AMD 2014 Annual Report Download - page 38

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 our business 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. For example, on January 15, 2014
and March 20, 2014, complaints were filed against us seeking damages for alleged securities law violations,
which are described in Note 16 of our consolidated financial statements. We also sell products to consumers,
which could increase our exposure to consumer actions such as product liability claims. On occasion, we receive
claims that individuals were allegedly exposed to substances used in our former semiconductor wafer
manufacturing facilities and that this alleged exposure caused harm. Litigation can involve complex factual and
legal questions, and its outcome is uncertain. Any claim that is successfully asserted against us, including claims
in the January 15, 2014 and March 20, 2014 complaints filed against us, may result in the payment of damages
that could be material to our business.
With respect to intellectual property litigation, from time to time, we have been notified of, or third parties
may bring or have brought, actions against us and/or against our customers based on allegations that we are
infringing the intellectual property rights of others, contributing to or inducing the infringement of the
intellectual property rights of others, improperly claiming ownership of intellectual property or otherwise
improperly using the intellectual property of others. If any such claims are asserted, we may seek to obtain a
license under the third parties’ 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. These parties may file lawsuits against us or our
customers seeking damages (potentially up to and including treble damages) or an injunction against the sale of
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 which 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 could 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, could cause delays in product release or shipment and/or 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.
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