Support.com 2005 Annual Report Download - page 24

We may not obtain sufficient patent protection, which could harm our competitive position, increase our expenses and harm
our business.
Our success and ability to compete depend to a significant degree upon the protection of our software and other proprietary
technology. It is possible that:
• our pending patent applications may not be issued;
• competitors may independently develop similar technologies or design around any of our patents;
• patents issued to us may not be broad enough to protect our proprietary rights; and
We rely upon patents, trademarks, copyrights and trade secrets to protect our proprietary rights and if these rights are not
sufficiently protected, it could harm our ability to compete and to generate revenue.
• our issued patents could be successfully challenged.
We rely on a combination of laws, such as patents, copyright, trademark and trade secret laws, and contractual restrictions, such
as confidentiality agreements and licenses, to establish and protect our proprietary rights. Our ability to compete and grow our
business could suffer if these rights are not adequately protected. Our proprietary rights may not be adequately protected because:
• laws and contractual restrictions may not adequately prevent misappropriation of our technologies or deter others from
developing similar technologies; and
Also, the laws of other countries in which we market our products may offer little or no protection of our proprietary
technologies. Reverse engineering, unauthorized copying or other misappropriation of our proprietary technologies could enable third
parties to benefit from our technologies without paying us for them, which would harm our competitive position and market share.
We may face intellectual property infringement claims that could be costly to defend and result in our loss of significant
rights.
• policing unauthorized use of our products and trademarks is difficult, expensive and time-consuming, and we may be unable
to determine the existence or extent of this unauthorized use.
Other parties may assert intellectual property infringement claims against us or our customers and our products may infringe the
intellectual property rights of third parties. Intellectual property litigation is expensive and time-consuming and could divert
management’s attention from our business. If there is a successful claim of infringement, we may be required to develop non-
infringing technology or enter into royalty or license agreements which may not be available on acceptable terms, if at all. Our failure
to develop non-infringing technologies or license the proprietary rights on a timely basis would harm our business.
We have recorded long-lived assets, and our results of operations would be adversely affected if their value becomes impaired.
Goodwill and identifiable intangible assets were recorded as a result of our acquisition of substantially all of the assets of Core
Networks Incorporated on September 2, 2004. We assess the impairment of goodwill annually or more often if events or changes in
circumstances indicate that the carrying value may not be recoverable. We assess the impairment of acquired product rights and other
identifiable intangible assets whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.
An impairment loss would be recognized when the sum of the discounted future net cash flows expected to result from the use of the
asset and its eventual disposition is less than its carrying amount. Such impairment loss would be measured as the difference between
the carrying amount of the asset and its fair value. Material differences may result in write-downs of net long-lived and intangible
assets, which would cause our operating results to suffer.
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