Tesla 2014 Annual Report Download - page 53

Table of Contents
laws of the United States, and policing the unauthorized use of our intellectual property is difficult. Unauthorized use or infringement of our
trademarks in countries which have a “first-to-file” system could affect our ability to successfully grow our business internationally.
Our patent applications may not result in issued patents, which may have a material adverse effect on our ability to prevent others from
commercially exploiting products similar to ours.
The status of patents involves complex legal and factual questions and the breadth of patented claims is uncertain. We cannot be certain
that we are the first creator of inventions covered by pending patent applications or the first to file patent applications on these inventions, nor
can we be certain that our pending patent applications will result in issued patents or that any of our issued patents will afford sufficient
protection against a competitor with similar technology. In addition, patent applications filed in foreign countries are subject to laws, rules and
procedures that differ from those of the United States, and thus we cannot be certain that foreign patent applications related to issued U.S.
patents will result in issued patents in those foreign jurisdictions. Furthermore, even if these patent applications do result in issued patents, some
foreign countries provide significantly less effective patent enforcement than in the United States. In addition, patents issued to us may be
infringed upon or designed around by others and others may obtain patents that we need to license or design around, either of which would
increase costs and may adversely affect our business, prospects, financial condition and operating results.
Our trademark applications in certain countries remain subject to outstanding opposition proceedings.
We currently sell and market our products and services in various countries under our Tesla marks. We have filed trademark applications
for our Tesla marks and opposition proceedings to trademark applications of third parties in various countries in which we currently sell and plan
to sell our products and services. Certain of our trademark applications are subject to outstanding opposition proceedings brought by owners or
applicants alleging prior use of similar marks. If we cannot resolve these oppositions and thereby secure registered rights in these countries, our
ability to challenge third party users of the Tesla marks will be reduced and the value of the marks representing our exclusive brand name in
these countries will be diluted. In addition, there is a risk that the prior rights owners could in the future take actions to challenge our use of the
Tesla marks in these countries. Such actions could have a severe impact on our position in these countries and may inhibit our ability to use the
Tesla marks in these countries. If we were prevented from using the Tesla marks in any or all of these countries, we would need to expend
significant additional financial and marketing resources on establishing an alternative brand identity in these markets.
Our facilities or operations could be damaged or adversely affected as a result of disasters or unpredictable events.
Our corporate headquarters in Palo Alto and Tesla Factory in Fremont are located in Northern California, a region known for seismic
activity. If major disasters such as earthquakes, fires, floods, hurricanes, wars, terrorist attacks, computer viruses, pandemics or other events
occur, or our information system or communications network breaks down or operates improperly, our headquarters and production facilities
may be seriously damaged, or we may have to stop or delay production and shipment of our products. In addition, our lease for our Palo Alto
facility permits the landlord to terminate the lease following a casualty event if the needed repairs are in excess of certain thresholds and we do
not agree to pay for any uninsured amounts. We may incur expenses relating to such damages, which could have a material adverse impact on
our business, operating results and financial condition.
If our suppliers fail to use ethical business practices and comply with applicable laws and regulations, our brand image could be harmed
due to negative publicity.
Our core values, which include developing the highest quality electric vehicles while operating with integrity, are an important component
of our brand image, which makes our reputation particularly sensitive to
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