Google 2009 Annual Report Download - page 105

Google Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Purchase Obligations
We had $360.7 million of other non-cancelable contractual obligations and $1.9 billion of open purchase
orders for which we had not received the related services or goods at December 31, 2009. We have the right to
cancel these open purchase orders prior to the date of delivery. The majority of our non-cancelable contractual
obligations are related to data center operations and facility build-outs.
Letters of Credit
At December 31, 2009 and associated with several leased facilities, we had unused letters of credit for $101.2
million. At December 31, 2009, we were in compliance with our financial covenants under the letters of credit.
Indemnifications
In the normal course of business to facilitate transactions of our services and products, we indemnify certain
parties, including advertisers, Google Network members, and lessors with respect to certain matters. We have
agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or
out of intellectual property infringement or other claims made against certain parties. These agreements may limit
the time within which an indemnification claim can be made and the amount of the claim. In addition, we have
entered into indemnification agreements with our officers and directors, and our bylaws contain similar
indemnification obligations to our agents.
It is not possible to determine the maximum potential amount under these indemnification agreements due to
the limited history of prior indemnification claims and the unique facts and circumstances involved in each
particular agreement. Historically, the payments we have made under these agreements have not had a material
impact on our operating results, financial position, or cash flows.
Legal Matters
Companies have filed trademark infringement and related claims against us over the display of ads in
response to user queries that include trademark terms. The outcomes of these lawsuits have differed from
jurisdiction to jurisdiction. We currently have three cases pending at the European Court of Justice, which will
address questions regarding whether advertisers and search engines can be held liable for use of trademarked
terms in keyword advertising. We are litigating, or have recently litigated similar issues in other cases, in the U.S.,
Australia, Austria, Brazil, Chile, China, France, Germany, Israel, Italy, Taiwan, and the United Kingdom.
We have also had copyright claims filed against us alleging that features of certain of our products and
services, including Google Web Search, Google News, Google Video, Google Image Search, Google Book Search,
and YouTube, infringe their rights. Adverse results in these lawsuits may include awards of substantial monetary
damages, costly royalty or licensing agreements or orders preventing us from offering certain functionalities, and
may also result in a change in our business practices, which could result in a loss of revenue for us or otherwise
harm our business. In addition, any time one of our products or services links to or hosts material in which others
allegedly own copyrights, we face the risk of being sued for copyright infringement or related claims. Because
these products and services comprise the majority of our products and services, our business could be harmed in
the event of an adverse result in any of these claims.
We have also had patent lawsuits filed against us alleging that certain of our products and services, including
Android, Google Web Search, Google AdWords, Google AdSense, and Google Chrome, infringe patents held by
others. In addition, the number of demands for license fees and the dollar amounts associated with each request
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