Earthlink 2008 Annual Report Download - page 23

Table of Contents
We may not be able to protect our intellectual property.
We regard our EarthLink, PeoplePC and New Edge Networks trademarks as valuable assets to our business. In particular, we believe the
strength of the EarthLink brand among existing and potential customers is important to the success of our business. Additionally, our EarthLink,
PeoplePC and New Edge Networks service marks, proprietary technologies, domain names and similar intellectual property are also important to
the success of our business. We principally rely upon trademark law as well as contractual restrictions to establish and protect our technology
and proprietary rights and information. We require employees and consultants and, when possible, suppliers and distributors to sign
confidentiality agreements, and we generally control access to, and distribution of, our technologies, documentation and other proprietary
information. The efforts we have taken to protect our proprietary rights may not be sufficient or effective. Third parties may infringe or
misappropriate our trademarks and similar proprietary rights. If we are unable to protect our proprietary rights from unauthorized use, our brand
image may be harmed and our business may suffer. In addition, protecting our intellectual property and other proprietary rights is expensive and
time consuming. Any increase in the unauthorized use of our intellectual property could make it more expensive to do business and consequently
harm our operating results.
We may be accused of infringing upon the intellectual property rights of third parties, which is costly to defend and could limit our ability to
use certain technologies in the future.
From time to time, third parties have alleged that we infringe on their intellectual property rights. We have been subject to, and expect to
continue to be subject to, claims and legal proceedings regarding alleged infringement by us of the patents, trademarks and other intellectual
property rights of third parties. None of these claims has had an adverse effect on our ability to market and sell and support our services. Such
claims, whether or not meritorious, are time-
consuming and costly to resolve, and could require expensive changes in our methods of doing
business, could require us to enter into costly royalty or licensing agreements, or could require us to cease conducting certain operations. Any of
these events could result in increases in operating expenses or could limit or reduce the number of our service offerings.
If we are unable to successfully defend against legal actions, we could face substantial liabilities.
We are currently a party to various legal actions, including consumer class action and patent litigation. Defending against these lawsuits
may involve significant expense and diversion of management's attention and resources from other matters. Due to the inherent uncertainties of
litigation, we may not prevail in these actions. In addition, our ongoing operations may subject us to litigation risks and costs in the future. Both
the costs of defending lawsuits and any settlements or judgments against us could materially and adversely affect our results of operations.
Our business depends on effective business support systems, processes and personnel.
Our business relies on our complex data, billing and other operational and financial reporting and control systems. To effectively manage
our technical support infrastructure, we will need to continue to maintain our data, billing, and other operational and financial systems,
procedures and controls, which can be costly. If we are unable to maintain our systems in an effective manner, our business may be adversely
affected.
We may be unable to hire and retain sufficient qualified personnel, and the loss of any of our key executive officers could adversely affect us.
Our business depends on our ability to effectively attract, hire and retain highly skilled and qualified managerial, professional and technical
personnel. We have implemented various reductions in workforce over the past few years, which may affect our ability to hire and retain key
personnel. Effective succession planning is also important to our long-term success. Failure to ensure effective transfer of knowledge and
19