Under Armour 2010 Annual Report Download - page 16

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Our practice, and the general practice in the apparel and footwear industries, is to offer retail customers the
right to return defective or improperly shipped merchandise. Because of long lead-times for design and
production of our products, from time to time we commence production of new products before receiving orders
for those products. This affects our inventory levels for new products.
Intellectual Property
We believe we own the internally developed material trademarks used in connection with the marketing,
distribution and sale of all our products, both domestically and internationally, where our products are currently
sold or manufactured. Our major trademarks include the UA Logo and UNDER ARMOUR®, both of which are
registered in the United States, Canada, the European Union, Japan and several other foreign countries in which
we sell or plan to sell our products. We also own trademark registrations for UA®, ARMOUR®, HEATGEAR®,
COLDGEAR®, ALLSEASONGEAR®, PROTECT THIS HOUSE®, THE ADVANTAGE IS UNDENIABLE ®,
DUPLICITY®, MPZ®, BOXERJOCK®, RECHARGE®, ARMOURBITE®, ATHLETES RUN®, and for other of
our trademarks. In addition, we have applied to register numerous other trademarks including: CHARGED
COTTON™, GAMEDAY ARMOUR™, and MICRO G™. We also own internally developed domain names for
our primary trademarks and hold copyright registrations for several commercials, as well as for certain artwork.
We intend to continue to strategically register, both domestically and internationally, trademarks and copyrights
we utilize today and those we develop in the future. We will continue to aggressively police our trademarks and
pursue those who infringe, both domestically and internationally.
We believe the distinctive trademarks we use in connection with our products are important in building our
brand image and distinguishing our products from those of others. These trademarks are among our most
valuable assets. In addition to our distinctive trademarks, we also place significant value on our trade dress,
which is the overall image and appearance of our products, and we believe our trade dress helps to distinguish
our products in the marketplace.
The intellectual property rights in much of the technology, materials and processes used to manufacture our
products are often owned or controlled by our suppliers. However, we seek to protect certain innovative products
and features that we believe to be new, strategic and important to our business. In 2010, we filed several patent
applications in connection with certain of our products and designs that we believe offer a unique utility or
function. We will continue to file patent applications where we deem appropriate to protect our inventions and
designs, and we expect the number of applications to grow as our business grows and as we continue to innovate
in a range of product categories.
Competition
The market for performance athletic apparel and footwear is highly competitive and includes many new
competitors as well as increased competition from established companies expanding their production and
marketing of performance products. The fabrics and technology used in manufacturing our products are generally
not unique to us, and we do not currently own any fabric or process patents. Many of our competitors are large
apparel, footwear and sporting goods companies with strong worldwide brand recognition and significantly
greater resources than us, such as Nike and adidas. We also compete with other manufacturers, including those
specializing in outdoor apparel, and private label offerings of certain retailers, including some of our customers.
In addition, we must compete with others for purchasing decisions, as well as limited floor space at retailers.
We believe we have been successful in this area because of the relationships we have developed and as a result of
the strong sales of our products. However, if retailers earn greater margins from our competitors’ products, they
may favor the display and sale of those products.
We believe we have been able to compete successfully because of our brand image and recognition, the
performance and quality of our products and our selective distribution policies. We also believe our focused
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