Neiman Marcus 2009 Annual Report Download - page 21

Table of Contents
If we are unable to enforce our intellectual property rights, or if we are accused of infringing on a third party's intellectual
property rights, our net income may decline.
We and our subsidiaries currently own our tradenames and service marks, including the "Neiman Marcus" and "Bergdorf
Goodman" marks. Our tradenames and service marks are registered in the United States and in various foreign countries, primarily in
Europe. The laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the United States.
Moreover, we are unable to predict the effect that any future foreign or domestic intellectual property legislation or regulation may
have on our existing or future business. The loss or reduction of any of our significant proprietary rights could have an adverse effect
on our business.
Additionally, third parties may assert claims against us alleging infringement, misappropriation or other violations of their
tradename or other proprietary rights, whether or not the claims have merit. Claims like these may be time consuming and expensive
to defend and could result in our being required to cease using the tradename or other rights and selling the allegedly infringing
products. This might have an adverse affect on our sales and cause us to incur significant litigation costs and expenses.
Failure to successfully maintain and update information technology systems and enhance existing systems may adversely
affect our business.
To keep pace with changing technology, we must continuously provide for the design and implementation of new
information technology systems as well as enhancements of our existing systems. Any failure to adequately maintain and update the
information technology systems supporting our online operations, sales operations or inventory control could prevent our customers
from purchasing merchandise on our websites or prevent us from processing and delivering merchandise, which could adversely affect
our business.
Delays in receipt of merchandise in connection with either the manufacturing or shipment of such merchandise can affect our
performance.
Substantially all of our merchandise is delivered to us by our vendors as finished goods and is manufactured in numerous
locations, including Europe and the United States and, to a lesser extent, China, Mexico and South America. Our vendors rely on
third party carriers to deliver merchandise to our distribution facilities. In addition, our success depends on our ability to source and
distribute merchandise efficiently to our Specialty Retail stores and Direct Marketing customers. Events such as U.S. or foreign labor
strikes, natural disasters, work stoppages or boycotts affecting the manufacturing or transportation sectors and increases in fuel costs
could increase the cost or reduce the supply of merchandise available to us and could adversely affect our results of operations.
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