Garmin 2009 Annual Report Download - page 39

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orifakeymanufacturingvendordelayedshipmentsofcompletedproductstotheCompany,theCompany’s
financialconditionandoperatingresultscouldbemateriallyadverselyaffected.TheCompany’sbusinessand
financialperformancecouldalsobeadverselyaffecteddependingonthetimerequiredtoobtainsufficient
quantitiesfromtheoriginalsource,ortoidentifyandobtainsufficientquantitiesfromanalternativesource.
Continuedavailabilityofthesecomponentsatacceptableprices,oratall,maybeaffectedifthosesuppliers
decidedtoconcentrateontheproductionofcommoncomponentsinsteadofcomponentscustomizedtomeetthe
Company’srequirements.
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Seasonality
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Oursalesaresubjecttosignificantseasonalfluctuation.Salesofourconsumerproductsaregenerally
significantlyhigherinthefourthquarter,duetoincreaseddemandforautomotive/mobileproductsduringthe
holidaybuyingseason,and,toalesserextent,thesecondquarter,duetoincreaseddemandduringthespringand
summermarineseasonandtheFather’sDay/graduationbuyingseason.Salesofconsumerproductsarealso
influencedbythetimingofthereleaseofnewproducts.Ouraviationproductsdonotexperiencemuchseasonal
variation,butaremoreinfluencedbythetimingofthereleaseofnewproductswhentheinitialdemandistypically
thestrongest.
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Backlog
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Oursalesaregenerallyofaconsumernatureandthereisarelativelyshortcyclebetweenorderand
shipment.Therefore,webelievethatbackloginformationisnotmaterialtotheunderstandingofourbusiness.
Wetypicallyshipmostorderswithin72hoursofreceipt.
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IntellectualProperty
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Oursuccessandabilitytocompeteisdependentinpartonourproprietarytechnology.Werelyona
combinationofpatent,copyright,trademarkandtradesecretlaws,aswellasconfidentialityagreements,to
establishandprotectourproprietaryrights.Inaddition,Garminoftenreliesonlicensesofintellectualpropertyfor
useinitsbusiness.Forexample,Garminobtainslicensesfordigitalcartographytechnologyforuseinourproducts
fromvarioussources.
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AsofJanuary21,2010,Garmin’sworldwideIPportfolioincludesover400patentsand250trademark
registrations.Garminwasselectedasaconstituentofthe2009OceanTomo®300PatentIndexandthe2009Wall
StreetJournal®Electronic&InstrumentsPatentScorecard,bothofwhichareindicesthatrecognizecompanies
withhighintellectualpropertyvalue.Webelievethatourcontinuedsuccessdependsontheintellectualskillsof
ouremployeesandtheirabilitytocontinuetoinnovate. Garminwillcontinuetofileandprosecutepatent
applicationswhenappropriatetoattempttoprotectGarmin’srightsinitsproprietarytechnologies.
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Thereisnoassurancethatourcurrentpatents,orpatentswhichwemaylateracquire,maysuccessfully
withstandanychallenge,inwholeorinpart.Itisalsopossiblethatanypatentissuedtousmaynotprovideuswith
anycompetitiveadvantages,orthatthepatentsofotherswillprecludeusfrommanufacturingandmarketing
certainproducts.Despiteoureffortstoprotectourproprietaryrights,unauthorizedpartiesmayattempttocopy
aspectsofourproductsortoobtainanduseinformationthatweregardasproprietary.Litigationmaybe
necessaryinthefuturetoenforceourintellectualpropertyrights,toprotectourtradesecrets,todeterminethe
validityandscopeoftheproprietaryrightsofothersortodefendagainstclaimsofinfringementorinvalidity.