TiVo 2013 Annual Report Download - page 30

Table of Contents
TiVo's products include open source software. From time to time, we may face claims seeking to enforce the terms of an applicable open
source license. Such claims could result in litigation, require us to seek licenses from third-parties in order to keep offering our software,
require us to re-engineer our software, require us to release proprietary source code, require us to provide indemnification or otherwise
subject us to liability to a customer or supplier, or require us to discontinue the sale of a product in the event re-engineering cannot be
accomplished in a timely manner, any of which could adversely affect our business.
If we release software that includes open source software licensed under version 3 of the GNU General Public License ("GPLv3"), even if
it was software provided to us by a supplier, we may be required to provide end users with the ability to install modified software on their TiVo
product, which could adversely affect our business.
If GPLv3 is widely adopted among the open source community, we may be unable to use future open source enhancements or
components in our software, which could adversely affect our business.
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In the future, copyright statutes or case law could be changed to adversely impact our business by restricting the ability of consumers to
temporally or spatially shift copyrighted materials for their own personal use. Our business would be harmed as a result. In addition, we are
aware that some media companies may attempt to form organizations to develop standards and practices in the DVR industry. These
organizations or individual media companies may attempt to require companies in the digital video recorder industry to obtain copyright or
other licenses. Lawsuits or other actions taken by these types of organizations or companies could make it more difficult for us to introduce
new services, delay widespread consumer acceptance of our products and services, restrict our use of some television content, increase our
costs, and adversely affect our business.
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We have acquired and expect to acquire other companies and businesses in the future. On February 24, 2014, we acquired Digitalsmiths
for $135 million in cash. Our future revenue growth and expansion of our business may rely on our successful integration of this and other
acquisitions. We may incur significant costs in connection with our potential transactions, including acquisitions that are not consummated.
Potential and completed acquisitions involve a number of risks. If any of the following acquisition-related risks occur, our business, operating
results or financial condition could be seriously harmed:
•The failure to realize anticipated benefits such as cost savings and revenue enhancements;
•The failure to integrate and manage acquired products and businesses effectively;
•The failure to retain key employees of the acquired company or business;
•Difficulties in combining previously separate companies or businesses into a single unit;
•The substantial diversion of management's attention from day-to-day business when evaluating and negotiating these
transactions and integrating an acquired company or business;
•The discovery, after completion of the acquisition, of unanticipated liabilities assumed from the acquired company, business
or assets, such that we cannot realize the anticipated value of the acquisition;
•Difficulties related to integrating the products of an acquired company or business in, for example, distribution, engineering,
licensing models, or customer support areas;
•Unanticipated costs; or
•The failure to understand and compete effectively in markets where we have limited experience.
Future acquisitions may involve the issuances of stock as full or partial payment of the purchase price for the acquired company or
business, grants of restricted stock, restricted stock units, or stock options to employees of the acquired companies or businesses (which
may be dilutive to existing stockholders), expenditure of substantial cash resources or the incurrence of a material amount of debt. These
arrangements may impact our liquidity, financial position, and results of operations.
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The federal securities laws and regulations, including the corporate governance and other requirements of the Sarbanes-Oxley Act of 2002
and subsequent laws impose complex and continually changing regulatory