Zynga 2013 Annual Report Download - page 30

Table of Contents
any of which could adversely affect our business and operating results. If we fail to maintain, protect and enhance our intellectual property
rights, our business and operating results may be harmed.
We are, and may in the future be, subject to intellectual property disputes, which are costly to defend and could require us to pay significant
damages and could limit our ability to use certain technologies in the future.
From time to time, we have faced, and we expect to face in the future, allegations that we have infringed the trademarks, copyrights,
patents and other intellectual property rights of third parties, including from our competitors, non-
practicing entities and former employers of our
personnel. Patent and other intellectual property litigation may be protracted and expensive, and the results are difficult to predict. As the result
of any court judgment or settlement we may be obligated to cancel the launch of a new game, stop offering a game or certain features of a game,
pay royalties or significant settlement costs, purchase licenses or modify our games and features, or develop substitutes.
In addition, we use open source software in our games and expect to continue to use open source software in the future. From time to time,
we may face claims from companies that incorporate open source software into their products, claiming ownership of, or demanding release of,
the source code, the open source software and/or derivative works that were developed using such software, or otherwise seeking to enforce the
terms of the applicable open source license. These claims could also result in litigation, require us to purchase a costly license or require us to
devote additional research and development resources to change our games, any of which would have a negative effect on our business and
operating results.
We are involved in legal proceedings that may result in adverse outcomes.
We may be involved in claims, suits, government investigations, and proceedings arising in the ordinary course of our business, including
actions with respect to intellectual property claims, privacy, data protection or law enforcement matters, tax matters, labor and employment
claims, commercial claims, as well as stockholder derivative actions, class action lawsuits, and other matters. Such claims, suits, government
investigations, and proceedings are inherently uncertain and their results cannot be predicted with certainty. Regardless of the outcome, such
legal proceedings can have an adverse impact on us because of legal costs, diversion of management and other personnel, and other factors. In
addition, it is possible that a resolution of one or more such proceedings could result in liability, penalties, or sanctions, as well as judgments,
consent decrees, or orders preventing us from offering certain features, functionalities, products, or services, or requiring a change in our
business practices, products or technologies, which could in the future materially and adversely affect our business, operating results, and
financial condition. See the section titled “Legal Matters” included in Note 12—“Commitments and Contingencies” in the notes to the
consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Programming errors or flaws in our games could harm our reputation or decrease market acceptance of our games, which would harm our
operating results.
Our games may contain errors, bugs, flaws or corrupted data, and these defects may only become apparent after their launch, particularly
as we launch new games and rapidly release new features to existing games under tight time constraints. We believe that if our players have a
negative experience with our games, they may be less inclined to continue or resume playing our games or recommend our games to other
potential players. Undetected programming errors, game vulnerabilities that may be exploited by cheating programs and other forms of
misappropriation, game defects and data corruption can disrupt our operations, adversely affect the game experience of our players by allowing
players to gain unfair advantage, misappropriate virtual goods, harm our reputation, cause our players to stop playing our games, divert our
resources and delay market acceptance of our games, any of which could result in legal liability to us or harm our operating results.
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