Adobe 2014 Annual Report Download - page 23

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• incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our operating
results;
• potential additional exposure to fluctuations in currency exchange rates;
• potential additional costs of bringing acquired companies into compliance with laws and regulations applicable to us
as a multi-national corporation;
• potential impairment of our relationships with employees, customers, partners, distributors or third-party providers of
our technologies, products or services;
• potential failure of the due diligence processes to identify significant problems, liabilities or other challenges of an
acquired company or technology, including but not limited to, issues with the acquired company’s intellectual property,
product quality or product architecture, data back-up and security (including security from cyber-attacks), privacy
practices, revenue recognition or other accounting practices, employee, customer or partner issues or legal and financial
contingencies;
• exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an
acquisition, including but not limited to claims from terminated employees, customers, former stockholders or other
third parties;
• incurring significant exit charges if products or services acquired in business combinations are unsuccessful;
• potential inability to assert that internal controls over financial reporting are effective;
• potential inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay
or prevent such acquisitions;
• potential delay in customer and distributor purchasing decisions due to uncertainty about the direction of our product
and service offerings; and
• potential incompatibility of business cultures.
Mergers and acquisitions of high technology companies are inherently risky. If we do not complete an announced acquisition
transaction or integrate an acquired business successfully and in a timely manner, we may not realize the benefits of the acquisition
to the extent anticipated, and in certain circumstances an acquisition could harm our financial position.
We may incur substantial costs enforcing or acquiring intellectual property rights and defending against third-party claims as
a result of litigation or other proceedings.
In connection with the enforcement of our own intellectual property rights, the acquisition of third-party intellectual property
rights, or disputes relating to the validity or alleged infringement of third-party intellectual property rights, including patent rights,
we have been, are currently and may in the future be subject to claims, negotiations or complex, protracted litigation. Intellectual
property disputes and litigation are typically costly and can be disruptive to our business operations by diverting the attention and
energies of management and key technical personnel. Although we have successfully defended or resolved many past lawsuits
and other disputes, we may not prevail in the future. Third-party intellectual property disputes, including those initiated by patent
assertion entities, could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable
terms, prevent us from licensing certain of our products or offering certain of our services, subject us to injunctions restricting our
sale of products or services, cause severe disruptions to our operations or the markets in which we compete, or require us to satisfy
indemnification commitments with our customers, including contractual provisions under various license arrangements and service
agreements. In addition, we may incur significant costs in acquiring the necessary third-party intellectual property rights for use
in our products, in some cases to fulfill contractual obligations with our customers. Any of these occurrences could significantly
harm our business.
We may not be able to protect our intellectual property rights, including our source code, from third-party infringers or
unauthorized copying, use or disclosure.
Although we vigorously defend our intellectual property rights and attempt to combat unlicensed copying, access and use
of software and intellectual property through a variety of techniques, preventing unauthorized use or infringement of our rights is
inherently difficult. We actively combat software piracy as we enforce our intellectual property rights, but we nonetheless lose
significant revenue due to illegal use of our software. If piracy activities continue at historical levels or increase, they may further
harm our business.