Incredimail 2010 Annual Report Download - page 30

As of December 31, 2010 we had 18 employees in our sales and marketing department.
Intellectual Property
We rely on a combination of patent, copyright, trademark and trade secret laws and confidentiality and invention assignment
agreements to protect our intellectual property rights. However, we do not currently believe that they provide a significant competitive
advantage.
Most of the components of our software products were developed solely by us. We have licensed certain components of our software,
such as a speller function, from third parties. Except for our agreement with Commtouch Ltd. (described below), all of these licenses entailed a
one-
time fee or are freeware. We believe that these components are not material to the overall performance of our software and may be replaced
without significant difficulty.
In 2001, we submitted patent applications in the United States, Europe and Israel for the following two inventions:
In July 2006, a patent was awarded in the US for the first invention; the second US patent application was abandoned in 2009.
In 2007 an international application was filed for the invention "interactive message editing system and method". This application was
filed in the National Phase in the USA, Europe and China.
We enter into licensing arrangements with third parties for the use of graphic, sound and multimedia content integrated into our
products.
We have registered IncrediMail and PhotoJoy as trademarks in the United States, the European Community and China. All other
trademarks, trade names and service marks appearing in this annual report are the property of their respective owners.
All professional employees and technical consultants are required to execute confidentiality covenants in connection with their
employment and consulting relationships with us. We also require them to agree to disclose and assign to us all inventions conceived in
connection with their services to us. However, there can be no assurance that these arrangements will be enforceable or that they will provide us
with adequate protection.
JunkFilter Plus was developed using an anti-
spam software development kit developed by Commtouch Ltd. Under our agreement with
Commtouch from 2004, Commtouch granted us a nonexclusive right and license to copy the software development kit and related software and
documentation for purposes of further development or modification in connection with the design, development and sale of products that
integrate the spam identification and classification services of Commtouch’
s Detection Center, and to sell products incorporating such software
and documentation. Under the agreement, we pay Commtouch an annual fee for each customer who purchases JunkFilter Plus
based on the
number of purchasers. The agreement was last extended for another year ending July 2011. Commtouch will continue to provide customers with
accessibility to its software and our integrated products following termination of the agreement, and the licenses granted to our customers will
also survive such termination.
Competition
Our industry is subject to intense competition. Our products compete in the specialized market for email software products and services
that aim to offer a simple, safe and useful application, providing a personalized and entertaining email experience for consumers. IncrediMail
was among the first companies to offer to the consumer email market a solution that combines an email product with an online gallery of
creative content. Providing this kind of solution and compiling content is a lengthy process and based on a prolonged relationship with our users,
and we have been doing it since 1999. We believe we have established ourselves with our unique demographic segment, as a provider of
solutions answering to these needs, and we believe that we have as such an advantage over many of our competitors.
•
system and method for visual feedback of command execution in electronic mail systems; and
• system and method for intelligent transmission of digital content embedded in electronic mail messages.
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