Intel 2006 Annual Report Download - page 27

Table of Contents
We may be subject to claims of infringement of third
-
party intellectual property rights, which could adversely affect our
business.
From time to time, third parties may assert against us or our customers alleged patent, copyright, trademark, and other
intellectual property rights to technologies that are important to our business. We may be subject to intellectual property
infringement claims from certain individuals and companies who have acquired patent portfolios for the sole purpose of
asserting such claims against other companies. Any claims that our products or processes infringe the intellectual property
rights of others, regardless of the merit or resolution of such claims, could cause us to incur significant costs in responding to,
defending, and resolving such claims, and may divert the efforts and attention of our management and technical personnel
away from our business. As a result of such intellectual property infringement claims, we could be required or otherwise
decide it is appropriate to:
The occurrence of any of the foregoing could result in unexpected expenses or require us to recognize an impairment of our
assets, which would reduce the value of our assets and increase expenses. In addition, if we alter or discontinue our production
of affected items, our revenue could be negatively impacted.
We may be subject to litigation proceedings that could adversely affect our business.
In addition to the litigation risks mentioned above, we may be subject to legal claims or regulatory matters involving
stockholder, consumer, antitrust, and other issues. As described in “Legal Proceedings” in Part I, Item 3 of this Form 10-K,
we
are currently engaged in a number of litigation matters. Litigation is subject to inherent uncertainties, and unfavorable rulings
could occur. An unfavorable ruling could include monetary damages or, in cases for which injunctive relief is sought, an
injunction prohibiting Intel from manufacturing or selling one or more products. Were an unfavorable ruling to occur, there
exists the possibility of a material adverse impact on business and results of operations for the period in which the ruling
occurred or future periods.
We may not be able to enforce or protect our intellectual property rights, which may harm our ability to compete and
adversely affect our business.
Our ability to enforce our patents, copyrights, software licenses, and other intellectual property is subject to general litigation
risks, as well as uncertainty as to the enforceability of our intellectual property rights in various countries. When we seek to
enforce our rights, we are often subject to claims that the intellectual property right is invalid, is otherwise not enforceable, or
is licensed to the party against whom we are asserting a claim. In addition, our assertion of intellectual property rights often
results in the other party seeking to assert alleged intellectual property rights of its own against us, which may adversely
impact our business in the manner discussed above. If we are not ultimately successful in defending ourselves against these
claims in litigation, we may not be able to sell a particular product or family of products, due to an injunction, or we may have
to pay material amounts of damages, which could in turn negatively affect our results of operations. In addition, governments
may adopt regulations or courts may render decisions requiring compulsory licensing of intellectual property to others, or
governments may require that products meet specified standards that serve to favor local companies. Our inability to enforce
our intellectual property rights under these circumstances may negatively impact our competitive position and our business.
Our licenses with other companies and our participation in industry initiatives may allow other companies, including
competitors, to use our patent rights.
Companies in the semiconductor industry often rely on the ability to license patents from each other in order to compete.
Many of our competitors have broad licenses or cross-
licenses with us, and under current case law, some of these licenses may
permit these competitors to pass our patent rights on to others. If one of these licensees becomes a foundry, our competitors
might be able to avoid our patent rights in manufacturing competing products. In addition, our participation in industry
initiatives may require us to license our patents to other companies that adopt certain industry standards or specifications, even
when such organizations do not adopt standards or specifications proposed by us. As a result, our patents implicated by our
participation in industry initiatives might not be available for us to enforce against others who might otherwise be deemed to
be infringing those patents, our costs of enforcing our licenses or protecting our patents may increase, and the value of our
intellectual property may be impaired.
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•
pay third
-
party infringement claims;
•
discontinue manufacturing, using, or selling particular products subject to infringement claims;
•
discontinue using the technology or processes subject to infringement claims;
• develop other technology not subject to infringement claims, which could be time-consuming and costly or may not be
possible; and/or
• license technology from the third party claiming infringement, which license may not be available on commercially
reasonable terms.