Autodesk 2012 Annual Report Download - page 78

profit margins and loss of market share, any of which could harm our business. See Item 1A, “Risk Factors,” for further
discussion of risks regarding competition.
We believe that our future results depend largely upon our abilities to better serve customers by offering new products,
whether by internal development or acquisition, and to continue to provide existing product offerings that compete favorably
with respect to ease of use, reliability, performance, range of useful features, continuing product enhancements, reputation,
price and training.
INTELLECTUAL PROPERTY AND LICENSES
We maintain an active program to legally protect our investment in technology through intellectual property rights. We
protect our intellectual property through a combination of patent, copyright, trademark and trade secret protections,
confidentiality procedures and contractual provisions. The nature and extent of legal protection associated with each such
intellectual property right depends on, among other things, the type of intellectual property right and the given jurisdiction in
which such right arises. We believe that our intellectual property rights are valuable and important to our business, including
each of our segments.
Nonetheless, our intellectual property rights may not be successfully asserted in the future or may be invalidated,
circumvented or challenged. In addition, the laws of various foreign countries where our products are distributed do not protect
our intellectual property rights to the same extent as U.S. laws. Enforcement of intellectual property rights against alleged
infringers can sometimes lead to costly litigation and counterclaims. Our inability to protect our proprietary information could
harm our business.
From time to time, we receive claims alleging infringement of a third party’s intellectual property rights, including
patents. Disputes involving our intellectual property rights or those of another party have in the past and may in the future lead
to, among other things, costly litigation or product shipment delays, which could harm our business.
We retain ownership of software we develop. All software is licensed to users and primarily provided in object code
pursuant to either shrink-wrap, embedded or on-line licenses, or signed license agreements. These agreements contain
restrictions on duplication, disclosure and transfer.
We believe that because of the limitations of laws protecting our intellectual property and the rapid, ongoing
technological changes in both the computer hardware and software industries, we must rely principally upon software
engineering and marketing skills to maintain and enhance our competitive market position.
While we have recovered some revenue resulting from the unauthorized use of our software products, we are unable to
measure the full extent to which piracy of our software products exists. We believe, however, that software piracy is and can be
expected to be a persistent problem that negatively impacts our revenue and financial results.
In addition, through various licensing arrangements, we receive certain rights to intellectual property of others. We expect
to maintain current licensing arrangements and to secure licensing arrangements in the future, as needed and to the extent
available on reasonable terms and conditions, to support continued development and sales of our products and services. Some
of these licensing arrangements require or may require royalty payments and other licensing fees. The amount of these
payments and fees may depend on various factors, including but not limited to: the structure of royalty payments, offsetting
considerations, if any, and the degree of use of the licensed technology.
See Item 1A, “Risk Factors,” for further discussion of risks related to protecting our intellectual property.
PRODUCTION AND SUPPLIERS
Production of our PSEB, AEC, MFG and certain M&E software products involves duplication of the software media and,
for certain products, the printing of user manuals. The purchase of media and the transfer of the software programs onto media
for distribution to customers are performed by us and by licensed subcontractors. Media for our products such as DVDs and
USB flash drives are available from multiple sources. We offer our maintenance customers an electronic software download
option for selected product updates. Customers who choose electronic fulfillment receive the latest version of the software from
our vendor’s secure servers. For certain products, user manuals are made available by request only as we work toward reducing
our cost of shipping and production as well as the use of natural resources. User manuals and packaging materials are produced
to our specifications by outside sources. Production is either performed in leased facilities operated by us or by independent
third-party contractors. To date, we have not experienced any material difficulties or delays in the production of our software
and documentation.
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