to time we receive letters from third parties that allege we are infringing their intellectual property and asking us
to license such intellectual property. We review the merits of each such letter and respond as we deem appropriate.
From time to time our customers are parties to allegations of intellectual property infringement claims based on solutions which
incorporate our products and services, which may lead to demands from our customers to indemnify them for costs in defending those
allegations. Any litigation regarding patents, trademarks, copyrights or intellectual property rights, even those without merit, and the
related indemnification demands of our customers, can be costly and time consuming, and divert our management and key personnel
from operating our business. The complexity of the technology involved and inherent uncertainty and cost of intellectual property
litigation increases our risks. If any third party has a meritorious or successful claim that we are infringing its intellectual property
rights, we may be forced to change our products or enter into licensing arrangements with third parties, which may be costly or
impractical. This also may require us to stop selling our products as currently engineered, which could harm our competitive position.
We also may be subject to significant damages or injunctions that prevent the further development and sale of certain of our products
or services and may result in a material loss of revenue.
