Expedia 2013 Annual Report Download - page 15

demand, quality and breadth of travel products, channel features and usability, price or promotional offers,
traveler service and quality of travel planning content and advice as well as offline brand efforts. The emphasis
on one or more of these factors varies, depending on the brand or business and the related target demographic.
Our brands face increasing competition from travel supplier direct websites. In some cases, supplier direct
channels offer advantages to travelers, such as long standing loyalty programs, and better pricing. Our websites
feature travel products and services from numerous travel suppliers, and allow travelers to combine products and
services from multiple providers in one transaction. We face competition from airlines, hotels, rental car
companies, cruise operators and other travel service providers, whether working individually or collectively,
some of which are suppliers to our websites. Our business is generally sensitive to changes in the competitive
landscape, including the emergence of new competitors or business models, and supplier consolidation.
Intellectual Property Rights
Our intellectual property rights, including our patents, trademarks, trade dress, proprietary technology, and
trade secrets, are an important component of our business. For example, we rely heavily upon our intellectual
property rights in our content, brands, software code, proprietary technology, ratings indexes, informational
databases, images, graphics and other components that make up our services. We have acquired some of our
intellectual property rights through licenses and content agreements with third parties.
We protect our intellectual property by relying on our terms of use, confidentiality procedures and
contractual provisions, as well as international, national, state and common law rights. In addition, we enter into
confidentiality and invention assignment agreements with employees and contractors, and confidentiality
agreements with other third parties. Despite these precautions, it may be possible for a third party to copy or
otherwise obtain and use our trade secrets or our intellectual property without authorization which, if discovered,
might require the uncertainty of legal action to correct. In addition, there can be no assurance that others will not
independently and lawfully develop substantially similar properties.
We maintain our trademark portfolio by filing trademark applications with the appropriate international
trademark offices, maintaining appropriate registrations, securing contractual trademark rights when appropriate,
and relying on common law trademark rights when appropriate. We also register copyrights and domain names
as we deem appropriate. We protect our trademarks, copyrights and domain names with an enforcement program
and use of intellectual property licenses. Trademark and intellectual property protection may not be available or
may not be sought, sufficient or effective in every jurisdiction where we operate. Contractual disputes or
limitations may affect the use of trademarks and domain names governed by private contract.
We have considered, and will continue to consider, the appropriateness of filing for patents to protect future
inventions, as circumstances may warrant. However, many patents protect only specific inventions and there can
be no assurance that others may not create new products or methods that achieve similar results without
infringing upon patents owned by us.
From time to time, we may be subject to legal proceedings and claims in the ordinary course of our business,
including claims of alleged infringement or infringement by us of the trademarks, copyrights, patents and other
intellectual property rights of third parties. In addition, litigation may be necessary in the future to enforce our
intellectual property rights, protect our trade secrets or to determine the validity and scope of proprietary rights
claimed by others. Any such litigation, regardless of outcome or merit, could result in substantial costs and
diversion of management and technical resources, any of which could materially harm our business.
Regulation
We must comply with laws and regulations relating to the travel industry and the provision of travel
services, including registration in various states as “sellers of travel” and compliance with certain disclosure
requirements and participation in state restitution funds. In addition, our businesses are subject to regulation by
the U.S. Department of Transportation and must comply with various rules and regulations governing the
provision of air transportation, including those relating to advertising and accessibility.
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