Blackberry 2012 Annual Report Download - page 72

Government regulations applicable to the Company’s products and services may provide opportunities for competitors or limit
industry growth. For example, some of the Company’s competitors do not have the same level of encryption in their technology and
some competitors may be subject to less stringent controls on the export, import, and use of encryption technologies in certain
markets. Also, several countries have adopted legislation authorizing the circumvention of encryption measures in limited
circumstances. These legislative provisions could potentially be used by competitors to attempt to reverse engineer or find
vulnerabilities in RIM’s products and services. As a result, these competitors may be able to compete more effectively than the
Company can in those markets. In addition, the United States, Canada and other countries have imposed export controls that prohibit
the export of encryption technology to certain countries, entities and individuals. The Company’s failure to comply with export,
import, and use laws and regulations concerning encryption technology could subject the Company to sanctions and penalties,
including fines, and suspension or revocation of export or import privileges.
Regulatory initiatives throughout the world can also create new and unforeseen regulatory obligations on the Company, its products
and services. For example, a change to the regulatory classification of the Company’s products and services, such as content, taxation,
and licensing requirements, could place regulatory obligations commonly reserved for licensed telecommunications carriers or
broadcasters on the Company. The impact of these potential obligations vary based on the jurisdiction, but any such changes could
impact whether the Company enters, maintains or expands its presence in a particular market, and whether the Company must
dedicate additional resources to comply with these obligations.
In addition, governments are increasingly imposing requirements on entities like RIM to facilitate controls over the content that users
have access to on their mobile devices. Examples include content filtering laws or laws designed to prevent a company’s products or
services from being used to infringe third party intellectual property such as copyright in artistic performances. Also, numerous
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urisdictions impose content filtering requirements to prevent access to content deemed restricted based on the norms and laws of that
particular jurisdiction. Furthermore, the Company may be required to pay copyright levies on products and services used by
consumers to copy or stream copyrighted works. Non-compliance with these legal requirements could result in fines, imprisonment of
local executives, and sanctions on the import and/or use of the Company’s products or services.
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