Rosetta Stone 2010 Annual Report Download - page 18

Table of Contents
We hold a perpetual, irrevocable and worldwide license from the University of Colorado allowing us to use speech recognition technology for language
learning solutions. We entered into the license agreement in December 2006, and paid the University of Colorado an up-front license fee.
We have registered a variety of trademarks, including Rosetta Stone, Rosetta World, Rosetta Stone Language Learning Success & global design, Audio
Companion, Dynamic Immersion, The Fastest Way to Learn a Language. Guaranteed., Adaptive Recall, Contextual Formation, the Rosetta Stone blue stone
logo and design, the Rosetta Stone blue stone logo and design/Language Learning Success, Rosettastone.com, Rosetta Stone TOTALe, rWorld, SharedTalk
and TOTALe. We have applied to register our Rosetta Studio, Rosetta Course, and Simbio trademarks. All these trademarks are the subject of either
registrations or pending applications in the United States, as well as numerous countries worldwide where we do business. We intend to continue to
strategically register, both domestically and internationally, trademarks we utilize today and those we develop in the future.
We own the copyright on our Version 2 English editions. We are registering or have registered in the United States our Version 2 non-English editions
and all editions of our Version 3 languages.
We believe that the distinctive marks that we use in connection with our solutions are important in building our brand image and distinguishing our
solutions from those of our competitors. These marks are among our most valuable assets. In addition to our distinctive marks, we own several copyrights and
trade dress rights to our solutions, product packaging and user manuals. We also place significant value on our trade dress, which is the overall image and
appearance of our solutions, and we believe that our trade dress helps to distinguish our solutions in the marketplace.
Furthermore, our employees, contractors and other parties with access to our confidential information sign agreements that prohibit the unauthorized
disclosure of our proprietary rights, information and technology.
Employees
As of December 31, 2010, we had 1,910 total employees, consisting of 1,084 full-time and 826 part-time employees. Our personnel consisted of 643
employees in sales and marketing, 202 employees in research and development, 260 in general and administrative and 805 kiosk sales employees. None of
our employees is represented by a collective bargaining agreement. We believe our employee relations are good.
Item 1A. Risk Factors
In addition to the other information set forth in this annual report on Form 10-K, you should carefully consider the risk factors discussed below and in
other documents we file with the Securities and Exchange Commission, which could materially affect our business, financial condition or future results. These
are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may
materially adversely affect our business, financial condition and/or operating results.
Our actual operating results may differ significantly from our guidance.
From time to time, we may release guidance in our quarterly earnings releases, quarterly earnings conference call, or otherwise, regarding our future
performance that represents our management's estimates as of the date of release. This guidance, which includes forward-looking statements, is based on
projections prepared by our management. These projections are not prepared with a view toward compliance with published guidelines of the American
Institute of Certified Public Accountants, and neither our registered public accountants nor any other independent expert or outside party compiles or
examines the projections and, accordingly, no such person expresses any opinion or any other form of assurance with respect thereto.
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