Blackberry 2013 Annual Report Download - page 72

Company’s products and services may provide opportunities for competitors or limit industry growth. 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.
Various countries have enacted laws and regulations, adopted controls, license or permit requirements, and restrictions on the export,
import, and use of products or services that contain encryption technology. In addition, from time to time, governmental agencies
have proposed additional requirements for encryption technology, such as requiring the escrow and governmental recovery of private
encryption keys. Restrictions on the sale or distribution of products or services containing encryption technology may prevent the
Company from selling or distributing the BlackBerry wireless solution in certain markets or may require the Company to make
changes to the encryption technology that is embedded in its products or services to comply with such restrictions. Government
restrictions, or changes to the Company’s products or services to comply with such restrictions, could delay or prevent the acceptance
and use of the Company’s products and services. Likewise, restrictions or perceived restrictions may adversely affect the marketing
and sales resources that network carriers and distributors may dedicate to the Company’s products and services.
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 the Company’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.
In addition, governments are increasingly imposing requirements on entities like the Company 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 jurisdictions 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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