Enom 2015 Annual Report Download - page 26

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interpreted, in a manner that limits our ability to analyze user data. If requirements regarding the manner in which certain
personal information and other user data are processed and stored change significantly, our business may be adversely
affected, impacting our financial condition and results of operations. In addition, we may be exposed to potential
liabilities as a result of differing views on the level of privacy required for consumer and other user data we collect. We
may also need to expend significant resources to protect against security breaches, including encrypting personal
information, or remedy breaches after they occur, including notifying each person whose personal data may have been
compromised and offering to provide credit monitoring services. Any failure, or perceived failure, by us or various third-
party vendors and service providers to comply with applicable privacy policies or with industry standards or laws or
regulations could result in a loss of consumer confidence in us, or result in actions against us by governmental entities or
others, all of which could potentially cause us to lose consumers and revenue.
Third parties may sue us for intellectual property infringement or misappropriation or make similar claims which, if
successful, could require us to pay significant damages, incur expenses or curtail our offerings.
We cannot be certain that our internally developed or acquired systems and technologies do not and will not
infringe the intellectual property rights of others. In addition, we license content, software and other intellectual property
rights from third parties and may be subject to claims of infringement or misappropriation if such parties do not possess
the necessary intellectual property rights to the products or services they license to us. We have in the past and may in
the future be subject to legal proceedings and claims that we have infringed the patent or other intellectual property
rights of a third party. These claims sometimes involve patent holding companies or other patent owners who have no
relevant product revenue and against whom our own patents may provide little or no deterrence. In addition, third parties
may in the future assert intellectual property infringement claims against our customers, which we have agreed in certain
circumstances to indemnify and defend against such claims. Any intellectual property-related infringement or
misappropriation claims, whether or not meritorious, could result in costly litigation and could divert management
resources and attention. If we are found liable for infringement or misappropriation, we may be required to enter into
licensing agreements, if available on acceptable terms or at all, pay substantial damages or limit or curtail our systems
and technologies. Also, any successful lawsuit against us could subject us to the invalidation of our proprietary rights.
Moreover, we may need to redesign some of our systems and technologies to avoid future infringement liability. Any of
the foregoing could prevent us from competing effectively and increase our costs.
Additionally, our marketplaces allow individuals to sell certain products or their original designs printed on art
prints and various consumer products. On occasion, the designs or products posted to our marketplaces, including
Society6 or Saatchi Art, may infringe certain copyrights or trademarks or misappropriate the right of publicity of well-
known figures. As a result, we may be the subject of letters, lawsuits and takedown notices from rights holders, and the
Digital Millennium Copyright Act may not provide safe-harbors for all types of infringing content hosted on these
properties. Addressing these types of claims could require us to expend time and resources, which could have an adverse
impact on our business and results of operations.
We also license the names “Saatchi” and “Livestrong.com” pursuant to the terms of intellectual property or
licensing agreements with third parties, which may be terminated by such third parties if we do not comply with certain
requirements in the agreements. If either of these licensing arrangements was terminated, we would experience business
disruption and would have to incur significant resources to rebrand the relevant business, which could have an adverse
impact on our business, financial condition and results of operations.
As a creator and a distributor of Internet content, we face potential liability and expenses for legal claims based on
the nature and subject matter of the content that we create or distribute, or that are accessible via our online
properties. If we are required to pay damages or expenses in connection with these legal claims, our business,
financial condition and results of operations may be harmed.
As a creator and distributor of original content and third-party provided content, we face potential liability in the
United States and abroad based on a variety of theories, including copyright or trademark infringement, defamation,
right of publicity, negligence, unlawful practice of a licensed profession and other legal theories based on the nature,
creation or distribution of this information, and under various laws, including the Lanham Act and the Copyright Act.
We may also be exposed to similar liability in connection with content that we do not create but that is posted to our