Travelzoo 2003 Annual Report Download - page 35

related industries is uncertain and still evolving. The laws of other countries in which we may market our
services in the future are uncertain and may aÅord little or no eÅective protection of our intellectual property.
The unauthorized reproduction or other misappropriation of our proprietary technology could enable third
parties to beneÑt from our technology and brand name without paying us for them. If this were to occur, our
business could be materially adversely aÅected.
We may face liability from intellectual property litigation that could be costly to prosecute or defend
and distract management's attention with no assurance of success.
We cannot be certain that our products, content and brand names do not or will not infringe valid patents,
copyrights or other intellectual property rights held by third parties. While we have a trademark for
""Travelzoo,'' many companies in the industry have similar names including the word ""travel''. We expect that
infringement claims in our markets will increase in number as more participants enter the markets. We may
be subject to legal proceedings and claims from time to time relating to the intellectual property of others in
the ordinary course of our business. We may incur substantial expenses in defending against these third party
infringement claims, regardless of their merit, and such claims could result in a signiÑcant diversion of the
eÅorts of our management personnel. Successful infringement claims against us may result in monetary
liability or a material disruption in the conduct of our business.
We may be liable as a result of information retrieved from or transmitted over the Internet.
We may be sued for defamation, negligence, copyright or trademark infringement or other legal claims
relating to information that is published or made available in our products. These types of claims have been
brought, sometimes successfully, against online services in the past. The fact that we distribute information via
e-mail may subject us to potential risks, such as liabilities or claims resulting from unsolicited e-mail or
spamming, lost or misdirected messages, security breaches, illegal or fraudulent use of e-mail or interruptions
or delays in e-mail service. In addition, we could incur signiÑcant costs in investigating and defending such
claims, even if we ultimately are not liable. If any of these events occur, our business could be materially
adversely aÅected.
Item 2. Properties
Our principal oÇces are located in approximately 3,000 square feet of oÇce space in New York,
New York under an operating lease with HQ Global Workplaces, Inc. that expires on December 31, 2005.
Our West Coast oÇces are located in approximately 3,000 square feet of oÇce space in Mountain View,
California under an operating lease with HQ Global Workplaces, Inc. that expires on December 31, 2005. Our
Chicago oÇces are located in approximately 2,000 square feet of oÇce space under an operating lease with
Regus Business Centre that expires on June 30, 2005. Our Miami oÇces are located in approximately
1,000 square feet of oÇce space under an operating lease with Regus Business Centre that expires on May 31,
2005. We believe that our leased facilities are adequate to meet our current needs; however, we intend to
expand our operations and therefore may require additional facilities in the future. We believe that such
additional facilities are available.
Item 3. Legal Proceedings
From time to time, we are subject to legal proceedings and claims in the ordinary course of business,
including claims of alleged infringement of trademarks, copyrights and other intellectual property rights, as
well as claims by former employees. We are not currently aware of any legal proceedings or claims pending or
threatened that we believe will have, individually or in the aggregate, a material adverse eÅect on Travelzoo's
Ñnancial condition or results of operations.
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