Memorex 2011 Annual Report Download - page 10

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Research, Development and Engineering
Development and timely introduction of new products are important to our future success. We maintain an advanced
research facility and invest resources in researching, developing and engineering potential new products and improving
existing products. Our research and development expense was $21.0 million, $16.4 million and $20.4 million for 2011, 2010
and 2009, respectively. We invest in research, development, engineering and capital equipment in order to remain
competitive and successfully develop and source products that meet market requirements. We are also engaged both on our
own and in collaboration with other organizations in certain research programs related to future generations of magnetic tape
that do not yet have specific commercialized products in the market. We also invest in research related to our strategic focus
on data protection and management, storage hardware, audio and video information products, removable hard drive systems
and related software. As noted above, we signed a strategic agreement with TDK to jointly develop and manufacture
magnetic tape technologies. Under the agreement, we collaborate on the research and development of future tape formats in
both companies’ research centers in the U.S. and Japan.
Intellectual Property
We rely on a combination of patent, trademark and copyright laws, trade secret protection and confidentiality and license
agreements to protect the intellectual property rights related to our products. We register our patents and trademarks in the
United States and in a number of other countries where we do business. United States patents are currently granted for a
term of 20 years from the date a patent application is filed. United States trademark registrations are for a term of ten years
and are renewable every ten years as long as the trademarks are used in the regular course of trade. Pursuant to trademark
license agreements between TDK and Imation and its affiliates, TDK granted Imation and its affiliates a long-term exclusive
license to use the TDK Life on Record brand for current and future recordable magnetic, optical, flash media and accessory
products globally. The trademark license agreements will continue unless terminated by TDK no earlier than 2032 (2017 in
the case of headphones and speakers) or earlier in the event of a material breach of the trademark license agreement,
specific change of control events or default by Imation.
During 2011, we were awarded 14 United States patents and at the end of the year held over 249 patents in the United
States.
Employees
At December 31, 2011, we employed approximately 1,130 people worldwide, with approximately 470 employed in the
United States and approximately 660 employed internationally.
Environmental Matters
Our operations are subject to a wide range of federal, state and local environmental laws. Environmental remediation
costs are accrued when a probable liability has been determined and the amount of such liability has been reasonably
estimated. These accruals are reviewed periodically as remediation and investigatory activities proceed and are adjusted
accordingly. Compliance with environmental regulations has not had a material adverse effect on our financial results. As of
December 31, 2011, we had environmental-related accruals totaling $0.5 million and we had minor remedial activities
underway at one of our prior manufacturing facilities. We believe that our accruals are adequate, though there can be no
assurance that the amount of expense relating to remedial actions and compliance with applicable environmental laws will not
exceed the amounts reflected in our accruals.
International Operations
Approximately 60 percent of our total 2011 revenue came from sales outside the United States, primarily through
subsidiaries, sales offices, distributors, VARs and relationships with OEMs throughout Europe, Asia, Latin America and
Canada. We do not own manufacturing facilities outside of the United States. See Note 14 to the Consolidated Financial
Statements for further information by geographic region.
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