AMD 2009 Annual Report Download - page 40

customer satisfaction issues because any time products are purchased outside our authorized distribution channel
there is a risk that our customers are buying counterfeit or substandard products, including products that may
have been altered, mishandled or damaged, or used products represented as new.
If we cannot adequately protect our technology or other intellectual property in the United States and
abroad, through patents, copyrights, trade secrets, trademarks and other measures, we may lose a
competitive advantage and incur significant expenses.
We rely on a combination of protections provided by contracts, including confidentiality and nondisclosure
agreements, copyrights, patents, trademarks and common law rights, such as trade secrets, to protect our
intellectual property. However, we cannot assure you that we will be able to adequately protect our technology or
other intellectual property from third-party infringement or from misappropriation in the United States and
abroad. Any patent licensed by us or issued to us could be challenged, invalidated or circumvented or rights
granted there under may not provide a competitive advantage to us. Furthermore, patent applications that we file
may not result in issuance of a patent or, if a patent is issued, the patent may not be issued in a form that is
advantageous to us. Despite our efforts to protect our intellectual property rights, others may independently
develop similar products, duplicate our products or design around our patents and other rights. In addition, it is
difficult to monitor compliance with, and enforce, our intellectual property on a worldwide basis in a cost-
effective manner. In jurisdictions where foreign laws provide less intellectual property protection than afforded
in the United States and abroad, our technology or other intellectual property may be compromised, and we
would be materially adversely affected.
We are party to litigation and may become a party to other claims or litigation that could cause us to incur
substantial costs or pay substantial damages or prohibit us from selling our products.
From time to time we are a defendant or plaintiff in various legal actions. We also sell products to
consumers, which could increase our exposure to consumer actions such as product liability claims. Litigation
can involve complex factual and legal questions and its outcome is uncertain. Any claim that is successfully
asserted against us may cause us to pay substantial damages.
With respect to intellectual property litigation, from time to time, we have been notified, or third parties may
bring or have brought actions against us, based on allegations that we are infringing the intellectual property
rights of others. If any such claims are asserted against us, we may seek to obtain a license under the third party’s
intellectual property rights. We cannot assure you that we will be able to obtain all of the necessary licenses on
satisfactory terms, if at all. In the event that we cannot obtain a license, these parties may file lawsuits against us
seeking damages (potentially up to and including treble damages) or an injunction against the sale of our
products that incorporate allegedly infringed intellectual property or against the operation of our business as
presently conducted, which could result in our having to stop the sale of some of our products or to increase the
costs of selling some of our products or could damage our reputation. The award of damages, including material
royalty payments, or the entry of an injunction against the manufacture and sale of some or all of our products,
would have a material adverse effect on us. We could decide, in the alternative, to redesign our products or to
resort to litigation to challenge such claims. Such challenges could be extremely expensive and time-consuming
regardless of their merit, cause delays in product release or shipment, and could have a material adverse effect on
us. We cannot assure you that litigation related to our intellectual property rights or the intellectual property
rights of others can always be avoided or successfully concluded.
Even if we were to prevail, any litigation could be costly and time-consuming and would divert the attention
of our management and key personnel from our business operations, which could have a material adverse effect
on us.
32