Logitech 2007 Annual Report Download - page 82

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jurisdictions. Logitech enforces its trademark and trade name rights in the U.S. and abroad. In addition, the
software for Logitech’s products and services is entitled to copyright protection, and we generally require our
customers to obtain a software license before providing them with that software. We also protect details about
our products and services as trade secrets through employee training, license and non-disclosure agreements and
technical measures.
Governmental Regulation
The European Union (“EU”) has adopted the Directive on the Restriction of Use of Certain Hazardous
Substances in Electrical and Electronics Equipment (“RoHS”). This directive restricts the placement into the EU
market of electrical and electronic equipment containing certain hazardous materials including lead, mercury,
cadmium, chromium, and halogenated flame-retardants. RoHS became effective in July 2006 with a limited
number of exceptions. Most Logitech products are covered by the directive and have been modified, if necessary,
to be RoHS compliant. Logitech has an active program to ensure compliance with the RoHS directive and
continues to source and introduce the use of RoHS compliant components and manufacturing methods in order to
comply with the requirements of the directive.
Further, all Logitech products are subject to the EU’s Waste Electrical and Electronic Equipment Directive
(“WEEE”). This directive requires producers of electrical goods to be financially responsible for specified
collection, recycling, treatment and disposal of covered products. Producer obligations also include specified
collection, recycling, treatment and disposal of equipment that had been placed in the EU marketplace prior to
August 2005, and has reached its end of life. To date, specific legal requirements have not been finalized by all
member states, with certain member states delaying implementation until 2007 or beyond. In those countries
where legislation is not in effect, we have concluded that the costs of managing and recycling historical and
future waste equipment are not reasonably estimable, and no liability has been recognized. In those countries
which have enacted legislation, we have provided for the costs of managing and recycling historical and future
waste equipment. These costs, which are not material, are based on Logitech’s estimated market share of the total
cost, which depends on a number of factors, including administration and treatment costs as well as the
commercial cost of recycling.
On March 1, 2007, China’s Management Methods on the Control of Pollution Caused by Electronic
Information Products (“China RoHS”) entered into effect. This is substantially similar to the EU RoHS directive
and as such, Logitech products are already compliant. It is expected although not yet officially confirmed that
exclusions listed in EU RoHS will be carried into China RoHS legislation. China RoHS requires additional
labelling of product that will be shipped in China and Logitech has already taken steps to help ensure we comply
with these requirements.
In the U.S., Appliance Efficiency Regulations were adopted by the California Energy Commission. The
regulations set out standards for the energy consumption performance of products within the scope of the
regulations, which includes some of Logitech’s products. The standards apply to appliances sold or offered for
sale in California, and Logitech has redesigned or changed some products to comply with these regulations.
Similar environmental legislation may be enacted in other geographies, the cumulative impact of which
could be significant. If such legislation is enacted in other countries, Logitech intends to develop compliance
programs as necessary. However, until that time, we are not able to estimate any possible impact.
The effects on Logitech’s business of complying with other government regulations are limited to the cost
of allocation of the appropriate resources for agency fees and testing as well as the time required to obtain agency
approvals. The costs and schedule requirements are industry requirements and therefore do not represent an
undue burden relative to Logitech’s competitive position. As regulations change, we will seek to modify our
products or processes to address those changes.
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