eFax 2008 Annual Report Download - page 19

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• Regulatory or competitive developments affecting our markets;
• Investor perceptions of us and comparable public companies;
• Conditions and trends in the communications, messaging and Internet-related industries;
• Announcements of technological innovations and acquisitions;
• Introduction of new services by us or our competitors;
• Developments with respect to intellectual property rights;
• Conditions and trends in the Internet and other technology industries;
• Rumors, gossip or speculation published on public chat or bulletin boards;
• General market conditions; and
• Geopolitical events such as war, threat of war or terrorist actions.
In addition, the stock market has from time to time experienced significant price and volume fluctuations that have affected the
market prices for the common stocks of technology and other companies, particularly communications and Internet companies. These
broad market fluctuations have previously resulted in a material decline in the market price of our common stock. In the past,
following periods of volatility in the market price of a particular company’s securities, securities class action litigation has often been
brought against that company. We may become involved in this type of litigation in the future. Litigation is often expensive and
diverts management’s attention and resources, which could have a material adverse effect on our business, prospects, financial
condition, operating results and cash flows.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
As of December 31, 2008, we are leasing approximately 40,000 square feet of office space for our headquarters in Los Angeles,
California under a lease that expires in January 2010. We lease this space from an entity indirectly controlled by our Chairman of the
Board. Additionally, we have smaller leased office facilities in British Columbia; California; Hong Kong; Illinois; and Ireland.
All of our network equipment is housed either at our leased properties or at one of our multiple co-location facilities around the
world.
Item 3. Legal Proceedings
Overview of Patent Litigation
As part of our continuing effort to prevent the unauthorized use of our intellectual property, we have initiated litigation against
the following companies, among others, for infringing our patents relating to Internet fax and other messaging technologies: Captaris,
Inc., a subsidiary of Open Text Corporation (“Captaris”), Integrated Global Concepts, Inc. (“IGC”), Venali, Inc. (“Venali”) and Protus
IP Solutions, Inc. (“Protus”). Captaris, IGC, Venali and Protus have each filed counterclaims against us, which are described in more
detail below.
Overview of Legal Proceedings Against Us
From time to time, we are involved in litigation and other disputes or regulatory inquiries that arise in the ordinary course of our
business. Many of these actions are filed in response to patent actions filed by us against the plaintiffs. The number and significance of
these disputes and inquiries has increased as our business expands and j2 Global grows. Any claims or regulatory actions against us,
whether meritorious or not, could be time-consuming, result in costly litigation, require significant management time and result in
diversion of significant operational resources.