Adobe 2007 Annual Report Download - page 34

34
We may not be able to protect our intellectual property rights, including our source code, from third-party infringers, or
unauthorized copying, use, disclosure or malicious attack.
Although we defend our intellectual property rights and combat unlicensed copying and use of software and intellectual
property rights through a variety of techniques, preventing unauthorized use or infringement of our rights is inherently
difficult. We actively pursue software pirates as part of our enforcement of our intellectual property rights, but we
nonetheless lose significant revenue due to illegal use of our software. If piracy activities increase, it may further harm our
business.
Additionally, we take significant measures to protect the secrecy of our confidential information and trade secrets,
including our source code. If unauthorized disclosure of our source code occurs, we could potentially lose future trade secret
protection for that source code. The loss of future trade secret protection could make it easier for third parties to compete with
our products by copying functionality, which could adversely affect our revenue and operating margins. We also seek to
protect our confidential information and trade secrets through the use of non-disclosure agreements with our customers,
contractors, vendors, and partners. However there is a risk that our confidential information and trade secrets may be
disclosed or published without our authorization, and in these situations it may be difficult and or costly for us to enforce our
rights.
We also devote significant resources to maintaining the security of our products from malicious hackers who develop
and deploy viruses, worms, and other malicious software programs that attack our products. Nevertheless, actual or perceived
security vulnerabilities in our products could harm our reputation and lead some customers to seek to return products, to
reduce or delay future purchases, to use competitive products or to make claims against us. Also, with the introduction of
hosted services with some of our product offerings, our customers may use such services to share confidential and sensitive
information. If a breach of security occurs on these hosted systems, we could be held liable to our customers. Additionally,
such breaches could lead to interruptions, delays and data loss and protection concerns as well as harm to our reputation.
We may not realize the anticipated benefits of past or future acquisitions, and integration of these acquisitions may disrupt
our business and management.
We have in the past and may in the future acquire additional companies, products or technologies. We may not realize
the anticipated benefits of an acquisition and each acquisition has numerous risks. These risks include:
• difficulty in assimilating the operations and personnel of the acquired company;
• difficulty in effectively integrating the acquired technologies or products with our current products and technologies;
• difficulty in maintaining controls, procedures and policies during the transition and integration;
• disruption of our ongoing business and distraction of our management and employees from other opportunities and
challenges due to integration issues;
• difficulty integrating the acquired company’ s accounting, management information, human resources and other
administrative systems;
• inability to retain key technical and managerial personnel of the acquired business;
• inability to retain key customers, distributors, vendors and other business partners of the acquired business;
• inability to achieve the financial and strategic goals for the acquired and combined businesses;
• incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our operating
results;
• potential impairment of our relationships with employees, customers, partners, distributors or third-party providers of
technology or products;