TeleNav 2010 Annual Report Download - page 37

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Government regulation designed to protect end user privacy may make it difficult for us to provide our
services or adopt advertising based revenue models.
We transmit and store a large volume of personal information in the course of providing our LBS. This
information is increasingly subject to legislation and regulations in numerous jurisdictions around the world. This
government action is typically intended to protect the privacy and security of personal information that is
collected, stored and transmitted in or from the governing jurisdiction.
Legislation may also be adopted in various jurisdictions that prohibits use of personal information and
search histories to target end users with tailored advertising, or provide advertising at all. Although our current
business model does not rely on advertising revenue, we may explore advertising revenue in the future to
improve ARPU in certain markets.
We could be adversely affected if domestic or international legislation or regulations are expanded to
require changes in our business practices or if governing jurisdictions interpret or implement their legislation or
regulations in ways that negatively affect our business. For example, the USA PATRIOT Act provides certain
rights to U.S. law enforcement authorities to obtain personal information in the control of U.S. persons and
entities without notifying the affected individuals. If we are required to allocate significant resources to modify
the delivery of our services to enable enhanced legal interception of the personal information that we transmit
and store, our results of operations and financial condition may be adversely affected.
In addition, because various foreign jurisdictions have different laws and regulations concerning the storage
and transmission of personal information, we may face unknown requirements that pose compliance challenges
in new international markets that we seek to enter. Such variation could subject us to costs, delayed service
launches, liabilities or negative publicity that could impair our ability to expand our operations into some
countries and therefore limit our future growth.
As privacy and data protection have become more sensitive issues, we may also become exposed to
potential liabilities as a result of differing views on the privacy of personal information. These and other privacy
concerns could adversely impact our business, results of operations and financial condition.
If we are unable to protect our intellectual property and proprietary rights, our competitive position and our
business could be harmed.
We rely primarily on a combination of patent laws, trademark laws, copyright laws, trade secrets,
confidentiality procedures and contractual provisions to protect our proprietary technology. However, our issued
patents and any future patents that may issue may not survive a legal challenge to their scope, validity or
enforceability, or provide significant protection for us. The failure of our patents to adequately protect our
technology might make it easier for our competitors to offer similar products or technologies. In addition, patents
may not issue from any of our current or any future applications.
Monitoring unauthorized use of our intellectual property is difficult and costly. The steps we have taken to
protect our proprietary rights may not be adequate to prevent misappropriation of our intellectual property. We
may not be able to detect unauthorized use of, or take appropriate steps to enforce, our intellectual property
rights. Our competitors may also independently develop similar technology. In addition, the laws of many
countries do not protect our proprietary rights to as great an extent as do the laws of the United States. Any
failure by us to meaningfully protect our intellectual property could result in competitors offering products that
incorporate our most technologically advanced features, which could seriously reduce demand for our LBS. In
addition, we may in the future need to initiate infringement claims or litigation. Litigation, whether we are a
plaintiff or a defendant, can be expensive, time consuming and may divert the efforts of our technical staff and
managerial personnel, which could harm our business, whether or not such litigation results in a determination
favorable to us.
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