Nokia 2004 Annual Report Download - page 19

data leakages resulting from information technology security breaches could also adversely
affect us.
All information technology systems are potentially vulnerable to damage or interruption from a
variety of sources. We pursue various measures in order to manage our risks related to system
and network disruptions, including the use of multiple suppliers and available information
technology security. However, despite precautions taken by us, an outage in a telecommunications
network utilized by any of our information technology systems, virus or other event that leads to
an unanticipated interruption of our information technology systems or networks could have a
material adverse effect on our operations, sales and operating results.
Our products and solutions include increasingly complex technology involving numerous new
Nokia patented and other proprietary technologies, as well as some developed or licensed to
us by certain third parties. As a consequence, evaluating the protection of the technologies
we intend to use is more and more challenging, and we expect increasingly to face claims
that we have infringed third parties’ intellectual property rights. The use of increasingly
complex technology may also result in increased licensing costs for us, restrictions on our
ability to use certain technologies in our products and solution offerings, and/or costly and
time-consuming litigation. Third parties may also commence actions seeking to establish the
invalidity of intellectual property rights on which we depend.
Our products and solutions include increasingly complex technology involving numerous new
Nokia patented and other proprietary technologies, as well as some developed or licensed to us by
certain third parties. As the amount of such proprietary technologies needed for our products and
solutions continues to increase, the number of parties claiming rights continues to increase and
become more fragmented within individual products, and as the complexity of the technology and
the overlap of product functionalities increases, the possibility of more infringement and related
intellectual property claims against us also continues to increase. The holders of patents
potentially relevant to our product and solution offerings may be unknown to us, or may
otherwise make it difficult for us to acquire a license on commercially acceptable terms. There
may also be technologies licensed to and relied on by us that are subject to infringement or other
corresponding allegations or claims by others which could damage our ability to rely on such
technologies. In addition, although we endeavor to ensure that companies that work with us
possess appropriate intellectual property rights or licenses, we cannot fully avoid risks of
intellectual property rights infringement created by suppliers of components and various layers in
our products and solutions or by companies with which we work in cooperative research and
development activities. Similarly, we and our customers may face claims of infringement in
connection with our customers’ use of our products and solutions. Finally, as all technology
standards, including those used and relied on by us, include some intellectual property rights, we
cannot fully avoid risks of a claim for infringement of such rights due to our reliance on such
standards. We believe that the number of third parties declaring their intellectual property to be
relevant to these standards is increasing, which may increase the likelihood that we will be
subject to such claims in the future.
Any restrictions on our ability to sell our products and solutions due to expected or alleged
infringements of third party intellectual property rights and any intellectual property rights
claims, regardless of merit, could result in material losses of profits, costly litigation, the payment
of damages and other compensation, the diversion of the attention of our personnel, product
shipment delays or the need for us to develop non-infringing technology or to enter into royalty
or licensing agreements. If we were unable to develop non-infringing technology, or if royalty or
licensing agreements were not available on commercially acceptable terms, we could be precluded
from making and selling the affected products and solutions. As new features are added to our
products and solutions, we may need to acquire further licenses, including from new and
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