Netgear 2011 Annual Report Download - page 12

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Table of Contents
Intellectual Property
We believe that our continued success will depend primarily on the technical expertise, speed of technology implementation, creative skills
and management abilities of our officers and key employees, plus ownership of a limited but important set of copyrights, trademarks, trade
secrets and patents. We primarily rely on a combination of copyright, trademark and trade secret and patent laws, nondisclosure agreements with
employees, consultants and suppliers and other contractual provisions to establish, maintain and protect our proprietary rights. We hold 43 issued
United States patents that expire between years 2013 and 2028 and 19 foreign patents that expire between 2012 and 2026. In addition, we
currently have a number of pending United States and foreign patent applications related to technology and products offered by us. We also rely
on third-party licensors for patented hardware and software license rights in technology that are incorporated into and are necessary for the
operation and functionality of our products. Our success will depend in part on our continued ability to have access to these technologies.
We have trade secret rights for our products, consisting mainly of product design, technical product documentation and software. We also
own, or have applied for registration of trademarks, in connection with our products in the United States and internationally, including
NETGEAR, the NETGEAR logo, NETGEAR Green, the NETGEAR Green logo, NETGEAR Digital Entertainer, the NETGEAR Digital
Entertainer logo, Genie, the Genie logo,Readyshare, Neo TV, the Neo TV logo, NETGEAR Stora, the NETGEAR Stora logo, Connect with
Innovation, ProSafe, RangeMax, ReadyNAS, Smart Wizard, ProSecure, the ProSecure logo, Push2TV, Ultraline, Proline, Liteline, Envoy
Service Management System, Versalink, Wirespeed, Leaf Networks, and X-RAID. We have registered a number of Internet domain names that
we use for electronic interaction with our customers including dissemination of product information, marketing programs, product registration,
sales activities, and other commercial uses.
Seasonal Business
We have historically experienced increased net sales in our third and fourth fiscal quarters as compared to other quarters in our fiscal year
due to seasonal demand of consumer markets related to the beginning of the school year and the holiday season. However, because of irregular
and significant purchases from customers in other markets, such as the service provider market, this pattern has not been consistent. As such, any
pattern should not be considered a reliable indicator of our future net sales or financial performance.
Backlog
We believe the actual amount of product backlog at any particular time is not a meaningful indication of our future business. Our backlog
consists of products for which customer purchase orders have been received and that are scheduled or in the process of being scheduled for
shipment. While we expect to fulfill the order backlog within the current year, most orders are subject to rescheduling or cancellation with little
or no penalties. Because of the possibility of customer changes in product scheduling or order cancellation, our backlog as of any particular date
may not be an indicator of net sales for any subsequent period. Accordingly, backlog should not be considered a reliable indicator of our ability
to achieve any particular level of revenue or financial performance.
Environmental Laws
Our products and manufacturing process are subject to numerous governmental regulations, which cover both the use of various materials
as well as environmental concerns. Environmental issues such as pollution and climate change have had significant legislative and regulatory
efforts on a global basis, and there are expected to be additional changes to the regulations in these areas. These changes could directly increase
the cost of energy which may have an impact on the way we manufacture products or utilize energy to produce our products. In addition, any
new regulations or laws in the environmental area might increase the cost of raw materials we use in our products. Other regulations in the
environmental area may require us to continue to monitor and ensure
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