Intel 2012 Annual Report Download - page 25
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We may be unable to enforce or protect our IP rights, which may harm our ability to compete and may harm our
business.
Our ability to enforce our patents, copyrights, software licenses, and other IP rights is subject to general litigation risks, as
well as uncertainty as to the enforceability of our IP rights in various countries. When we seek to enforce our rights, we
are often subject to claims that the IP rights are invalid, not enforceable, or licensed to the opposing party. Our assertion
of IP rights often results in the other party seeking to assert claims against us, which could harm our business.
Governments may adopt regulations—and governments or courts may render decisions—requiring compulsory licensing
of IP rights, or governments may require products to meet standards that serve to favor local companies. Our inability to
enforce our IP rights under these circumstances may harm our competitive position and business.
We may be subject to IP theft or misuse, which could result in claims against us and harm our business and
results of operations.
The theft or unauthorized use or publication of our trade secrets and other confidential business information could harm
our competitive position and reduce acceptance of our products; the value of our investment in R&D, product
development, and marketing could be reduced; and third parties might make claims against us related to losses of
confidential or proprietary information or end-user data, or system reliability. These incidents and claims could severely
disrupt our business, and we could suffer losses, including the cost of product recalls and returns and reputational harm.
Our licenses with other companies and participation in industry initiatives may allow competitors to use our
patent rights.
Companies in the computing industry often bilaterally license patents between each other to settle disputes or as part of
business agreements between them. Our competitors may have licenses to our patents, and under current case law,
some of the licenses may permit these competitors to pass our patent rights on to others under some circumstances. Our
participation in industry standards organizations or with other industry initiatives may require us to license our patents to
companies that adopt industry-standard specifications. Depending on the rules of the organization, we might have to grant
these licenses to our patents for little or no cost, and as a result, we may be unable to enforce certain patents against
others, our costs of enforcing our licenses or protecting our patents may increase, and the value of our IP rights may be
impaired.
Litigation or regulatory proceedings could harm our business.
We may face legal claims or regulatory matters involving stockholder, consumer, competition, and other issues on a
global basis. As described in “Note 27: Contingencies” in Part II, Item 8 of this Form 10-K, we are engaged in a number of
litigation and regulatory matters. Litigation and regulatory proceedings are inherently uncertain, and adverse rulings could
occur, including monetary damages, or an injunction stopping us from manufacturing or selling products, engaging in
business practices, or requiring other remedies, such as compulsory licensing of patents.
We face risks related to sales through distributors and other third parties.
We sell a portion of our products through third parties such as distributors, value-added resellers, OEMs, Internet service
providers, and channel partners (collectively referred to as distributors). Using third parties for distribution exposes us to
many risks, including competitive pressure, concentration, credit risk, and compliance risks. Distributors may sell products
that compete with our products, and we may need to provide financial and other incentives to focus distributors on the
sale of our products. We may rely on one or more key distributors for a product, and the loss of these distributors could
reduce our revenue. Distributors may face financial difficulties, including bankruptcy, which could harm our collection of
accounts receivable and financial results. Violations of FCPA or similar laws by distributors or other third-party
intermediaries could have a material impact on our business. Failing to manage risks related to our use of distributors may
reduce sales, increase expenses, and weaken our competitive position.
We face risks related to sales to government entities.
We derive a portion of our revenue from sales to government entities and their respective agencies. Government demand
and payment for our products may be affected by public sector budgetary cycles and funding authorizations. Government
contracts are subject to oversight, including special rules on accounting, expenses, reviews, and security. Failing to
comply with these rules could result in civil and criminal penalties and sanctions, including termination of contracts, fines
and suspensions, or debarment from future government business.
We invest in companies for strategic reasons and may not realize a return on our investments.
We make investments in companies around the world to further our strategic objectives and support key business
initiatives. These investments include equity or debt instruments of public or private companies, and many of these
instruments are non-marketable at the time of our initial investment. Companies range from early-stage companies that
are still defining their strategic direction to more mature companies with established revenue streams and business
models. The companies in which we invest may fail because they are unable to secure additional funding, obtain
favorable terms for future financings, or participate in liquidity events such as public offerings, mergers, and private sales.