Adaptec 2003 Annual Report Download - page 46

From time to time, we become defendants in legal proceedings about which we are unable to assess our exposure and which could
become significant liabilities upon judgment.
We become defendants in legal proceedings from time to time. Companies in our industry have been subject to claims related to
patent infringement and product liability, as well as contract and personal claims. We may not be able to accurately assess the risk
related to these suits, and we may be unable to accurately assess our level of exposure. These proceedings may result in material
charges to our operating results in the future if our exposure is material and if our ability to assess our exposure becomes clearer.
If we cannot protect our proprietary technology, we may not be able to prevent competitors from copying our technology and
selling similar products, which would harm our revenues.
To compete effectively, we must protect our intellectual property. We rely on a combination of patents, trademarks, copyrights, trade
secret laws, confidentiality procedures and licensing arrangements to protect our intellectual property rights. We hold several patents
and have a number of pending patent applications.
We might not succeed in attaining patents from any of our pending applications. Even if we are awarded patents, they may not
provide any meaningful protection or commercial advantage to us, as they may not be of sufficient scope or strength, or may not be
issued in all countries where our products can be sold. In addition, our competitors may be able to design around our patents.
We develop, manufacture and sell our products in Asian and other countries that may not protect our products or intellectual property
rights to the same extent as the laws of the United States. This makes piracy of our technology and products more likely. Steps we
take to protect our proprietary information may not be adequate to prevent theft of our technology. We may not be able to prevent our
competitors from independently developing technologies that are similar to or better than ours.
Our products employ technology that may infringe on the proprietary rights of third parties, which may expose us to litigation and
prevent us from selling our products.
Vigorous protection and pursuit of intellectual property rights or positions characterize the semiconductor industry. This often results
in expensive and lengthy litigation. Although we have neither received any material claims relating to the infringement of patents or
other intellectual property rights owned by third parties nor are we aware of any such potential claims, we, and our customers or
suppliers, may be accused of infringing on patents or other intellectual property rights owned by third parties in the future. This has
happened in the past. An adverse result in any litigation could force us to pay substantial damages, stop manufacturing, using and
selling the infringing products, spend significant resources to develop non−infringing technology, discontinue using certain processes
or obtain licenses to the infringing technology. In addition, we may not be able to develop non−infringing technology, or
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