Autodesk 2001 Annual Report Download - page 28

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Autodesk, Inc. FY 01
strict measures to monitor channel inventories and to pro-
vide appropriate reserves, actual product returns may
differ from our reserve estimates, and such differences
could harm our business.
If we are not able to adequately protect our pro-
prietary rights, our business could be harmed.
We rely on a combination of patents, copyright and trade-
mark laws, trade secrets, confidentiality procedures and
contractual provisions to protect our proprietary rights.
Despite such efforts to protect our proprietary rights,
unauthorized parties from time to time have copied
aspects of our software products or have obtained and
used information that we regard as proprietary. Policing
unauthorized use of our software products is time-
consuming and costly. While we have recovered some rev-
enues resulting from the unauthorized use of our software
products, we are unable to measure the extent to which
piracy of our software products exists, and software piracy
can be expected to be a persistent problem. Furthermore,
our means of protecting our proprietary rights may not be
adequate, and our competitors may independently
develop similar technology.
We may face intellectual property infringement
claims that could be costly to defend and result
in our loss of significant rights.
We expect that software product developers will be
increasingly subject to infringement claims as the number
of products and competitors in our industry segments
grows and as the functionality of products in different
industry segments overlaps. Infringement, invalidity
claims, or misappropriation claims may be asserted
against us, and any such assertions could harm our busi-
ness. Any such claims, whether with or without merit,
could be time-consuming, result in costly litigation and
diversion of resources, cause product shipment delays, or
require us to enter into royalty or licensing agreements. In
addition, such royalty or license agreements, if required,
may not be available on acceptable terms, if at all, which
would likely harm our business.
We rely on third party technologies and if we are
unable to use or integrate these technologies,
our product and service development may be
delayed.
We rely on certain software that we license from third par-
ties, including software that is integrated with internally
developed software and used in our products to perform
key functions.These third-party software licenses may not
continue to be available on commercially reasonable
terms, and the software may not be appropriately sup-
ported, maintained or enhanced by the licensors. The loss
of licenses to, or inability to support, maintain and
enhance any such software could result in increased costs,
or in delays or reductions in product shipments until
equivalent software could be developed, identified,
licensed and integrated, which could harm our business.
The loss of key personnel or the inability to
attract and retain additional personnel, partic-
ularly in Northern California where we are
headquartered, could harm our business.
Our continued growth and success depends significantly
on the continued service of highly skilled employees.
Competition for these employees in today’s marketplace,
especially in the technology industries,is intense.Our abil-
ity to attract and retain employees is dependent on a
number of factors, including our continued ability to grant
stock incentive awards. The loss of key employees or
inability to recruit new employees would negatively
impact our business. In addition, we may experience
increased compensation costs to attract and retain skilled
personnel.
The transition to a single European currency
could negatively impact our international
operations.
As a result of the introduction of the Euro and during the
transition period, which will end on January 1, 2002, we
will continue to modify the internal systems that will be
affected by this conversion. We may not be able to com-
plete such modifications to comply with Euro require-
ments, which could harm our business. We are currently
evaluating the impact of the introduction of the Euro on
our foreign exchange activities, functional currency desig-
nations, and pricing strategies in the new economic
environment. In addition, we face risks to the extent that
banks and vendors upon whom we rely and their suppliers
are unable to make appropriate modifications to support
our operations with respect to Euro transactions.
Our business could suffer as a result of risks
associated with strategic acquisitions and
investments.
We periodically acquire or invest in businesses, software
products and technologies that are complementary to our
business through strategic alliances, debt and equity
investments, and the like. The risks associated with such
acquisitions or investments include, among others, the dif-
ficulty of assimilating the operations and personnel of the
companies,the failure to realize anticipated synergies, and
the diversion of management’s time and attention. In
addition, such investments and acquisitions may involve
significant transaction-related costs. We may not be suc-
cessful in overcoming such risks and such investments