Expedia 2006 Annual Report Download - page 24

We cannot be sure that our intellectual property is protected from copying or use by others,
including potential competitors.
Our websites rely on content and technology intellectual property, much of which we regard as
proprietary. We protect our proprietary technology by relying on trademarks, copyrights, trade secret laws and
confidentiality agreements. In connection with our license agreements with third-parties, we seek to control
access to and distribution of our technology, documentation and other proprietary information. Even with all
of these precautions, it is possible for someone else to copy or otherwise obtain and use our proprietary
technology without our authorization or to develop similar technology independently. Effective trademark,
copyright and trade secret protection may not be available in every country in which our services are made
available through the internet, and policing unauthorized use of our proprietary information is difficult and
expensive. We cannot be sure that the steps we have taken will prevent misappropriation of our proprietary
information. This misappropriation could have a material adverse effect on our business. In the future, we may
need to go to court to enforce our intellectual property rights, to protect our trade secrets or to determine the
validity and scope of the proprietary rights of others. This litigation might result in substantial costs and
diversion of resources and management attention.
We currently license from third-parties some of the technologies incorporated into our websites. As we
continue to introduce new services that incorporate new technologies, we may be required to license additional
technology. We cannot be sure that such technology licenses will be available on commercially reasonable
terms, if at all.
Part I. Item 1B. Unresolved Staff Comments
None.
Part I. Item 2. Properties
We lease approximately 1.1 million square feet of office space worldwide, pursuant to leases with
expiration dates through May 2014.
We lease approximately 350,000 square feet for our headquarters in Bellevue, Washington, pursuant to
leases with expiration dates primarily through February 2009. In addition, we lease approximately
380,000 square feet of office space for our domestic operations in various cities and locations in California,
Florida, Hawaii, Idaho, Illinois, Massachusetts, Michigan, Missouri, Nevada, New York, Texas and Washing-
ton, pursuant to leases with expiration dates through August 2011.
We also lease approximately 320,000 square feet of office space for our international operations in
various cities and locations in Australia, Belgium, Canada, China, France, Germany, Italy, Japan, Mexico, the
Netherlands, Spain, the United Arab Emirates and the United Kingdom, pursuant to leases with expiration
dates through May 2014.
Part I. Item 3. Legal Proceedings
In the ordinary course of business, Expedia and its subsidiaries are parties to legal proceedings and claims
involving property, personal injury, contract, alleged infringement of third-party intellectual property rights and
other claims. The amounts that may be recovered in such matters may be subject to insurance coverage.
Rules of the SEC require the description of material pending legal proceedings, other than ordinary,
routine litigation incident to the registrant’s business, and advise that proceedings ordinarily need not be
described if they primarily involve damages claims for amounts (exclusive of interest and costs) not
individually exceeding 10% of the current assets of the registrant and its subsidiaries on a consolidated basis.
In the judgment of management, none of the pending litigation matters which the Company and its subsidiaries
are defending, including those described below, involves or is likely to involve amounts of that magnitude.
The litigation matters described below are as of December 31, 2006, and involve issues or claims that may be
of particular interest to our stockholders, regardless of whether any of these matters may be material to our
financial position or results of operations based upon the standard set forth in the SEC’s rules.
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