Green Dot 2012 Annual Report Download - page 17

7
than we do. Many of these banks also have other assets that could give them an advantage, including broader ranges
of product offerings and/or retail branch networks. We believe that our consumer checking account products will be
differentiated by their innovative technological features, innovative distribution model, consumer-friendly pricing, and
branding.
We believe that the principal competitive factors for personal banking services include:
• brand recognition with consumers and distribution partners;
• marketing capabilities;
• product features;
• ability to develop and maintain strong relationship with distributors;
• compliance and regulatory capabilities; and
• pricing.
We believe that our GoBank product will compete favorably on each of these factors. However, investments in
new products such as GoBank are speculative. Accordingly, there can be no assurance that GoBank will be adopted
by consumers or otherwise achieve commercial success.
Intellectual Property
We rely on a combination of patent, trademark and copyright laws and trade secret protection in the United States,
as well as confidentiality procedures and contractual provisions, to protect the intellectual property rights related to
our products and services.
We own several trademarks, including Green Dot, MoneyPak, GoBank, and the Green Dot logo. These assets
are essential to our business. Through agreements with our network acceptance members, retail distributors and
customers, we authorize and monitor the use of our trademarks in connection with their activities with us.
Our patent portfolio currently consists of four patents and seven patent applications. The term of the patents we
hold is, on average, twenty years. We feel our patents and applications are essential to our business and help to
differentiate our products and services from those of our competitors.
The industry in which we compete is characterized by rapidly changing technology, a large number of patents,
and frequent claims and related litigation regarding patent and other intellectual property rights. There can be no
assurance that our patents and other proprietary rights will not be challenged, invalidated, or circumvented; that others
will not assert intellectual property rights to technologies that are relevant to us; or that our rights will give us a competitive
advantage. In addition, the laws of some foreign countries may not protect our proprietary rights to the same extent
as the laws of the United States. The risks associated with patents and intellectual property are more fully discussed
in “Item 1A. Risk Factors,” including the risk factors entitled “We must adequately protect our brand and the intellectual
property rights related to our products and services and avoid infringing on the proprietary rights of others,” and “We
must be able to operate and scale our technology effectively to manage any future growth.”
Regulation
Compliance with legal and regulatory requirements is a highly complex and integral part of our day-to-day
operations. Our products and services are generally subject to federal, state and local laws and regulations, including:
• anti-money laundering laws;
• money transfer and payment instrument licensing regulations;
• escheatment laws;
• privacy and information safeguard laws;
• banking regulations; and
• consumer protection laws.
These laws are often evolving and sometimes ambiguous or inconsistent, and the extent to which they apply to
us, our subsidiary bank or the banks that issue our cards, our retail distributors, our network acceptance members or
our third-party processors is at times unclear. Any failure to comply with applicable law — either by us or by the card
issuing banks, retail distributors, network acceptance members or third-party processors, over which we have limited
legal and practical control — could result in restrictions on our ability to provide our products and services, as well as