Tucows 2015 Annual Report Download - page 44

Our business and financial performance could be adversely affected, directly or indirectly, by disasters, by
terrorist activities or by international hostilities.
Neither the occurrence nor the potential impact of disasters, terrorist activities or international hostilities can be
predicted. However, these occurrences could impact us directly as a result of damage to our facilities or by preventing us
from conducting our business in the ordinary course, or indirectly as a result of their impact on our customers, suppliers or
other counterparties. We could also suffer adverse consequences to the extent that disasters, terrorist activities or
international hostilities affect the financial markets or the economy in general or in any particular region. For example, a
significant earthquake could impact us directly by disrupting our business operations.
Our ability to mitigate the adverse consequences of such occurrences is in part dependent on the quality of our
resiliency planning, and our ability, if any, to anticipate the nature of any such event that occurs. The adverse impact of
disasters or terrorist activities or international hostilities also could be increased to the extent that there is a lack of
preparedness on the part of national or regional emergency responders or on the part of other organizations and businesses
that we deal with, particularly those that we depend upon but have no control over.
Risks Related To the Internet and Our Technology
Our business could be materially harmed if the administration and operation of the Internet no longer rely upon the
existing domain system.
The domain registration industry continues to develop and adapt to changing technology. This development may
include changes in the administration or operation of the Internet, including the creation and institution of alternate systems
for directing Internet traffic without the use of the existing domain system. Some of our competitors have begun
registering domains with extensions that rely on such alternate systems. These competitors are not subject to ICANN
accreditation requirements and restrictions. Other competitors have attempted to introduce naming systems that use
keywords rather than traditional domains. The widespread acceptance of any alternative systems could eliminate the need
to register a domain to establish an online presence and could materially adversely affect our business, financial condition
and results of operations.
The law relating to the use of and ownership in intellectual property on the Internet is currently unsettled and may
expose us to unforeseen liabilities.
There have been ongoing legislative developments and judicial decisions concerning trademark infringement
claims, unfair competition claims and dispute resolution policies relating to the registration of domains. To help protect
ourselves from liability in the face of these ongoing legal developments, we have taken the following precautions:
• our standard registration agreement requires that each registrant indemnify, defend and hold us harmless for any
dispute arising from the registration or use of a domain registered in that person’s name; and
• since December 1, 1999, we have required our resellers to ensure that all registrants are bound to the UDRP as
approved by ICANN.
Despite these precautions, we cannot be assured that our indemnity and dispute resolution policies will be
sufficient to protect us against claims asserted by various third parties, including claims of trademark infringement and
unfair competition.
New laws or regulations concerning domains and registrars may be adopted at any time. Our responses to
uncertainty in the industry or new regulations could increase our costs or prevent us from delivering our domain
registration services over the Internet, which could delay growth in demand for our services and limit the growth of our
revenues. New and existing laws may cover issues such as:
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