TeleNav 2013 Annual Report Download - page 17

Table of Contents
As of July 31, 2013, we owned the U.S. Patent and Trademark Office registered trademarks for Goby®, Telenav®, Sipity®, ONMYWAY®,
Thinknear® and Whereboutz®, as well as the logos for Telenav and Scout. We also own the Telenav and design logo registered trademark in the
United Kingdom and European Union. We have several unregistered trademarks, including the names Always There Navigation™, Drive with
Friends™, Evie™, Geobehavioral™, Geocookie™ , … gets you and gets you there™, MyTies™, MyMileage™, RoadAssist™, Scout™, Situational
Targeting™, Smart Planner™, Telenav Connected Service™, Telenav GPS Navigator™, Telenav Navigator™, Telenav Scout™ and Telenav
Shotgun™. We endeavor to enter into agreements with our employees and contractors and with parties with which we do business in order to limit
access to and disclosure of our proprietary information. We cannot be certain that the steps we have taken will prevent unauthorized use or reverse
engineering of our technology. Moreover, others may independently develop technologies that are competitive with ours or that infringe our
intellectual property. The enforcement of our intellectual property rights also depends on the success of our legal actions against these infringers, but
these actions may not be successful, even when our rights have been infringed.
We also enter into various types of licensing agreements to obtain access to technology or data that end users utilize in connection with our
navigation services. Our contracts with certain licensors include minimum guaranteed royalty payments, which are payable regardless of the ultimate
volume of revenue derived from the number of paying end users. Our most important agreements are with the providers of maps pursuant to which
we generally pay a monthly fee per end user, a per transaction fee or a revenue sharing percentage for data provided based in each case upon a multi-
tiered fee structure. We obtain map data pursuant to an agreement with TomTom North America, Inc., or TomTom, dated July 1, 2009, as amended.
Our agreement with TomTom has an initial term of five years (except for off-board applications sold on Apple's App Store and selected vehicle
navigation system applications) and will automatically renew for each supported application for successive one year periods thereafter, unless either
party provides written notice of termination at least 90 days prior to the expiration of the then-current term for each supported application. In
September 2010, we amended our agreement with TomTom to change the fee structure for map and POI data we use to provide our services for
Sprint's bundled offerings. Pursuant to the amended agreement, we pay TomTom a percentage of fees we collect from Sprint for basic navigation
services and our gross advertising revenue and a flat monthly fee per subscriber for premium navigation services. We also pay TomTom certain
guaranteed minimum payments for such services. The license period for navigation services provided for Sprint's bundled offerings was to expire on
the earlier of December 31, 2012 or termination of our agreement with Sprint with respect to the those bundled services. Effective July 1, 2012, we
amended our TomTom agreement, to (a) extend the license period for navigation services provided for Sprint's bundled offering to June 30, 2013;
(b) license TomTom map data for our automotive navigation product, Scout for Cars, through December 31, 2014; and (c) license TomTom map data
for our HTML5, browser-based, voice-guided turn by turn GPS navigation service for mobile phones, Scout for Apps, through December 31, 2014.
We also obtain map data from HERE North America, LC, formerly known as Navigation Technologies Corporation, a Nokia company, or
HERE, pursuant to an agreement dated December 1, 2002. Our agreement with HERE had an initial term of one year and since has been extended
until January 31, 2014.
Our agreements with TomTom and HERE also allow a party to terminate the agreement if the other party materially breaches its obligations
and fails to cure such breach. In addition, we obtain other data such as weather updates, gas prices, POI and traffic information from additional
providers.
Competition
The markets for development, distribution and sale of location services and advertising services are highly competitive. Many of our
competitors have greater name recognition, larger customer bases and significantly greater financial, technical, marketing, public relations, sales,
distribution and other resources than we do.
Competitors are offering mobile location services that have similar functionality to ours for free. For example, Google offers free voice-guided
turn by turn navigation as part of its release of Google Maps Navigation for mobile devices based on the Android 1.6 and higher operating system
platform, and Nokia provides a download for its latest version of Nokia Maps on its smartphones which also provides voice-guided turn by turn
navigation functions. Microsoft Corporation, or Microsoft, also provides a free voice-guided turn by turn navigation solution on its Windows Mobile
and Windows Phone operating systems. In 2012, Apple began offering maps and voice-guided turn by turn directions as part of its operating system
release (iOS6). Waze Inc. was recently acquired by Google, and its service will continue to be offered by Google to consumers. Competition from
these free offerings may reduce our revenue and harm our business. If our wireless carrier customers can offer these mobile location services to their
subscribers for free, they may elect to cease their relationships with us, alter or reduce the manner or extent to which they market or offer our services
or require us to substantially reduce our subscription fees or pursue other business strategies that may not prove successful.
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