Google 2012 Annual Report Download - page 19

13GOOGLE INC. | Form10-K
PART I
ITEM1A.Risk Factors
to us, when obtainable, may not cover all damages and losses suff ered by us and our customers from covered products. In
addition, in connection with the sale of Motorola’s Home business to Arris Group, Inc. (Arris), we agreed to indemnify Arris against
certain intellectual property infringement litigation, including, among others, a patent infringement claim brought by TiVo relating
to certain digital video recording equipment sold by Motorola Mobility.
Regardless of the merits of the claims, intellectual property claims are often time consuming, expensive to litigate or settle, and
cause signifi cant diversion of management attention. To the extent such intellectual property infringement claims are successful,
they may have an adverse eff ect on our business, consolidated fi nancial position, results of operations, or cash fl ows.
Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products,
services, and brand.
Our patents, trademarks, trade secrets, copyrights, and other intellectual property rights are important assets for us. Various
events outside of our control pose a threat to our intellectual property rights, as well as to our products, services and technologies.
For example, eff ective intellectual property protection may not be available in every country in which our products and services
are distributed or made available through the internet. Also, the eff orts we have taken to protect our proprietary rights may not
be su cient or eff ective.
Although we seek to obtain patent protection for our innovations, it is possible we may not be able to protect some of these
innovations. Moreover, because of our long-term interests in open source, we may not have adequate patent protection for certain
innovations that later turn out to be important. Furthermore, there is always the possibility, despite our eff orts, that the scope of
the protection gained will be insu cient or that an issued patent may be deemed invalid or unenforceable.
We also seek to maintain certain intellectual property as trade secrets. The secrecy could be compromised by outside parties, or
by our employees, which could cause us to lose the competitive advantage resulting from these trade secrets.
We also face risks associated with our trademarks. For example, there is a risk that the word “Google” could become so commonly
used that it becomes synonymous with the word “search.” If this happens, we could lose protection for this trademark, which
could result in other people using the word “Google” to refer to their own products, thus diminishing our brand.
Any signifi cant impairment of our intellectual property rights could harm our business and our ability to compete. Also, protecting
our intellectual property rights is costly and time consuming. Any increase in the unauthorized use of our intellectual property
could make it more expensive to do business and harm our operating results.
We may be subject to legal liability associated with providing online services or content.
We host and provide a wide variety of services and products that enable users to exchange information, advertise products and
services, conduct business, and engage in various online activities both domestically and internationally. The law relating to the
liability of providers of these online services and products for activities of their users is still somewhat unsettled both within the
U.S. and internationally. Claims have been threatened and have been brought against us for defamation, negligence, breaches of
contract, copyright or trademark infringement, unfair competition, unlawful activity, tort, including personal injury, fraud, or other
theories based on the nature and content of information which we publish or to which we provide links or that may be posted
online or generated by us or by third parties, including our users. In addition, we are and have been and may again in the future
be subject to domestic or international actions alleging that certain content we have generated or third-party content that we
have made available within our services violates laws in domestic and international jurisdictions.
We also arrange for the distribution of third-party advertisements to third-party publishers and advertising networks, and we
off er third-party products, services, or content. We may be subject to claims concerning these products, services, or content by
virtue of our involvement in marketing, branding, broadcasting, or providing access to them, even if we do not ourselves host,
operate, provide, or provide access to these products, services, or content. Defense of any such actions could be costly and involve
signifi cant time and attention of our management and other resources, may result in monetary liabilities or penalties, and may
require us to change our business in an adverse manner.
Privacy concerns relating to our technology could damage our reputation and deter current andpotential users from
using our products andservices.
From time to time, concerns have been expressed by regulators and others about whether our products, services, or processes
compromise the privacy of users and others. Concerns about, or regulatory actions involving our practices with regard to the
collection, use, disclosure, or security of personal information or other privacy related matters, even if unfounded, could damage
our reputation and adversely aff ect operating results. While we strive to comply with all applicable data protection laws and
regulations, as well as our own posted privacy policies, the failure or perceived failure to comply may result, and in some cases
has resulted, in inquiries and other proceedings or actions against us by government entities or others, or could cause us to lose
users and customers, which could potentially have an adverse eff ect on our business.
In addition, as nearly all of our products and services are web-based, the amount of data we store for our users on our servers
(including personal information) has been increasing. Any systems failure or compromise of our security that results in the release
of our users’ data could seriously limit the adoption of our products and services, as well as harm our reputation and brand and,
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