Harman Kardon 2008 Annual Report Download - page 30

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12
Our operations could be harmed by factors including political instability, natural disasters,
fluctuations in currency exchange rates and changes in regulations that govern international
transactions.
The risks inherent in international trade may reduce our international sales and harm our business and the
businesses of our distributors and suppliers. These risks include:
• changes in tariff regulations;
• political instability, war, terrorism and other political risks;
• foreign currency exchange rate fluctuations;
• establishing and maintaining relationships with local distributors and dealers;
• lengthy shipping times and accounts receivable payment cycles;
• import and export licensing requirements;
• compliance with foreign laws and regulations, including unexpected changes in taxation and
regulatory requirements;
• greater difficulty in safeguarding intellectual property than in the United States; and
• difficulty in staffing and managing geographically diverse operations.
These and other risks may increase the relative price of our products compared to those manufactured in
other countries, reducing the demand for our products.
If we are unable to enforce or defend our ownership and use of our intellectual property, our business
may decline.
Our future success will depend, in substantial part, on our intellectual property. We seek to protect our
intellectual property rights, but our actions may not adequately protect the rights covered by our patents,
patent applications, trademarks and other proprietary rights and prosecution of our claims could be time
consuming and costly. In addition, the intellectual property laws of some foreign countries do not protect
our proprietary rights, as do the laws of the United States. Despite our efforts to protect our proprietary
information, third parties may obtain, disclose or use our proprietary information without our
authorization, which could adversely affect our business. From time to time, third parties have alleged
that we infringe their proprietary rights. These claims or similar future claims could subject us to
significant liability for damages, result in the invalidation of our proprietary rights, limit our ability to use
infringing intellectual property or force us to license third-party technology rather than dispute the merits
of any infringement claim. Even if we prevail, any associated litigation could be time consuming and
expensive and could result in the diversion of our time and resources.