LensCrafters 2015 Annual Report Download - page 25

Management Report as of December 31, 2015 Page 21 of 35
manufacturing activities and services provided to us by third parties within our supply chain, which are subject to numerous
workplace health and safety laws, environmental laws, labor laws and other similar regulations and restrictions on the
sourcing of materials (including with respect to “conflict mineral” zones) that may vary from country to country and are
continuously evolving. In certain countries, failure to comply with applicable laws and regulations relating to workplace
health and safety protection and environmental matters could result in criminal and/or civil penalties being imposed on
responsible individuals and, in certain cases, the Company. In addition, effective in 2016, the European Union has put in
place new rules and regulations regarding privacy concerns, which impose fines and penalties for non-compliance that are
calculated as a percentage of net sales. In certain circumstances, even if no fine or penalty is imposed for our failure to
comply with an applicable law or regulation, we may suffer reputational harm if we fail to comply with applicable laws and
regulations. We have implemented policies and procedures designed to facilitate our compliance with these laws and
regulations, but there can be no assurance that our employees, contractors or agents will not violate such laws and
regulations or our policies. Any such violations could individually, or in the aggregate, materially adversely affect our
financial condition or operating results.
Additionally, our Oakley, Eye Safety Systems and EyeMed subsidiaries are U.S. government contractors or subcontractors
and, as a result, we must comply with, and are affected by, U.S. laws and regulations related to conducting business with the
U.S. government. These laws and regulations may impose various additional costs and risks on our business. For example,
Oakley and Eye Safety Systems are required to obtain applicable governmental approvals, clearances and certain export
licenses. We also may become subject to audits, reviews and investigations of our compliance with these laws and
regulations.
j) If we are unable to protect our proprietary rights, our sales might suffer, and we may incur significant
additional costs to defend such rights.
We rely on trade secret, unfair competition, trade dress, trademark, patent and copyright laws to protect our rights to certain
aspects of our products and services, including product designs, brand names, proprietary manufacturing processes and
technologies, product research and concepts and goodwill, all of which we believe are important to the success of our
products and services and our competitive position. However, pending trademark or patent applications may not in all
instances result in the issuance of a registered trademark or patent, and trademarks or patents granted may not be effective in
thwarting competition or be held valid if subsequently challenged. In addition, the actions we take to protect our proprietary
rights may be inadequate to prevent imitation of our products and services. Our proprietary information could become
known to competitors, and we may not be able to meaningfully protect our rights to proprietary information. Furthermore,
other companies may independently develop substantially equivalent or better products or services that do not infringe on
our intellectual property rights or could assert rights in, and ownership of, our proprietary rights. Moreover, the laws of
certain countries do not protect proprietary rights to the same extent as the laws of the United States or of the member states
of the European Union.
Consistent with our strategy of vigorously defending our intellectual property rights, we devote substantial resources to the
enforcement of patents issued and trademarks granted to us, to the protection of our trade secrets or other intellectual
property rights and to the determination of the scope or validity of the proprietary rights of others that might be asserted
against us. However, if the level of potentially infringing activities by others were to increase substantially, we might have