Shutterfly 2013 Annual Report Download - page 12
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• Regional photography companies such as Ritz Camera that have established brands and
customer bases in existing photography markets; and
• Camera and photographic supply companies that rent equipment nationwide both online and
in brick-and-mortar stores such as LensRentals.com, LensProToGo, Cameralends, AbelCine,
and Adorama.
We believe the primary competitive factors in attracting and retaining customers are:
• brand recognition and trust;
• quality of products and services;
• breadth of products and services;
• user affinity and loyalty;
• customer service;
• ease of use;
• convenience; and
• price.
We believe that we compete favorably with respect to many of these factors, particularly customer trust
and loyalty, quality and breadth of products and services, and customer service. Many of our competitors
promote their products on the basis of low prices or the convenience of same-day availability for digital
photos printed in drugstores or other retail outlets. Generally, we distinguish ourselves from such
competitors principally on the basis of product quality and innovation, rather than price or same-day
delivery.
Intellectual Property
Protecting our intellectual property rights is part of our strategy for continued growth and competitive
differentiation. We seek to protect our proprietary rights through a combination of patent, copyright, trade
secret and trademark law. We enter into confidentiality and proprietary rights agreements with our
employees, consultants and business partners, and control access to and distribution of our proprietary
information. We have licensed in the past, and expect that we may license in the future, certain of our
proprietary rights to third parties.
As of December 31, 2013, we had 65 issued patents, which expire at various dates between 2019 and
2031, and more than 40 patent applications pending in the United States. Our issued patents and patent
applications relate primarily to intelligent production creation; image uploading, sharing, and editing;
ordering and sharing products; cloud image storage infrastructure; manufacturing optimization; and
mobile and social media technologies. We intend to pursue corresponding patent coverage in additional
countries to the extent we believe such coverage is appropriate and cost efficient. However, we cannot be
certain that any of our pending or any future applications will be granted. In addition, third parties could
bring invalidity, co-inventorship or similar claims with respect to any of our currently issued patents or any
patents that may be issued to us in the future.
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