Zynga 2011 Annual Report Download - page 9

Table of Contents
While most of the intellectual property we use is created by us, we have acquired rights to proprietary intellectual property. We have also
obtained rights to use intellectual property through licenses and service agreements with third parties. These licenses typically limit our use of
intellectual property to specific uses and for specific time periods.
We protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions. We
actively seek patent protection covering inventions originating from the company and acquire patents we believe may be useful or relevant to our
business. We control access to our proprietary technology by entering into confidentiality and invention assignment agreements with our
employees and contractors, and confidentiality agreements with third parties. We also actively engage in monitoring and enforcement activities
with respect to infringing uses of our intellectual property by third parties.
In addition to these contractual arrangements, we also rely on a combination of trade secret, copyright, trademark, trade dress, domain
name and patents to protect our games and other intellectual property. We typically own the copyright to the software code to our content, as
well as the brand or title name trademark under which our games are marketed. We pursue the registration of our domain names, trademarks, and
service marks in the United States and in locations outside the United States. Our registered trademarks in the United States include “Zynga,”
the
names of our games and company taglines, among others.
Circumstances outside our control could pose a threat to our intellectual property rights. For example, effective intellectual property
protection may not be available in the United States or other countries in which our games are distributed. Also, the efforts we have taken to
protect our proprietary rights may not be sufficient or effective. Any significant impairment of our intellectual property rights could harm our
business or our ability to compete. Also, protecting our intellectual property rights is costly and time-
consuming. Any unauthorized disclosure or
use of our intellectual property could make it more expensive to do business, thereby harming our operating results.
Companies in the Internet, games, social media, technology and other industries may own large numbers of patents, copyrights and
trademarks and may frequently request license agreements, threaten litigation or file suit against us based on allegations of infringement or other
violations of intellectual property rights. From time to time, we have faced, and we expect to face in the future, allegations by third parties,
including our competitors and non-practicing entities, that we have infringed their trademarks, copyrights, patents and other intellectual property
rights. As we face increasing competition and as our business grows, we will likely face more claims of infringement.
Competition
We face significant competition in all aspects of our business. Specifically, we compete for the leisure time, attention and discretionary
spending of our players with other social game developers on the basis of a number of factors, including quality of player experience, brand
awareness and reputation and access to distribution channels.
We believe we compete favorably on these factors. However, our industry is evolving rapidly and is becoming increasingly competitive.
Other developers of social games could develop more compelling content that competes with our social games and adversely affects our ability
to attract and retain players and their entertainment time. These competitors, including companies of which we may not be currently aware, may
take advantage of social networks, access to a large user base and their network effects to grow rapidly and virally.
Our competitors include:
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Game Developers for Facebook and Other Social Networks:
We face competition from a number of competitors who develop social
games for use on Facebook and other social networks. These competitors, some of which have significant financial, technical and
other resources, greater name recognition and have longer operating histories, may create similar games to reach our players. Some