Airbus 2015 Annual Report Download - page 51

AIRBUS GROUP REGISTRATION DOCUMENT 2015 l 19 l
Risk Factors
Registration Document 2015
3 Legal Risks
3. Legal Risks
Dependence on Joint Ventures and Minority Holdings
The Company generates a substantial proportion of its revenues
through various consortia, joint ventures and equity holdings.
These arrangements include primarily:
 the Eurofighter and AirTanker consortia; and
 three principal joint ventures: MBDA, ATR and Atlas Electronik.
The formation of partnerships and alliances with other market
players is an integral strategy of the Company, and the proportion
of sales generated from consortia, joint ventures and equity
holdings may rise in future years. This strategy may from time to
time lead to changes in the organisational structure, or realignment
in the control, of the Company’s existing joint ventures.
The Company exercises varying and evolving degrees of control
in the consortia, joint ventures and equity holdings in which
it participates. While the Company seeks to participate only
in ventures in which its interests are aligned with those of its
partners, the risk of disagreement or deadlock is inherent in a
jointly controlled entity, particularly in those entities that require
the unanimous consent of all members with regard to major
decisions and specify limited exit rights. The other parties in
these entities may also be competitors of the Company, and
thus may have interests that differ from those of the Company.
In addition, in those holdings in which the Company is a minority
partner or shareholder, the Company’s access to the entity’s
books and records, and as a consequence, the Company’s
knowledge of the entity’s operations and results, is generally
limited as compared to entities in which the Company is a
majority holder or is involved in the day-to-day management.
Product Liability and Warranty Claims
The Company designs, develops and produces a number of
high profile products of large individual value, particularly civil
and military aircraft and space equipment. The Company is
subject to the risk of product liability and warranty claims in
the event that any of its products fails to perform as designed.
While the Company believes that its insurance programmes
are adequate to protect it from such liabilities, no assurances
can be given that claims will not arise in the future or that such
insurance coverage will be adequate.
Intellectual property
The Company relies upon patent, copyright, trademark and trade
secret laws, and agreements with its employees, customers,
suppliers and other parties, to establish and maintain its
Intellectual property rights in technology and products used in
its operations. Despite these efforts to protect its Intellectual
property rights, any of the Company’s direct or indirect
Intellectual property rights could be challenged, invalidated
or circumvented. Further, the laws of certain countries do not
protect the Company’s proprietary rights to the same extent as
the laws in Europe and the US. Therefore, in certain jurisdictions
the Company may be unable to protect its proprietary technology
adequately against unauthorised third-party copying or use,
which could adversely affect its competitive position.
In addition, although the Company believes that it lawfully
complies with the Intellectual property rights granted to others, it
has been accused of infringement on occasion and could have
additional claims asserted against it in the future. These claims
could harm its reputation, cost it money and prevent it from
offering certain products or services. Any claims or litigation in
this area, whether the Company ultimately wins or loses, could
be time-consuming and costly, injure the Company’s reputation
or require it to enter into licensing arrangements. The Company
might not be able to enter into these licensing arrangements
on acceptable terms. If a claim of infringement were successful
against it, an injunction might be ordered against the Company,
causing further damages.
Financial Statements 2015
11 22 33 44 55
QRegistration Document 2015
Annual Report 2015 Financial Statements 2015
Q