Invacare 2013 Annual Report Download - page 32

I-26
The Company’s operating results and financial condition could be adversely affected if the Company becomes involved in
litigation regarding its patents or other intellectual property rights.
Litigation involving patents and other intellectual property rights is common in the Company’s industry, and other companies
within the Company’s industry have used intellectual property litigation in an attempt to gain a competitive advantage. The
Company in the past has been, and in the future may become, a party to lawsuits involving patents or other intellectual property.
If the Company loses any of these proceedings, a court or a similar foreign governing body could invalidate or render unenforceable
the Company’s owned or licensed patents, require the Company to pay significant damages, seek licenses and/or pay ongoing
royalties to third parties, require the Company to redesign its products, or prevent the Company from manufacturing, using or
selling its products, any of which would have an adverse effect on the Company’s results of operations and financial condition.
The Company in the past has brought, and may in the future also bring, actions against third parties for infringement of the
Company’s intellectual property rights. The Company may not succeed in these actions. The defense and prosecution of intellectual
property suits, proceedings before the U.S. Patent and Trademark Office or its foreign equivalents and related legal and
administrative proceedings are both costly and time consuming. Protracted litigation to defend or prosecute the Company’s
intellectual property rights could seriously detract from the time the Company’s management would otherwise devote to running
its business. Intellectual property litigation relating to the Company’s products could cause its customers or potential customers
to defer or limit their purchase or use of the affected products until resolution of the litigation.
If the Company is unable to protect its intellectual property rights or resolve successfully claims of infringement brought
against it, the Company's product sales and business could be affected adversely.
The Company's business depends in part on its ability to establish, protect, safeguard and enforce its intellectual property
and contractual rights and to defend against any claims of infringement, both of which involve complex legal, factual and
marketplace uncertainties. The Company relies on a combination of patent, trade secret, copyright and trademark law and security
measures to protect its intellectual property, but effective intellectual property protection may not be available in all places that
the Company sells its products or services, particularly in certain foreign jurisdictions. In addition, the Company uses nondisclosure,
confidentiality agreements and invention assignment agreements with many of its employees, and nondisclosure and confidentiality
agreements with certain third parties, in an effort to help protect its proprietary technology and know-how. If these agreements
are breached or the Company's intellectual property is otherwise misappropriated, the Company may have to rely on litigation to
enforce its intellectual property rights. If any of these measures are unsuccessful in protecting the Company's intellectual property,
the Company's business may be affected adversely.
In addition, the Company may face claims of infringement that could interfere with its ability to use technology or other
intellectual property rights that are material to the Company's business operations. In the event that a claim of infringement against
the Company is successful, the Company may be required to pay royalties or license fees to continue to use technology or other
intellectual property rights that the Company was using, or the Company may be unable to obtain necessary licenses from third
parties at a reasonable cost or within a reasonable time. If the Company is unable to obtain licenses on reasonable terms, it may
be forced to cease selling or using the products that incorporate the challenged intellectual property, or to redesign or, in the case
of trademark claims, rename its products to avoid infringing the intellectual property rights of third parties, which may not be
possible, or if possible, may be time-consuming. Any litigation of this type, whether successful or unsuccessful, could result in
substantial costs to the Company and adversely affect the Company's business and financial condition.
The Company also holds patent and other intellectual property licenses from third parties for some of its products and on
technologies that are necessary in the design and manufacture of some of the Company's products. The loss of these licenses
could prevent the Company from, or could cause additional disruption or expense in, manufacturing, marketing and selling these
products, which could harm the Company's business.
The Company’s research and development and manufacturing processes are subject to federal, state, local and foreign
environmental requirements.
The Company’s research and development and manufacturing processes are subject to federal, state, local and foreign
environmental requirements, including requirements governing the discharge of pollutants into the air or water, the use, handling,
storage and disposal of hazardous substances and the responsibility to investigate and clean up contaminated sites. Under some
of these laws, the Company also could be held responsible for costs relating to any contamination at the Company’s past or present
facilities and at third-party waste disposal sites. These could include costs relating to contamination that did not result from any
violation of law and, in some circumstances, contamination that the Company did not cause. The Company may incur
significant expenses relating to the failure to comply with environmental laws. The enactment of stricter laws or regulations, the
stricter interpretation of existing laws and regulations or the requirement to undertake the investigation or remediation of currently