Juno 2014 Annual Report Download - page 15

Table of Contents
Legal actions or investigations could subject us to substantial liability, require us to change our business practices, and adversely affect our business,
financial condition, results of operations, and cash flows.
We are currently, and have been in the past, party to various legal actions and investigations. These actions may include, without limitation, claims by
private parties in connection with consumer protection and other laws, claims that we infringe third-party patents, trademarks, copyrights, or other
intellectual property or proprietary rights, securities laws claims, claims involving marketing practices or unfair competition, claims in connection with
employment practices, breach of contract claims, and other business-related claims. The nature of our business could subject us to additional claims for
similar matters, as well as a wide variety of other claims, including, without limitation, claims for defamation, right of publicity, negligence, and privacy and
security matters. The failure to successfully defend against these and other types of claims, including claims relating to our business practices, could result in
us incurring significant liabilities related to judgments or settlements or require us to change our business practices. Infringement claims may also result in
our being required to obtain licenses from third parties, which licenses may not be available on acceptable terms, if at all. Both the cost of defending claims,
as well as the effect of settlements and judgments, could cause our results of operations to fluctuate significantly from period to period and could materially
and adversely affect our business, financial condition, results of operations, and cash flows. In addition, we also file actions against third parties from time to
time for various reasons, including, without limitation, to protect our intellectual property rights, to enforce our contractual rights, or to make other business-
related claims. The legal fees, costs, and expenses associated with these actions may be significant, and if we were to lose these actions, we may be required to
pay the other party's legal fees, costs and expenses, which also may be significant and could materially and adversely affect our business, financial condition,
results of operations, and cash flows.
Various governmental agencies have asserted claims, instituted legal actions, inquiries, or investigations, or imposed obligations relating to our business
practices, such as our marketing, billing, customer retention, renewal, cancelation, refund, or disclosure practices, and they may continue to do so in the
future. We have received civil investigative demands and subpoenas, as applicable, from the Federal Trade Commission, or the FTC, and the Attorneys
General of various states, primarily regarding their respective investigations into certain former post-transaction sales practices and certain of our marketing,
billing, renewal, and privacy practices and disclosures. We have been cooperating with these investigations. However, the outcome of these or any other
governmental investigations or their potential implications for our business are uncertain. We may not prevail in existing or future claims and any judgment
against us or settlement or resolution of such claims may involve the payment of significant sums, including damages, fines, penalties, or assessments, or
changes to our business practices. For example, in 2010, Classmates, Inc. (then known as Classmates Online, Inc.) paid $960,000 to resolve an investigation
of the Attorney General for the State of New York related to its former post-transaction sales practices; and in July 2013, Classmates, Inc. (formerly known as
Memory Lane, Inc.) paid $300,000 to resolve an investigation of the Attorney General for the District of Columbia related to its former post-transaction sales
practices. Defending against lawsuits, inquiries, and investigations also involves significant expense and diversion of management's attention and resources
from other matters. We cannot assure you that additional governmental investigations or other legal actions will not be instituted in connection with our
former post-transaction sales practices or other current or former business practices. Enforcement actions or changes in enforcement policies and procedures
could result in changes to our business practices, as well as significant damages, fines, penalties, or assessments, which could decrease our revenues or
increase the costs of operating our business. To the extent that our services or business practices change as a result of claims or actions by governmental
agencies or private parties (including in connection with settlement agreements related to such claims), or we are required to pay significant sums, including
damages, fines, penalties, or assessments, our business, financial condition, results of operations, and cash flows could be materially and adversely affected.
For more information, see Note 12, "Commitments and Contingencies—Legal
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