DIRECTV 2011 Annual Report Download - page 45

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DIRECTV
purchasing power of the population in our markets, including the middle-markets Our business relies on intellectual property, some of which is owned by third
which we are targeting, and materially adversely affect our business. parties, and we may inadvertently infringe patents and proprietary rights of
others.
Because DIRECTV Latin America offers premium pay television
programming, its business may be particularly vulnerable to economic downturns. Many entities, including some of our competitors, have or may obtain patents
DIRECTV Latin America has in the past experienced, and may in the future and other intellectual property rights that cover or affect products or services related
experience, decreases or instability in consumer demand for its programming and to those that we currently offer or may offer. If a court determines that one or
increases in subscriber credit problems. DIRECTV Latin America’s inability to more of our services or the products used to transmit or receive our services
adjust its business and operations to address these issues could materially adversely infringes on intellectual property owned by others, we and the applicable
affect its revenues and ability to sustain profitable operations. manufacturers or vendors may be required to cease developing or marketing those
services and products, to obtain licenses from the owners of the intellectual
Our ability to keep pace with technological developments is uncertain. property or to redesign those services and products in such a way as to avoid
In our industry, changes occur rapidly as new technologies are developed, infringing the intellectual property rights. If a third party holds intellectual property
which could render our services and products obsolete. We may not be able to keep rights, it may not allow us or the applicable manufacturers to use its intellectual
pace with technological developments. If new technologies on which we focus our property at any price, which could materially adversely affect our competitive
investments fail to achieve acceptance in the marketplace or our technology does position.
not work and requires significant cost to replace or fix, we could suffer a material We may not be aware of all intellectual property rights that our services or the
adverse effect on our future competitive position, which could cause a reduction in products used to transmit or receive our services may potentially infringe. U.S.
our revenues and earnings. Further, after incurring substantial costs, one or more of patent applications are generally confidential until the Patent and Trademark Office
the technologies under development by us or any of our strategic partners could issues a patent. Therefore, we cannot evaluate the extent to which our services or
become obsolete prior to its introduction. the products used to transmit or receive our services may infringe claims contained
Technological innovation depends, to a significant extent, on the work of in pending patent applications. Further, without lengthy litigation, it is often not
technically skilled employees. Competition for the services of these employees has possible to determine definitively whether a claim of infringement is valid.
been vigorous. We may not be able to continue to attract and retain such We cannot estimate the extent to which we may be required in the future to
employees. obtain intellectual property licenses or the availability and cost of any such licenses.
To access technologies and provide products that are necessary for us to remain Those costs, and their impact on our earnings, could be material. Damages in
competitive, we may make future acquisitions and investments and may enter into patent infringement cases may also include treble damages. If we are required to
strategic partnerships with other companies. Such investments may require a pay royalties to third parties, these increased costs could materially adversely affect
commitment of significant capital and human and other resources. The value of our operating results. We are currently being sued in patent infringement actions
such acquisitions, investments and partnerships and the technology accessed may be related to use of technologies in our DTH business. There can be no assurance that
highly speculative. Arrangements with third parties can lead to contractual and the courts will conclude that our services or the products used to transmit or
other disputes and dependence on others for the development and delivery of receive our services do not infringe on the rights of third parties, that we or the
necessary technology that we may not be able to control or influence. Such manufacturers would be able to obtain licenses from these persons on commercially
relationships may commit us to technologies that are rendered obsolete by other reasonable terms or, if we were unable to obtain such licenses, that we or the
developments or preclude the pursuit of other technologies which may prove to be manufacturers would be able to redesign our services or the products used to
superior. transmit or receive our services to avoid infringement. The final disposition of these
claims is not expected to have a material adverse effect on our consolidated
financial position, but could possibly be material to our consolidated results of
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