Orbitz 2013 Annual Report Download - page 21

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21
Our business is also subject to laws and regulations relating to our revenue generating and marketing activities, including
those prohibiting unfair and deceptive advertising or practices. Our travel services are subject to regulation and laws governing
the offer of travel products and services, including laws requiring us to register as a “seller of travel” in various jurisdictions
and to comply with certain disclosure requirements. As an OTC that offers customers the ability to book air travel in the United
States, we are also subject to regulation by the Department of Transportation, which has authority to enforce economic
regulations and may assess civil penalties or challenge our operating authority.
We are involved in various legal proceedings and may experience unfavorable outcomes, which could affect our financial
position.
We are involved in various legal proceedings, including, but not limited to, actions relating to intellectual property, in
particular patent infringement claims against us, tax, antitrust, employment law and other negligence, breach of contract and
fraud claims, which involve claims for substantial amounts of money or for other relief or that might necessitate changes to our
business or operations. The defense of these actions may be both time consuming and expensive. If any of these legal
proceedings were to result in an unfavorable outcome, it could have a material adverse effect on our business, financial position
and results of operations. In addition, historically, our insurers have reimbursed us for a significant portion of costs we incurred
to defend cases related to use or occupancy tax of hotel accommodations that some states and localities impose (“hotel
occupancy tax”). We will not receive any additional insurance reimbursements in future periods as our insurance coverage has
now been exhausted.
We may not be effectively protecting our intellectual property, which would allow competitors to duplicate our products and
services. This could make it more difficult for us to compete with them.
Our success and ability to compete depend, in part, upon our technology and other intellectual property, including our
brands. Among our significant assets are our software and other proprietary information and intellectual property rights. We
rely on a combination of copyright, trademark and patent laws, trade secrets, confidentiality procedures and contractual
provisions to protect these assets. However, we have a limited number of patents, and our software and related documentation
are protected principally under trade secret and copyright laws, which afford only limited protection, and the laws of some
jurisdictions provide less protection for our proprietary rights than the laws of the United States. We have granted Travelport an
exclusive license to our supplier link technology, including our patents related to that technology. Under the exclusive license,
Travelport has the first right to enforce those patents, and so we will only be able to bring actions to enforce those patents if
Travelport declines to do so. Unauthorized use and misuse of our intellectual property could have a material adverse effect on
our business, financial condition and results of operations, and the legal remedies available to us may not adequately
compensate us for the damages caused by unauthorized use.
Further, intellectual property challenges have been increasingly brought against members of the travel industry. These
legal actions have in the past, and might in the future, result in substantial costs and diversion of resources and management
attention. In addition, we may need to take legal action in the future to enforce our intellectual property rights, to protect our
trade secrets or to determine the validity and scope of the proprietary rights of others, and these enforcement actions could
result in the invalidation or other impairment of intellectual property rights we assert.
Our ability to attract, train and retain executives and other qualified employees is critical to our results of operations and
future growth.
We depend substantially on the continued services and performance of our key executives, senior management and
skilled personnel, particularly our professionals with experience in our industry and our information technology and systems.
Any of these individuals may choose to terminate their employment with us at any time. The specialized skills we require can
be difficult and time-consuming to acquire and, as a result, these skills are often in short supply. A significant period of time
and expense may be required to hire and train replacement personnel when skilled personnel depart the Company. Our inability
to hire, train and retain a sufficient number of qualified employees could materially hinder our business by, for example,
delaying our ability to bring new products and services to market or impairing the success of our operations or prospects for
future growth.