Cisco 2013 Annual Report Download - page 21

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Patents, Intellectual Property, and Licensing
We seek to establish and maintain our proprietary rights in our technology and products through the use of patents, copyrights,
trademarks, and trade secret laws. We have a program to file applications for and obtain patents, copyrights, and trademarks in
the United States and in selected foreign countries where we believe filing for such protection is appropriate. We also seek to
maintain our trade secrets and confidential information by nondisclosure policies and through the use of appropriate
confidentiality agreements. We have obtained a substantial number of patents and trademarks in the United States and in other
countries. There can be no assurance, however, that the rights obtained can be successfully enforced against infringing
products in every jurisdiction. Although we believe the protection afforded by our patents, copyrights, trademarks, and trade
secrets has value, the rapidly changing technology in the networking industry and uncertainties in the legal process make our
future success dependent primarily on the innovative skills, technological expertise, and management abilities of our
employees rather than on the protection afforded by patent, copyright, trademark, and trade secret laws.
Many of our products are designed to include software or other intellectual property licensed from third parties. While it may
be necessary in the future to seek or renew licenses relating to various aspects of our products, we believe, based upon past
experience and standard industry practice, that such licenses generally could be obtained on commercially reasonable terms.
Nonetheless, there can be no assurance that the necessary licenses would be available on acceptable terms, if at all. Our
inability to obtain certain licenses or other rights or to obtain such licenses or rights on favorable terms, or the need to engage
in litigation regarding these matters, could have a material adverse effect on our business, operating results, and financial
condition. Moreover, inclusion in our products of software or other intellectual property licensed from third parties on a
nonexclusive basis can limit our ability to protect our proprietary rights in our products.
The industry in which we compete is characterized by rapidly changing technology, a large number of patents, and frequent
claims and related litigation regarding patent and other intellectual property rights. There can be no assurance that our patents
and other proprietary rights will not be challenged, invalidated, or circumvented; that others will not assert intellectual
property rights to technologies that are relevant to us; or that our rights will give us a competitive advantage. In addition, the
laws of some foreign countries may not protect our proprietary rights to the same extent as the laws of the United States. The
risks associated with patents and intellectual property are more fully discussed in “Item 1A. Risk Factors,” including the risk
factors entitled “Our proprietary rights may prove difficult to enforce,” “We may be found to infringe on intellectual property
rights of others,” and “We rely on the availability of third-party licenses.”
Employees
Employees are summarized as follows:
July 27, 2013
Employees by geography:
United States ....................................................................... 37,275
Rest of world ....................................................................... 37,774
Total .............................................................................. 75,049
Employees by line item on the Consolidated Statements of Operations:
Cost of sales (1) ...................................................................... 16,349
Research and development ............................................................ 26,416
Sales and marketing .................................................................. 24,938
General and administrative ............................................................ 7,346
Total .............................................................................. 75,049
(1) Cost of sales includes manufacturing support, services, and training.
We consider the relationships with our employees to be positive. Competition for technical personnel in the industry in which
we compete is intense. We believe that our future success depends in part on our continued ability to hire, assimilate, and
retain qualified personnel. To date, we believe that we have been successful in recruiting qualified employees, but there is no
assurance that we will continue to be successful in the future.
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