Adaptec 2006 Annual Report Download - page 30

Table of Contents
Our estimated restructuring accruals may not be adequate.
In 2005 and 2006, we implemented restructuring plans to streamline production and reduce and reallocate operating costs. In 2001 and 2003, we implemented
plans to restructure our operations in response to the decline in demand for our networking products. We reduced the workforce and consolidated or shut down
excess facilities in an effort to bring our expenses into line with our reduced revenue expectations.
While management uses all available information to estimate these restructuring costs, particularly facilities costs, our accruals may prove to be inadequate. If
our actual sublease revenues or the results of our exiting negotiations differ from our assumptions, we may have to record additional charges, which could
materially affect our results of operations, financial position and cash flow.
From time to time, we become defendants in legal proceedings about which we are unable to assess our exposure and which could become significant
liabilities upon judgment.
We become defendants in legal proceedings from time to time. Companies in our industry have been subject to claims related to patent infringement and product
liability, as well as contract and personal claims. We may not be able to accurately assess the risk related to these suits, and we may be unable to accurately
assess our level of exposure. These proceedings may result in material charges to our operating results in the future if our exposure is material and if our ability to
assess our exposure becomes clearer.
If we cannot protect our proprietary technology, we may not be able to prevent competitors from copying our technology and selling similar products,
which would harm our revenues.
To compete effectively, we must protect our intellectual property. We rely on a combination of patents, trademarks, copyrights, trade secret laws, confidentiality
procedures and licensing arrangements to protect our intellectual property rights. We hold numerous patents and have a number of pending patent applications.
We might not succeed in obtaining patents from any of our pending applications. Even if we are awarded patents, they may not provide any meaningful
protection or commercial advantage to us, as they may not be of sufficient scope or strength, or may not be issued in all countries where our products can be sold.
In addition, our competitors may be able to design around our patents.
We develop, manufacture and sell our products in Asian and other countries that may not protect our products or intellectual property rights to the same extent as
the laws of the United States. This makes piracy of our technology and products more likely. Steps we take to protect our proprietary information may not be
adequate to prevent theft of our technology. We may not be able to prevent our competitors from independently developing technologies that are similar to or
better than ours.
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Source: PMC SIERRA INC, 10-K, March 01, 2007 Powered by Morningstar® Document Research℠