Xerox 2011 Annual Report Download - page 27

25Xerox 2011 Annual Report
Patents, Trademarks and Licenses
Xerox and its subsidiaries were awarded 1,030 U.S. utility patents in 2011.
On that basis, we would rank 19th 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 2011.
Our patent portfolio evolves as new patents are awarded to us and as
older patents expire. As of December 31, 2011, we held more than 10,500
design and utility U.S. patents. These patents expire at various dates up to
20 years or more from their original filing 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 significant 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 identified in
the license. In 2011, we added 12 new agreements to our portfolio of
patent-licensing and sale agreements, and Xerox and its subsidiaries
were licensor or seller in nine 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, significance and time.
In the U.S., we own more than 550 U.S. 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 segments described
earlier. We have organized the marketing, selling and distribution of our
products and services by geography, channel type, customer or market,
and line of business.
Our brand is a valuable resource and
continues to be ranked in the top percentile
of the most valuable global brands.
We operate in over 160 countries worldwide.
We provide the industry’s broadest portfolio
of document technology, services and
software, and the most diverse array of
business processes and IT outsourcing
support through a variety of distribution
channels around the world.
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 midsize businesses, we continued to expand our
distribution in 2011 by acquiring nine companies.
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 unaffiliated third parties to distribute our
products in many of the countries located in these regions, and previously
entered into agreements with unaffiliated third parties distributing
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 2011, total Xerox revenues of $22.6 billion included
less than $0.1 million attributable to Iran, Sudan and Syria.
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simplifyandstreamlinetheirinfrastructuretobeboth
cost-effective and globally consistent
•Howtoimprovetheirvaluepropositionandcommunicationwith
their customers.