8x8 2009 Annual Report Download - page 14

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trademarks and licenses to protect our intellectually property. As of March 31, 2009, we had 73 United States patents that have
been issued and additional United States and foreign patent applications pending. Our patents expire on dates ranging from
2012 to 2024. We cannot predict whether our pending patent applications will result in issued patents.
To protect our trade secrets and other proprietary information, we require our employees to sign agreements providing for the
maintenance of confidentiality and also the assignment of rights to inventions made by them while in our employ. There can
be no assurance that our means of protecting our proprietary rights in the United States or abroad will be adequate or that
competition will not independently develop technologies that are similar or superior to our technology, duplicate our
technology or design around any of our patents. In addition, the laws of foreign countries in which our products are or may be
sold do not protect our intellectual property rights to the same extent as do the laws of the United States. Our failure to protect
our proprietary information could cause our business and operating results to suffer.
We are also subject to the risks of adverse claims and litigation alleging infringement of the intellectual property rights of
others. Such claims and litigation could require us to expend substantial resources and distract key employees from their
normal duties, which could have a material adverse effect on our operating results, cash flows and financial condition. The
communications and software industries are subject to frequent litigation regarding patent and other intellectual property rights.
Moreover, the VoIP service provider community is increasingly becoming a target of patent holders. There is a risk that we
will be a target of assertions of patent rights and that we may be required to expend significant resources to investigate and
defend against such assertions of patent rights. For example, on April 22, 2009, 8x8 was named as a defendant, along with
Comcast, Microsoft, Avaya, Embarq, and Qwest, in a complaint filed by Web Telephony, LLC in the Eastern District of Texas.
On April 29, 2009, we entered into a settlement agreement with Web Telephony, which filed a motion to dismiss the lawsuit on
May 8, 2009. Also, on May 2, 2008, we received a letter from AT&T Intellectual Property, L.L.C. (“AT&T IP”) expressing
the belief that we must license a specified patent for use in our 8x8 broadband telephone service, as well as suggesting that we
obtain a license to its portfolio of MPEG-4 patents for use with our video telephone products and services. At the same time,
we began an evaluation of whether AT&T IP’ s affiliated entities may need to license any of our patents or other intellectual
property. We have continued to engage in discussions with AT&T IP to explore a mutually agreeable resolution of the parties’
respective assertions regarding these intellectual property issues. We are unable at this time to state whether we will enter into
any license or cross-license agreements with AT&T IP or whether we ultimately anticipate any material effects on our
operating results or financial condition as a consequence of these matters.
We rely upon certain technology, including hardware and software, licensed from third parties. There can be no assurance that
the technology licensed by us will continue to provide competitive features and functionality or that licenses for technology
currently utilized by us or other technology which we may seek to license in the future will be available to us on commercially
reasonable terms or at all. The loss of, or inability to maintain, existing licenses could result in shipment delays or reductions
until equivalent technology or suitable alternative products could be developed, identified, licensed and integrated, and could
harm our business. These licenses are on standard commercial terms made generally available by the companies providing the
licenses. To date, the cost and terms of these licenses individually has not been material to our business.
Information about Segments and Geographic Areas
We have only one reportable segment. Financial information relating to our product lines and information on revenues
generated in different geographic areas are set forth in Note 6 to our consolidated financial statements contained in Part II, Item
8 of this Report.
Employees
As of March 31, 2009, our workforce consisted of 244 employees. None of our employees are represented by a labor union or
are subject to a collective bargaining arrangement.
Executive Officers of the Registrant
Our executive officers as of the date of this report are listed below.
Bryan R. Martin, Chairman and Chief Executive Officer. Bryan R. Martin, age 41, has served as our Chairman
since December 2003. Mr. Martin has served as Chief Executive Officer and as a director of the Company since February
2002. From March 2007 to November 2008, he served as President of the Company. From February 2001 to February 2002,
he served as President and Chief Operating Officer and a director of the Company. He served as Senior Vice President,
Engineering Operations from July 2000 to February 2001 and as the Company’ s Chief Technical Officer from August 1995 to
August 2000. He also served as a director of the Company from January 1998 through July 1999. In addition, Mr. Martin