Travelzoo 2004 Annual Report Download - page 35

We may be unable to protect our registered trademark or other proprietary intellectual property rights.
Our success depends to a signiÑcant degree upon the protection of the Travelzoo brand name. We rely
upon a combination of copyright, trade secret and trademark laws and non-disclosure and other contractual
arrangements to protect our intellectual property rights. The steps we have taken to protect our proprietary
rights, however, may not be adequate to deter misappropriation of proprietary information.
The U.S. Patent and Trademark OÇce registered the trademark for ""Travelzoo'' on January 23, 2001. If
we are unable to protect our rights in the mark, a key element of our strategy of promoting Travelzoo as a
brand could be disrupted and our business could be adversely aÅected. We may not be able to detect
unauthorized use of our proprietary information or take appropriate steps to enforce our intellectual property
rights. In addition, the validity, enforceability and scope of protection of intellectual property in Internet-
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.
Item 2. Properties
Our principal oÇces are located in approximately 4,000 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 July 31, 2005. Our Miami oÇces are located in approximately 2,000 square
feet of oÇce space under an operating lease with Regus Business Centre that expires on December 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 our Ñnancial
condition or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth quarter of 2004.
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