iRobot 2005 Annual Report Download - page 18

We believe that the principal competitive factors in the market for robots include product features and
performance for the intended mission, cost of purchase and total cost of system operation, including
maintenance and support, ease of use and integration with existing equipment, quality, reliability and customer
support and brand and reputation.
Our ability to remain competitive will depend to a great extent upon our ongoing performance in the areas
of product development and customer support. We cannot assure you that our products will continue to
compete favorably or that we will be successful in the face of increasing competition from new products and
enhancements introduced by existing competitors or new companies entering the markets in which we provide
products.
Intellectual Property
We believe that our continued success depends in large part on our proprietary technology, the
intellectual skills of our employees and the ability of our employees to continue to innovate. We rely on a
combination of patent, copyright, trademark and trade secret laws, as well as confidentiality agreements, to
establish and protect our proprietary rights.
As of December 31, 2005, we held 24 U.S. patents and more than 25 pending U.S. patent applications.
Also, we held six foreign patents and more than 20 pending foreign patent applications. Our first U.S. patent is
set to expire in 2008. We do not expect the expiration of this patent to adversely affect our intellectual
property position. Our other U.S. patents will begin to expire in 2019. We will continue to file and prosecute
patent (or design registration, as applicable) applications when and where appropriate to attempt to protect
our rights in our proprietary technologies. We also encourage our employees to continue to invent and develop
new technologies so as to maintain our competitiveness in the marketplace. It is possible that our current
patents, or patents which we may later acquire, may be successfully challenged or invalidated in whole or in
part. It is also possible that we may not obtain issued patents for our pending patent applications or other
inventions we seek to protect. In that regard, we sometimes permit certain intellectual property to lapse or go
abandoned under appropriate circumstances and due to uncertainties inherent in prosecuting patent applica-
tions, sometimes patent applications are rejected and we subsequently abandon them. It is also possible that
we may not develop proprietary products or technologies in the future that are patentable, or that any patent
issued to us may not provide us with any competitive advantages, or that the patents of others will harm or
altogether preclude our ability to do business.
Our registered U.S. trademarks include iRobot, Roomba, PackBot and Virtual Wall. Our marks, iRobot
and Roomba, and certain other trademarks, have also been registered in selected foreign countries.
Our means of protecting our proprietary rights may not be adequate and our competitors may
independently develop technology that is similar to ours. Legal protections afford only limited protection for
our technology. The laws of many countries do not protect our proprietary rights to as great an extent as do the
laws of the United States. Despite our efforts to protect our proprietary rights, unauthorized parties have in the
past attempted, and may in the future attempt, to copy aspects of our products or to obtain and use
information that we regard as proprietary. Third parties may also design around our proprietary rights, which
may render our protected products less valuable, if the design around is favorably received in the marketplace.
In addition, if any of our products or the technology underlying our products is covered by third-party patents
or other intellectual property rights, we could be subject to various legal actions. We cannot assure you that
our products do not infringe patents held by others or that they will not in the future. We have received in the
past communications from third parties relating to technologies used in our Roomba floor vacuuming robots
that have alleged infringement of patents or violation of other intellectual property rights. In response to these
communications, we have contacted these third parties to convey our good faith belief that we do not infringe
the patents in question or otherwise violate those parties' rights. Although there have been no additional
actions or communications with respect to these allegations, we cannot assure you that we will not receive
further correspondence from these parties, or not be subject to additional allegations of infringement from
others. Litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets, to
determine the validity and scope of the proprietary rights of others, or to defend against claims of infringement
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