NVIDIA 2013 Annual Report Download - page 170

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our products or intellectual property rights to the same extent as the laws of the United States. This makes the possibility
of piracy of our technology and products more likely. We continuously assess whether and where to seek formal protection
for particular innovations and technologies based on such factors as:
• the commercial significance of our operations and our competitors' operations in particular countries and regions;
• the location in which our products are manufactured;
• our strategic technology or product directions in different countries; and
• the degree to which intellectual property laws exist and are meaningfully enforced in different jurisdictions.
Our pending patent applications and any future applications may not be approved. In addition, any issued patents may
not provide us with competitive advantages or may be challenged, invalidated, infringed, circumvented or misappropriated
by third parties. We expect that as the number of issued hardware and software patents increases and as competition intensifies,
the volume of intellectual property infringement claims and lawsuits may increase. We may in the future become involved
in lawsuits or other legal proceedings alleging patent infringement or other intellectual property rights violations by us or
parties that we have agreed to indemnify for certain claims of infringement. Third parties may also claim that our employees
have misappropriated or divulged their former employers’ trade secrets or confidential information.
An unfavorable ruling in any such intellectual property related litigation could include significant damages, invalidation
of a patent or family of patents, indemnification of customers, payment of lost profits, or, when it has been sought, injunctive
relief.
In addition, in the future, we may need to commence litigation or other legal proceedings in order to:
• assert claims of infringement of our intellectual property;
• enforce our patents;
• protect our trade secrets or know-how; or
• determine the enforceability, scope and validity of the propriety rights of others.
If we have to initiate litigation in order to protect our intellectual property, our operating expenses may increase which
could negatively impact our operating results. Our failure to effectively protect our intellectual property could harm our
business.
If infringement claims are made against us or our products are found to infringe a third parties' patent or intellectual
property, we or one of our indemnitees may have to seek a license to the third parties' patent or other intellectual property
rights. However, we may not be able to obtain licenses at all or on terms acceptable to us particularly from our competitors.
If we or one of our indemnitees is unable to obtain a license from a third party for technology that we use or that is used in
one of our products, we could be subject to substantial liabilities or have to suspend or discontinue the manufacture and
sale of one or more of our products. We may also have to make royalty or other payments, or cross license our technology.
If these arrangements are not concluded on commercially reasonable terms, our business could be negatively impacted.
Furthermore, the indemnification of a customer or other indemnitee may increase our operating expenses which could
negatively impact our operating results.
Changes in United States tax legislation regarding our foreign earnings could adversely impact our business.
Currently, a majority of our revenue is generated from customers located outside the United States, and a significant
portion of our assets, including employees, are located outside the United States. United States income taxes and foreign