eTrade 2001 Annual Report Download - page 89

Our ability to compete effectively is dependent to a significant degree on our brand and proprietary technology. We rely primarily on
copyright, trade secret and trademark law to protect our technology and our brand. Effective trademark protection may not be available
for our trademarks. Although we have registered the trademark “E*TRADE” in the United States and a number of other countries, and
have other registered trademarks, there can be no assurance that we will be able to secure significant protection for these trademarks.
Our competitors or others may adopt product or service names similar to “E*TRADE,” thereby impeding our ability to build brand
identity and possibly leading to customer confusion. Our inability to adequately protect the name “E*TRADE” or our other trademarks
could harm our business. Despite any precautions we take, a third party may be able to copy or otherwise obtain and use our software
or other proprietary information without authorization or develop similar software independently. Policing unauthorized use of our
technology is made especially difficult by the global nature of the Internet and difficulty in controlling the ultimate destination or
security of software or other data transmitted on it. The laws of other countries may afford us little or no effective protection for our
intellectual property. There can be no assurance that the steps we take will prevent misappropriation of our technology or that
agreements entered into for that purpose will be enforceable. In addition, litigation may be necessary in the future to:
• enforce our intellectual property rights,
• protect our trade secrets,
• determine the validity and scope of the proprietary rights of others, or
• defend against claims of infringement or invalidity.
Such litigation, whether successful or unsuccessful, could result in substantial costs and divert resources, either of which could harm
our business.
We have received in the past, and may receive in the future, notices of claims of infringement of other parties’ proprietary rights.
There can be no assurance that claims for infringement or invalidity—or any indemnification claims based on such claims—will not be
asserted or prosecuted against us. Any such claims, with or without merit, could be time consuming and costly to defend or litigate,
divert our attention and resources or require us to enter into royalty or licensing agreements. There can be no assurance that such
licenses would be available on reasonable terms, if at all.
Our efforts to expand recognition of the E*TRADE brand to areas of the financial services industry other than online trading
may not be effective
As we diversify the scope of the products and services we offer, the brand “E*TRADE” or “E*TRADE Financial” may not be as
effective for us in the future, which could harm our revenues. In addition, our efforts to further our brand as a diversified financial
services institution are largely dependent on our use of effective marketing and advertising efforts. If these efforts are not successful,
we will not have used resources effectively.
Provisions in our certificate of incorporation and bylaws, our stockholder rights plan, stock incentive plans, contracts and
management retention agreements and Delaware law could prevent or delay an acquisition of us that a shareowner may
consider to be favorable
2002. EDGAR Online, Inc.