Cricket Wireless 2011 Annual Report Download - page 44

We May Not Be Successful in Protecting and Enforcing Our Intellectual Property Rights.
We rely on a combination of patent, service mark, trademark, and trade secret laws and contractual
restrictions to establish and protect our proprietary rights, all of which offer only limited protection. We endeavor
to enter into agreements with our employees and contractors and agreements with parties with whom we do
business in order to limit access to and disclosure of our proprietary information. Despite our efforts, the steps we
have taken to protect our intellectual property may not prevent the misappropriation of our proprietary rights.
Moreover, others may independently develop processes and technologies that are competitive to ours. The
enforcement of our intellectual property rights may depend on any legal actions that we undertake against such
infringers being successful, but we cannot be sure that any such actions will be successful, even when our rights
have been infringed.
We cannot assure you that our pending, or any future, patent applications will be granted, that any existing
or future patents will not be challenged, invalidated or circumvented, that any existing or future patents will be
enforceable, or that the rights granted under any patent that may issue will provide us with any competitive
advantages.
In addition, we cannot assure you that any trademark or service mark registrations will be issued with
respect to pending or future applications or that any registered trademarks or service marks will be enforceable or
provide adequate protection of our brands. Our inability to secure trademark or service mark protection with
respect to our brands could have a material adverse effect on our business, financial condition and results of
operations.
We Use Equipment, Software, Technology and Content in the Operation of Our Business Which May
Subject Us to Third-Party Infringement Claims.
The technologies used in the telecommunications industry are protected by and subject to a wide array of
patents and other intellectual property rights. As a result, third parties have asserted and may in the future assert
infringement claims against us or our suppliers based on our or their general business operations and the
equipment, software, technology or other content that we or they use or provide. Due in part to the expansion and
development of our business operations, we have become subject to increased amounts of litigation, including
disputes alleging patent and other intellectual property infringement relating to the operation of our networks and
our sale of handsets and other devices. See “Part I - Item 3. Legal Proceedings - Patent Litigation” of this report
for a description of certain patent infringement lawsuits that have been brought against us. If plaintiffs in any
patent litigation matters brought against us were to prevail, we could be required to pay substantial damages or
settlement costs, and we could be required to alter the way we conduct business to avoid future infringement,
which could have a material adverse effect on our business, financial condition and results of operations.
In addition, we rely on third-party intellectual property and digital content to provide certain of our wireless
services to customers, including Muve Music, an unlimited music download service we offer that is designed
specifically for mobile handsets. The Muve Music service requires us to license music and other intellectual
property rights of third parties. We cannot guarantee that these licenses will continue to be available to us on
commercially reasonable terms or at all. Our licensing arrangements with these third parties are generally short-
term in nature and do not guarantee the continuation or renewal of these arrangements on reasonable terms, if at
all. Our inability to continue to offer customers a wide variety of content at reasonable costs to us could limit the
success of our Muve Music service. In addition, we could become subject to infringement claims and potential
liability for damages or royalties related to music and intellectual property rights of third parties, including as a
result of any unauthorized access to the third-party content we have licensed.
We generally have indemnification agreements with the manufacturers, licensors and vendors who provide
us with the equipment, software and technology that we use in our business to help protect us against possible
infringement claims. However, we do not have indemnification arrangements with all of our partners and
suppliers. In addition, to the extent that there is an indemnification arrangement in place, depending on the nature
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