LinkedIn 2015 Annual Report Download - page 37

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Litigation may be necessary to enforce our intellectual property rights, protect our proprietary rights
or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature,
regardless of outcome or merit, could result in substantial costs and diversion of management and
technical resources, any of which could adversely affect our business and operating results. We may
also incur significant costs in enforcing our trademarks against those who attempt to imitate our
‘‘LinkedIn’’ brand and other valuable trademarks and service marks.
In addition, we have chosen to make certain of our technology available under open source
licenses that allow others to use the technology without payment to us. While we hope to benefit from
these activities by having access to others’ useful technology under open source licenses, there is no
assurance that we will receive the business benefits we expect.
If we fail to maintain, protect and enhance our intellectual property rights, our business and
operating results may be harmed, and the market price of our Class A common stock could decline.
We are, and expect in the future to be, subject to legal proceedings and litigation, including
intellectual property and privacy disputes, which are costly to defend and could materially harm
our business and operating results.
We are party to lawsuits and legal proceedings in the normal course of business. These matters
are often expensive and disruptive to normal business operations. We are currently facing, or may face
in the future, allegations, lawsuits and regulatory inquiries, audits and investigations regarding data
privacy, security, labor and employment, consumer protection, the Fair Credit Reporting Act and
intellectual property infringement, including claims related to privacy, patents, publicity, trademarks,
copyrights and other rights. We may also face allegations or litigation related to our acquisitions,
securities issuances or our business practices, including public disclosures about our business.
Litigation and regulatory proceedings, and particularly the patent infringement and class action matters
we are facing or may face, may be protracted and expensive, and the results are difficult to predict.
Certain of these matters include speculative claims for substantial or indeterminate amounts of
damages, and include claims for injunctive relief. Additionally, our litigation costs can be significant.
Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant
settlement costs or judgments, penalties and fines, or require us to modify our products and features or
require us to stop offering certain features, all of which could negatively impact our membership and
revenue growth. Additionally, we are subject to periodic audits, which would likely increase our
regulatory compliance costs, and may require us to change our business practices, which could
negatively impact our revenue growth. Managing legal proceedings, litigation and audits, even if we
achieve favorable outcomes, is time-consuming and diverts management’s attention from our business.
In addition, we use open source software in our solutions and plan to continue to use open source
software in the future. The terms of many open source licenses have not been interpreted by United
States or other courts, and these licenses could be construed in a manner that imposes unanticipated
conditions or restrictions on our ability to commercialize our products. We may face claims from others
claiming ownership of open source software or patents related to that software, or breach of open
source license terms, including a demand for release of material portions of our source code or
otherwise seeking to enforce the terms of the applicable open source license. These claims could also
result in litigation, which could be costly to defend, require us to purchase a costly license, require us
to establish additional specific open source compliance procedures, or require us to devote additional
research and development resources to remove open source elements from or otherwise change our
solutions, any of which would have a negative effect on our business and operating results. In addition,
if we were to combine our own software with open source software in a certain manner, we could,
under certain open source licenses, be required to release the source code of some software that
would be valuable to keep as a trade secret and/or not make available for use by others which would
have a material adverse effect on our business, results of operations or financial condition.
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