Shutterfly 2014 Annual Report Download - page 12

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• 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, 2014, we had 77 issued patents, which expire at various dates between 2019 and
2032, 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.
Our primary brands are ‘‘Shutterfly,’’ ‘‘Tiny Prints,’’ ‘‘Wedding Paper Divas,’’ and ‘‘BorrowLenses.’’
We hold applications and/or registrations for the Shutterfly, Tiny Prints, and Wedding Paper Divas
trademarks in our major markets of the United States and Canada, as well as in the European Community.
We also hold applications and registrations for the Shutterfly mark in Mexico, Japan and China, and for
the Shutterfly and Tiny Prints marks in Australia and New Zealand. We own the domains Shutterfly.com,
TinyPrints.com, WeddingPaperDivas.com and Groovebook.com among others.
Government Regulation
The legal environment of the Internet is constantly evolving in the United States and elsewhere. The
manner in which existing laws and regulations will be applied to the Internet in general, and how they will
relate to our business in particular, is unclear in many cases. Accordingly, we often cannot be certain how
existing laws will apply in the online context, including with respect to such topics as privacy, defamation,
pricing, credit card fraud, advertising, taxation, sweepstakes, promotions, content regulation, net
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