Tucows 2015 Annual Report Download - page 35

If the acquired assets are not integrated into our business as we anticipate, we may not be able to achieve the
benefits of these acquired assets or realize the value paid for the asset acquisitions, which could materially harm our
business, financial condition and results of operations.
We do not control the means by which end users access our web sites and material changes to current navigation
practices or technologies or marketing practices could result in a material adverse effect on our business.
The success of our parked pages business depends in large part upon the current end user tendency to type desired
destinations directly into the web browser. End users employ this practice of direct navigation to access our web sites
primarily through the following methods: directly accessing our web sites by typing descriptive keywords or keyword
strings into the uniform resource locator, or URL, address box of an Internet browser, accessing our web sites by clicking
on bookmarked web sites and accessing our web sites indirectly through search engines and directories.
Each of these methods requires the use of a third party product or service, such as an Internet browser or search
engine or directory. Internet browsers may provide alternatives to the URL address box to locate web sites, and search
engines may from time to time change and establish rules regarding the indexing and optimization of web sites. Product
developments and market practices for these means of access to our web sites are not within our control. We may
experience a decline in traffic to our web sites if third party browser technologies or search engine methodologies and
rules, including those affecting marketing efforts, are changed to our disadvantage.
We may experience unforeseen liabilities in connection with our domain name portfolio, which could negatively impact
our financial results.
We currently own a portfolio of domain names that were previously owned by another third-party. In addition, we
have acquired, and intend to continue to acquire, other previously owned domain names. While we have a policy against
acquiring domain names that infringe on third-party intellectual property rights, including trademarks or confusingly
similar business names, in some cases, these acquired names may have trademark significance that is not readily apparent
to us or is not identified by us in the bulk purchasing process. As a result, we may face demands by third party trademark
owners asserting infringement or dilution of their rights and seeking transfer of the domain names through the Uniform
Domain Name Resolution Policy, or UDRP, adopted by ICANN or actions under the Anticybersquatting Consumer
Protection Act, or ACPA. We may also face actions from third-parties under national trademark or anti-competition
legislation.
We review each claim or demand on its merits and we intend to transfer any such previously owned domain
names acquired by us to parties that have demonstrated a valid prior right of claim. We cannot, however, guarantee that we
will be able to resolve all such disputes without litigation. The potential violation of third party intellectual property rights
and potential causes of action under consumer protection laws may subject us to unforeseen liabilities, including
injunctions and judgments for monetary damages.
Once any infringement is detected, disputes concerning the ownership or rights to use intellectual property could be
costly and time-consuming to litigate, may distract management from operating the business, and may result in us
losing significant rights and our ability to operate all or a portion of our business.
Claims of infringement of intellectual property or other rights of third parties against us could result in substantial
costs. Third parties may assert claims of infringement of patents or other intellectual property rights against us concerning
past, current or future technologies. Content obtained from third parties and distributed over the Internet by us may result
in liability for defamation, negligence, intellectual property infringement, product or service liability and dissemination of
computer viruses or other disruptive problems. We may also be subject to claims from third parties asserting trademark
infringement, unfair competition and violation of publicity and privacy rights relating specifically to domains. As a domain
name registrar, we regularly become involved in disputes over registration of domain names. Most of these disputes arise
as a result of a third party registering a domain name that is identical or similar to another party’s trademark or the name of
a living person. These disputes are typically resolved through the UDRP, ICANN’s administrative process for domain
name dispute resolution, or less frequently through litigation under the ACPA, or under general theories of trademark
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