Hertz 2008 Annual Report Download - page 61

ITEM 1A. RISK FACTORS (Continued)
Claims that the software products and information technology systems that we rely on are
infringing on the intellectual property rights of others could increase our expenses or inhibit us
from offering certain services.
A number of entities, including some of our competitors, have sought, or may in the future obtain,
patents and other intellectual property rights that cover or affect software products and other
components of information technology systems that we rely on to operate our business. For example,
Enterprise has previously asserted that certain systems we use to conduct insurance replacement
rentals would infringe on patent rights that it has been granted.
Litigation may be necessary to determine the validity and scope of third-party rights or to defend against
claims of infringement. If a court determines that one or more of the software products or other
components of information technology systems we use infringe on intellectual property owned by others
or we agree to settle such a dispute, we may be liable for monetary damages. In addition, we may be
required to obtain licenses from the owners of the intellectual property, redesign those products and
components in such a way as to avoid infringement or cease altogether the use of those products and
components. Each of these alternatives could increase our expenses materially or impact the
marketability of our services. Any litigation, regardless of the outcome, could result in substantial costs
and diversion of resources and could have a material adverse effect on our business. In addition, a third-
party intellectual property owner might not allow us to use its intellectual property at any price, or on
terms acceptable to us, which could materially affect our competitive position and our results of
operations. For example, if Enterprise were to pursue and prevail on claims of infringement similar to
those it has previously asserted, it could have a material adverse effect on our insurance replacement
business and, in turn, our off-airport business. We have already commenced litigation against Enterprise
with respect to its patents and claims it has made. See ‘‘Item 3—Legal Proceedings.’’
The misuse or theft of information we possess could harm our brand, reputation or competitive
position or give rise to material liabilities.
We possess non-public information with respect to millions of individuals, including our customers and
our current and former employees, and thousands of businesses, as well as non-public information with
respect to our own affairs. The misuse or theft of that information by either our employees or third parties
could result in material damage to our brand, reputation or competitive position. In addition, depending
on the type of information involved, the nature of our relationship with the person or entity to which the
information relates, the cause and the jurisdiction whose laws are applicable, that misuse or theft of
information could result in governmental investigations or material civil or criminal liability. The laws that
would be applicable to such a failure are rapidly evolving and becoming more burdensome. See
‘‘—Changes in the U.S. and foreign legal and regulatory environment that impact our operations, could
disrupt our business or increase our expenses.’’
If we acquire any businesses in the future, they could prove difficult to integrate or disrupt our
business.
We intend to pursue the growth of our business and from time to time consider opportunistic
acquisitions which may be significant. Any future acquisition would involve numerous risks including,
without limitation:
• potential disruption of our ongoing business and distraction of management;
• difficulty integrating the acquired business; and
• exposure to unknown liabilities, including litigation against the companies we may acquire.
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