Intel 2014 Annual Report Download - page 25

Our licenses with other companies and participation in industry initiatives may allow competitors to use our patent
rights.
Companies in our industry often bilaterally license patents between each other to settle disputes or as part of business
agreements. Our competitors may have licenses to our patents, and under current case law, some of the licenses may exhaust
our patent rights as to licensed product sales under some circumstances. Our participation in industry standards organizations or
with other industry initiatives may require us to license our patents to companies that adopt industry-standard specifications.
Depending on the rules of the organization, we might have to grant these licenses to our patents for little or no cost, and as a
result, we may be unable to enforce certain patents against others, our costs of enforcing our licenses or protecting our patents
may increase, and the value of our IP rights may be impaired.
Third parties may assert claims based on IP rights against us or our products, which could harm our business.
We may face claims based on IP rights from individuals and companies, including those who have acquired patent portfolios to
assert claims against other companies. We are normally engaged in a number of litigation matters involving IP rights. Claims that
our products or processes infringe the IP rights of others, whether or not meritorious, could cause us to incur large costs to
respond to, defend, and resolve the claims, and they may divert the efforts and attention of management and technical personnel.
In addition, we may face claims based on the theft or unauthorized use or disclosure of third-party trade secrets and other
confidential business information or end-user data that we obtain in conducting our business. Any such incidents and claims could
severely disrupt our business, and we could suffer losses, including the cost of product recalls and returns, and reputational harm.
Furthermore, we have agreed to indemnify customers for certain IP rights claims against them. As a result of IP rights claims, we
could:
•pay monetary damages, including payments to satisfy indemnification obligations;
•stop manufacturing, using, selling, offering to sell, or importing products or technology subject to claims;
•develop other products or technology not subject to claims, which could be time-consuming or costly; and/or
•enter into settlement and license agreements, which agreements may not be available on commercially reasonable terms.
These IP rights claims could harm our competitive position, result in expenses, or require us to impair our assets. If we alter or
stop production of affected items, our revenue could be harmed.
We rely on access to third-party IP, which may not be available to us on commercially reasonable terms or at all.
Many of our products include third-party IP and/or implement industry standards, which may require licenses from third parties.
Based on past experience and industry practice, we believe such licenses generally can be obtained on commercially reasonable
terms. However, there is no assurance that the necessary licenses can be obtained on acceptable terms or at all. Failure to
obtain the right to use third-party IP, or to use such IP on commercially reasonable terms, could preclude us from selling certain
products or otherwise have a material adverse impact on our financial condition and operating results.
We are subject to the risks associated with litigation and regulatory proceedings.
We may face legal claims or regulatory matters involving stockholder, consumer, competition, and other issues on a global basis.
As described in “Note 25: Contingencies” in Part II, Item 8 of this Form 10-K, we are engaged in a number of litigation and
regulatory matters. Litigation and regulatory proceedings are inherently uncertain, and adverse rulings could occur, including
monetary damages, or an injunction stopping us from manufacturing or selling certain products, engaging in certain business
practices, or requiring other remedies, such as compulsory licensing of patents. An unfavorable outcome may result in a material
adverse impact on our business, results of operations, financial position, and overall trends. In addition, regardless of the
outcome, litigation can be costly, time-consuming, disruptive to our operations, and distracting to management.
We must attract, retain, and motivate key employees.
To be competitive, we must attract, retain, and motivate executives and other key employees. Hiring and retaining qualified
executives, scientists, engineers, technical staff, and sales representatives are critical to our business, and competition for
experienced employees can be intense. To help attract, retain, and motivate qualified employees, we use share-based and other
performance-based incentive awards such as restricted stock units and cash bonuses. If our share-based or other compensation
programs cease to be viewed as competitive and valuable benefits, our ability to attract, retain, and motivate employees could be
weakened, which could harm our results of operations.
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