Autodesk 2008 Annual Report Download - page 87

market is characterized by vigorous competition in each of the vertical markets in which we compete, both from
existing competitors and by entry of competitors with innovative technologies. Competition is increasingly
enhanced by consolidation of companies with complementary products and technologies. In addition, some of
our competitors in certain markets have greater financial, technical, sales and marketing and other resources that
we do. See Item 1A, “Risk Factors,” for further discussion of risks regarding competition.
Because of these and other factors, competitive conditions in these industries are likely to continue to
intensify in the future. Increased competition could result in price reductions, reduced net revenue and profit
margins and loss of market share, any of which could harm our business. Furthermore, in certain markets, some
of our competitors have greater financial, technical, sales and marketing and other resources.
We believe that our future results depend largely upon our ability to offer new products and to continue to
provide existing product offerings that compete favorably with respect to ease of use, reliability, performance,
range of useful features, continuing product enhancements, reputation, price and training.
INTELLECTUAL PROPERTY AND LICENSES
We maintain an active program to legally protect our investment in technology through intellectual property
rights. We protect our intellectual property through a combination of patents, copyright and trademark laws, trade
secrets, confidentiality procedures and contractual provisions. The nature and extent of legal protection
associated with each such intellectual property right depends on, among other things, the type of intellectual
property right and the given jurisdiction in which such right arises. We believe that our intellectual property
rights are valuable and important to our business, including each of our segments.
Nonetheless, our intellectual property rights may not be successfully asserted in the future or may be
invalidated, circumvented or challenged. In addition, the laws of various foreign countries where our products are
distributed do not protect our intellectual property rights to the same extent as U.S. laws. Enforcement of
intellectual property rights against alleged infringers can sometimes lead to costly litigation and counterclaims.
Our inability to protect our proprietary information could harm our business.
From time to time, we receive claims alleging infringement of a third party’s intellectual property rights,
including patents. Disputes involving our intellectual property rights or those of another party have in the past
and may in the future lead to, among other things, costly litigation or product shipment delays, which could harm
our business.
We retain ownership of software we develop. All software is licensed to users and provided in object code
pursuant to either shrink-wrap, embedded or on-line licenses, or signed license agreements. These agreements
contain restrictions on duplication, disclosure and transfer.
We believe that because of the limitations of laws protecting our intellectual property and the rapid, ongoing
technological changes in both the computer hardware and software industries, we must rely principally upon
software engineering and marketing skills to maintain and enhance our competitive market position.
While we have recovered some revenue resulting from the unauthorized use of our software products, we
are unable to measure the full extent to which piracy of our software products exists. We believe, however, that
software piracy is and can be expected to be a persistent problem that negatively impacts our revenue.
In addition, through various licensing arrangements, we receive certain rights to intellectual property of
others. We expect to maintain current licensing arrangements and to secure licensing arrangements in the future,
as needed and to the extent available on reasonable terms and conditions, to support continued development and
sales of our products and services. Some of these licensing arrangements require or may require royalty
payments and other licensing fees. The amount of these payments and fees may depend on various factors,
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2008 Annua
l Report