Carbonite 2011 Annual Report Download - page 28

Table of Contents
Confidentiality agreements with employees and others may not adequately prevent disclosure of our trade secrets and proprietary information.
Failure to protect our proprietary information could make it easier for third parties to compete with our solutions and harm our business.
We have devoted substantial resources to the development of our proprietary technologies and related processes. In order to protect our
proprietary technologies and processes, we rely in part on trade secret laws and confidentiality agreements with our employees, licensees, independent
contractors, and other advisors. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate
remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets, in which
case we would not be able to assert trade secret rights, or develop similar technologies and processes. Further, laws in certain jurisdictions may afford
little or no trade secret protection, and any changes in, or unexpected interpretations of, the intellectual property laws in any country in which we operate
may compromise our ability to enforce our intellectual property rights. Costly and time-consuming litigation could be necessary to enforce and
determine the scope of our proprietary rights, and failure or inability to obtain or maintain trade secret protection or otherwise protect our proprietary
rights could adversely affect our business.
Our use of “open source” software could negatively affect our ability to sell our solutions and subject us to possible litigation.
A portion of the technologies licensed by us to our customers incorporates so-called “open source” software, and we may incorporate open source
software in the future. Such open source software is generally licensed by its authors or other third parties under open source licenses. These licenses
may subject us to certain unfavorable conditions, including requirements that we offer our solutions that incorporate the open source software for no
cost, that we make publicly available source code for modifications or derivative works we create based upon, incorporating, or using the open source
software, and/or that we license such modifications or derivative works under the terms of the particular open source license. Additionally, if a third
party software provider has incorporated open source software into software that we license from such provider, we could be required to disclose any of
our source code that incorporates or is a modification of such licensed software. If an author or other third party that distributes open source software
that we use or license were to allege that we had not complied with the conditions of the applicable license, we could be required to incur significant
legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our solutions that contained the
open source software, and required to comply with the foregoing conditions. Any of the foregoing could disrupt the distribution and sale of our solutions
and harm our business.
We rely on third party software, including server software and licenses from third parties to use patented intellectual property, that is required to
develop and provide our solutions.
We rely on software licensed from third parties to develop and offer our solutions, including server software from Microsoft and other patented
third-party technologies. In addition, we may need to obtain future licenses from third parties to use intellectual property associated with the
development of our solutions, which might not be available to us on acceptable terms, or at all. Any loss of the right to use any software required for the
development and maintenance of our solutions could result in delays in the provision of our solutions until equivalent technology is either developed by
us, or, if available from others, is identified, obtained, and integrated, which could harm our business. Any errors or defects in third party software could
result in errors or a failure of our solutions, which could harm our business.
If we are unable to protect our domain names, our reputation, brand, customer base, and revenue, as well as our business and operating results,
could be adversely affected.
We have registered domain names for websites, or URLs, that we use in our business, such as www.carbonite.com. If we are unable to maintain
our rights in these domain names, our competitors or other third parties could capitalize on our brand recognition by using these domain names for their
own benefit. In
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