Nokia 2005 Annual Report Download - page 19

quality, safety, security and other standards successfully and on schedule could be hampered if,
for example, any of the following risks were to materialize: the arrangements with the companies
that work with us do not develop as expected; the technologies provided by the companies that
work with us are not sufficiently protected or infringe third parties’ intellectual property rights in
a way that we cannot foresee or prevent; the technologies, products or solutions supplied by the
companies that work with us do not meet the required quality, safety, security and other
standards or customer needs; our own quality controls fail; or the financial condition of the
companies that work with us deteriorates.
Our operations rely on complex and highly centralized information technology systems and
networks. If any system or network disruption occurs, this reliance could have a material
adverse impact on our operations, sales and operating results.
Our operations rely to a significant degree on the efficient and uninterrupted operation of complex
and highly centralized information technology systems and networks, which are integrated with
those of third parties. Any failure or disruption of our current or future systems or networks could
have a material adverse effect on our operations, sales and operating results. Furthermore, any
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, attack by a 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 rights related to the
technologies we use or 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
third parties. As the amount of such proprietary technologies and the number of parties claiming
rights continues to increase, even within individual products, and as the Nokia product range
becomes more diversified, and as the complexity of the technology increases, the possibility of
alleged infringement and related intellectual property claims against us continues to rise. The
holders of patents and other intellectual property rights 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
17