Plantronics 2011 Annual Report Download - page 28

We are subject to environmental laws and regulations that expose us to a number of risks and could result in significant
liabilities and costs.
There are multiple initiatives in several jurisdictions regarding the removal of certain potential environmentally sensitive materials
from our products to comply with the European Union (“EU”) and other Directives on the Restrictions of the use of Certain
Hazardous Substances in Electrical and Electronic Equipment (“RoHS”) and on Waste Electrical and Electronic Equipment
(“WEEE”). In certain jurisdictions, the RoHS legislation was enacted as of July 1, 2006; however, other jurisdictions have delayed
implementation. While we believe that we will have the resources and ability to fully meet the requirements of the RoHS and
WEEE directives universally, if unusual occurrences arise or we are wrong in our assessment of what it will take to fully comply,
there is a risk that we will not be able to comply with the legislation as passed by the EU member states or other global jurisdictions.
If this were to happen, a material negative effect on our financial results may occur.
We are subject to various federal, state, local, and foreign environmental laws and regulations on a global basis, including those
governing the use, discharge, and disposal of hazardous substances in the ordinary course of our manufacturing process. Although
we believe that our current manufacturing operations comply in all material respects with applicable environmental laws and
regulations, it is possible that future environmental legislation may be enacted or current environmental legislation may be
interpreted in any given country to create environmental liability with respect to our facilities, operations, or products. To the
extent that we incur claims for environmental matters exceeding reserves or insurance for environmental liability, our operating
results could be negatively impacted.
We have intellectual property rights that could be infringed on by others, and we may infringe on the intellectual property
rights of others. Even if we prevail, claims and lawsuits are costly and time consuming to pursue or defend and may divert
management's time from our business.
Our success depends in part on our ability to protect our copyrights, patents, trademarks, trade dress, trade secrets, and other
intellectual property, including our rights to certain domain names. We rely primarily on a combination of nondisclosure agreements
and other contractual provisions as well as patent, trademark, trade secret, and copyright laws to protect our proprietary rights.
Effective trademark, patent, copyright, and trade secret protection may not be available in every country in which our products
and media properties are distributed to customers. The process of seeking intellectual property protection can be lengthy and
expensive. Patents may not be issued in response to our applications, and any patents that may be issued may be invalidated,
circumvented, or challenged by others. If we are required to enforce our intellectual property or other proprietary rights through
litigation, the costs and diversion of management's attention could be substantial. In addition, the rights granted under any
intellectual property may not provide us competitive advantages or be adequate to safeguard and maintain our proprietary rights.
Moreover, the laws of certain countries do not protect our proprietary rights to the same extent as do the laws of the U.S. If we
do not enforce and protect our intellectual property rights, it could materially adversely affect our business, financial condition,
and results of operations.
Patents, copyrights, trademarks, and trade secrets are owned by individuals or entities that may make claims or commence litigation
based on allegations of infringement or other violations of intellectual property rights. As we have grown, the intellectual property
rights claims against us have increased. There has also been a general trend of increasing intellectual property assertion against
corporations that make and sell products. Our products and technologies may be subject to certain third-party claims and, regardless
of the merits of the claim, intellectual property claims are often time-consuming and expensive to litigate, settle, or otherwise
resolve. In addition, to the extent claims against us are successful, we may have to pay substantial monetary damages or discontinue
the manufacture and distribution of products that are found to be in violation of another party's rights. We also may have to obtain,
or renew on less favorable terms, licenses to manufacture and distribute our products, which may significantly increase our operating
expenses. In addition, many of our agreements with our distributors and resellers require us to indemnify them for certain third-
party intellectual property infringement claims. Discharging our indemnity obligations may involve time-consuming and expensive
litigation and result in substantial settlements or damages awards, our products being enjoined, and the loss of a distribution channel
or retail partner.
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