AMD 2007 Annual Report Download - page 42

Table of Contents
granted thereunder may not provide a competitive advantage to us. Furthermore, patent applications that we file may not result in issuance of a patent or, if a
patent is issued, the patent may not be issued in a form that is advantageous to us. Despite our efforts to protect our intellectual property rights, others may
independently develop similar products, duplicate our products or design around our patents and other rights. In addition, it is difficult to monitor compliance
with, and enforce, our intellectual property on a worldwide basis in a cost-effective manner. In jurisdictions where foreign laws provide less intellectual property
protection than afforded in the United States and abroad, our technology or other intellectual property may be compromised, and we would be materially
adversely affected.
We are party to litigation, including intellectual property litigation, and may become a party to other claims or litigation that could cause us to incur
substantial costs or pay substantial damages or prohibit us from selling our products.
From time to time we are a defendant or plaintiff in various legal actions. For example, our indirect wholly-owned subsidiary, ATI, is party to a consumer
class action, among other litigation matters. Additionally, in November 2006 we received a subpoena for documents and information in connection with the U.S.
Department of Justice’s criminal investigation into potential antitrust violations related to graphics processing units and cards. In addition, AMD and our
subsidiaries, ATI, AMD US Finance, Inc. and 1252986 Alberta ULC are defendants in a consolidated action in which the plaintiffs are seeking to certify a class
action to obtain injunctive relief and damages for alleged violations of federal antitrust law, and for alleged violations of certain state antitrust and consumer
protection statutes, related to graphics processing units and cards. We also sell products to consumers, which could increase our exposure to consumer actions
such as product liability claims. Litigation can involve complex factual and legal questions and its outcome is uncertain. Any claim that is successfully asserted
against us may cause us to pay substantial damages.
With respect to intellectual property litigation, from time to time, we have been notified, or third parties may bring actions against us, based on allegations
that we are infringing the intellectual property rights of others. If any such claims are asserted against us, we may seek to obtain a license under the third party’s
intellectual property rights. We cannot assure you that we will be able to obtain all of the necessary licenses on satisfactory terms, if at all. In the event that we
cannot obtain a license, these parties may file lawsuits against us seeking damages (potentially up to and including treble damages) or an injunction against the
sale of our products that incorporate allegedly infringed intellectual property or against the operation of our business as presently conducted, which could result
in our having to stop the sale of some of our products or to increase the costs of selling some of our products or could damage our reputation. The award of
damages, including material royalty payments, or the entry of an injunction against the manufacture and sale of some or all of our products, would have a
material adverse effect on us. We could decide, in the alternative, to redesign our products or to resort to litigation to challenge such claims. Such challenges
could be extremely expensive and time-consuming and could have a material adverse effect on us. We cannot assure you that litigation related to our intellectual
property rights or the intellectual property rights of others can always be avoided or successfully concluded.
Even if we were to prevail, any litigation could be costly and time-consuming and would divert the attention of our management and key personnel from
our business operations, which could have a material adverse effect on us.
We are subject to a variety of environmental laws that could result in liabilities.
Our operations and properties are subject to various United States and foreign environmental laws and regulations, including those relating to materials
used in our products and manufacturing processes, discharge of pollutants into the environment, the treatment, transport, storage and disposal of solid and
hazardous wastes, and remediation of contamination. These laws and regulations require us to obtain permits for our operations, including the discharge of air
pollutants and wastewater. Although our management systems are designed to maintain compliance, we cannot assure you that we have been or will be at all
times in complete compliance with
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Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008