Xerox 2010 Annual Report Download - page 24

22
Our Business
Patents, Trademarks and Licenses
Xerox and its subsidiaries were awarded 1,031 U.S. utility patents in
2010. On that basis, we would have ranked 20th on the list of companies
that were awarded the most U.S. patents during the year. Including
our research partner Fuji Xerox, we were awarded over 1,600 U.S.
utility patents in 2010. Our patent portfolio evolves as new patents are
awarded to us and as older patents expire. As of December 31, 2010, we
held almost 10,200 design and utility U.S. patents. These patents expire
atvariousdatesupto20yearsormorefromtheiroriginallingdates.
While we believe that our portfolio of patents and applications has value,
in general no single patent is essential to our business or any individual
segment. In addition, any of our proprietary rights could be challenged,
invalidatedorcircumvented,ormaynotprovidesignicantcompetitive
advantages.
In the U.S., we are party to numerous patent-licensing agreements
and, in a majority of them we license or assign our patents to others in
return for revenue and/or access to their patents. Most patent licenses
expireconcurrentlywiththeexpirationofthelastpatentidentiedin
the license. In 2010, we added 16 new agreements to our portfolio of
patent-licensing and sale agreements, and Xerox and its subsidiaries
were licensor or seller in 14 of the agreements. We are also a party
to a number of cross-licensing agreements with companies that hold
substantial patent portfolios, including Canon, Microsoft, IBM, Hewlett-
Packard, Oce, Sharp, Samsung and Seiko Epson. These agreements vary
insubjectmatter,scope,compensation,signicanceandtime.
In the U.S., we own more than 650 trademarks, either registered or
applied for. These trademarks have a perpetual life, subject to renewal
every 10 years. We vigorously enforce and protect our trademarks.
Marketing and Distribution
We manage our business based on the principal business segments
described earlier. We have organized the marketing, selling and
distribution of our products and services by geography, channel type
and line of business.
We sell our products and services directly to customers through our
worldwide sales force and through a network of independent agents,
dealers, value-added resellers, systems integrators and the Web.
In large enterprises, we follow a services-led approach that enables us
to address two basic challenges facing large enterprise customers:
• How to optimize infrastructure to be both cost-effective and globally
consistent
• How to improve their value proposition and communication with their
customers
Our go-to-market approach includes the largest direct sales force in the
industry, with customers served by Client Managing Directors, Account
GeneralManagersandSalesRepresentatives.
For small and mid-size business, we continue to expand our distribution
partnerships in North America with additional information technology
resellers and by enhancing our network of independent agents. In 2010,
we acquired two companies to further expand this distribution capacity.
In Europe, Africa, the Middle East and parts of Asia, we distribute our
products through Xerox Limited, a company established under the
laws of England, and related non-U.S. companies. Xerox Limited enters
intodistributionagreementswithunafliatedthirdpartiestoprovide
distribution of our products in many of the countries located in these
regions,andpreviouslyenteredintoagreementswithunafliated
third parties providing distribution of our products in Iran, Sudan and
Syria. Iran, Sudan and Syria, among others, have been designated
as state sponsors of terrorism by the U.S. Department of State and
are subject to U.S. economic sanctions. We maintain an export and
sanctions compliance program and believe that we have been and are
in compliance with U.S. laws and government regulations for these
countries. We have no assets, liabilities or operations in these countries
other than liabilities under the distribution agreements. After observing
required prior notice periods, Xerox Limited terminated its distribution
agreements with distributors servicing Sudan and Syria in August 2006
and terminated its distribution agreement with the distributor servicing
Iran in December 2006. Now, Xerox only has legacy obligations to third
parties, such as providing spare parts and supplies to these third parties.
In 2010, total Xerox revenues of $21.6 billion included less than $0.2
million attributable to Iran, Sudan and Syria.
Our brand is valued at an estimated $6.1
billion and was ranked as a “Best Global
Brand” by Business Week.