Garmin 2008 Annual Report Download - page 39

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pending. In addition, Garmin often relies on licenses of intellectual property for use in its business. For example,
Garmin obtains licenses for digital cartography technology for use in our products from various sources. As of
January 27, 2009, we held 96 U.S. trademark registrations and 191 foreign trademark registrations. As of January
27, 2009, we had 11 U.S. trademark applications and 46 foreign trademark applications pending.
We believe that our continued success depends on the intellectual skills of our employees and their ability to
continue to innovate. Garmin will continue to file and prosecute patent applications when appropriate to attempt to
protect Garmin’s rights in its proprietary technologies. Garmin was selected as a constituent of the Ocean Tomo®
300 Patent Index and The Ocean Tomo® 300 Patent Growth Index, which are indices that recognize companies with
high intellectual property value.
There is no assurance that our current patents, or patents which we may later acquire, may successfully
withstand any challenge, in whole or in part. It is also possible that any patent issued to us may not provide us with
any competitive advantages, or that the patents of others will preclude us from manufacturing and marketing certain
products. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of
our products or to obtain and use information that we regard as proprietary. Litigation may be necessary in the
future to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of
the proprietary rights of others or to defend against claims of infringement or invalidity.
Regulations
The telecommunications industry is highly regulated, and the regulatory environment in which Garmin
operates is subject to change. In accordance with Federal Communications Commission (“FCC”) rules and
regulations, wireless transceiver and cellular handset products are required to be certified by the FCC and
comparable authorities in foreign countries where they are sold. Garmin’s products sold in Europe are required to
comply with relevant directives of the European Commission. A delay in receiving required certifications for new
products, or enhancements to Garmin’s products, or losing certification for Garmin’s existing products could
adversely affect our business. In addition, aviation products that are intended for installation in “type certificated
aircraft” are required to be certified by the FAA, its European counterpart, the European Aviation Safety Agency,
and other comparable organizations before they can be used in an aircraft.
Because Garmin Corporation, one of the Company’s principal subsidiaries, is located in Taiwan, foreign
exchange control laws and regulations of Taiwan with respect to remittances into and out of Taiwan may have an
impact on Garmin’s operations. The Taiwan Foreign Exchange Control Statute, and regulations thereunder, provide
that all foreign exchange transactions must be executed by banks designated to handle such business by the Ministry
of Finance of Taiwan and by the Central Bank of the Republic of China (Taiwan), also referred to as the CBC.
Current regulations favor trade-related foreign exchange transactions. Consequently, foreign currency earned from
exports of merchandise and services may now be retained and used freely by exporters, while all foreign currency
needed for the import of merchandise and services may be purchased freely from the designated foreign exchange
banks. Aside from trade-related foreign exchange transactions, Taiwan companies and residents may, without
foreign exchange approval, remit outside and into Taiwan foreign currencies of up to $50 million and $5 million
respectively, or their equivalent, each calendar year. Currency conversions within the limits are processed by the
designated banks and do not have to be reviewed and approved by the CBC. The above limits apply to remittances
involving a conversion between New Taiwan Dollars and U.S. Dollars or other foreign currencies. The CBC
typically approves foreign exchange in excess of the limits if a party applies with the CBC for review and presents
legitimate business reasons justifying the currency conversion. A requirement is also imposed on all enterprises to
register all medium and long-term foreign debt with the CBC.
Environmental Matters
The European Union (“EU”) enacted the Restriction of the Use of Certain Hazardous Substances in
Electrical and Electronic Equipment Directive ("RoHS Directive") and the Waste Electrical and Electronic
Equipment Directive (“WEEE Directive”). The RoHS Directive requires EU member states to enact laws
prohibiting the use of certain substances, including lead, mercury, cadmium and hexavalent chromium, in certain
electronic products put on the market after July 1, 2006. The WEEE Directive requires EU member states to enact