Enom 2013 Annual Report Download - page 20

If we are unable to successfully implement our new commerce initiatives, or if the revenue generated from these initiatives is less than the
costs of such initiatives, our business, financial condition and results of operations could be adversely affected.
As a creator and a distributor of Internet content, we face potential liability and expenses for legal claims based on the nature and content of
the materials that we create or distribute, or that are accessible via our owned and operated websites and our network of customer websites.
If we are required to pay damages or expenses in connection with these legal claims, our business, financial condition and results of
operations may be harmed.
We rely on freelance creative professionals to create original content to be published on our owned and operated websites and our
customer websites. As a creator and distributor of original content and third-party provided content, we face potential liability in the United
States and abroad based on a variety of theories, including copyright or trademark infringement, defamation, negligence, unlawful practice of a
licensed profession and other legal theories based on the nature, creation or distribution of this information, and under various laws, including
the Lanham Act and the Copyright Act. We may also be exposed to similar liability in connection with content that we do not create but that is
posted to our owned and operated websites and to our network of customer websites by users and other third parties through forums, comments,
personas and other social media features. In addition, it is also possible that visitors to our owned and operated websites or our network of
customer websites could bring claims against us for losses incurred in reliance upon information provided on such websites. These claims,
regardless of their merit, could divert management time and attention away from our business and result in significant costs to investigate and
defend. If we become subject to these or similar types of claims and are not successful in our defense, we may be forced to pay substantial
damages. If the content we distribute through our owned and operated websites or on our network of customer websites violates the intellectual
property rights of others or gives rise to other legal claims against us, we could be subject to substantial liability, which could have a negative
impact on our business, financial condition and results of operations.
We may face liability in connection with our and our customers’ undeveloped websites if the domain names violate another party’s
trademark or similar rights or are the name of a living or deceased person.
A number of our owned and operated websites and our customer websites are undeveloped or minimally developed properties that
primarily contain advertising links. As part of our registration process for these domain names, we perform searches, analysis and screenings to
determine if the domain names we own, in combination with the advertisements displayed on such sites, violate the trademark or other rights
owned by third parties. Despite these efforts, we may inadvertently register the domain names of properties that are identical or similar to
another party’s trademark or the name of a living or deceased person. Moreover, our efforts are inherently limited due to the fact that the
advertisements displayed on our undeveloped websites are delivered by third parties and the advertisements may vary over time or based on the
location of the viewer. Our customers who utilize our monetization tools for their undeveloped or minimally developed websites must deal with
similar issues. We may face primary or secondary liability in the United States under the Anticybersquatting Consumer Protection Act
(“ACPA”) or under general theories of trademark infringement or dilution, unfair competition or under rights of publicity with respect to the
domain names used for our and our customers’ undeveloped and minimally developed websites. If we fail to comply with these laws and
regulations, we could be exposed to claims for damages, financial penalties and reputational harm, which could negatively impact our business,
financial condition and results of operations.
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maintaining significant strategic relationships with talent and vendors, including our print-on-demand suppliers, and ensuring the
quality of their products and the timeliness of the production cycle;
1
competitive pricing pressures, including potential discounts offered to attract customers and reduced or free shipping for our print-on-
demand products;
1
disruptions in the supply
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chain, production and fulfillment operations and shipping associated with our print
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on
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demand products;
1
maintaining the artist driven community on Society6 so that the artists continue to contribute and maintain their original artwork and
designs on the e
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commerce marketplace;
1
the overall growth rate of the e
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commerce and paid content industries;
1
our ability to cost-effectively develop, introduce and market new products and services on a timely basis to address changing
consumption trends, consumer preferences and new technologies;
1
overall changes in consumer spending on discretionary purchases; and
1
legal claims, including copyright and trademark infringement claims, associated with content that is included in our products and
services, as well as product liability claims, both of which may expose us to greater litigation cost in the future as compared to
historical levels.