Overstock.com 2005 Annual Report Download - page 23

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We may be unable to protect our proprietary technology or keep up with that of our competitors.
Our success depends to a significant degree upon the protection of our software and other proprietary intellectual property rights.
We may be unable to deter misappropriation of our proprietary information, detect unauthorized use and take appropriate steps to
enforce our intellectual property rights. In addition, our competitors could, without violating our proprietary rights, develop
technologies that are as good as or better than our technology.
Our failure to protect our software and other proprietary intellectual property rights or to develop technologies that are as good as
our competitors' could put us at a disadvantage to our competitors. In addition, the failure of the third parties whose products we offer
for sale on our Websites to protect their intellectual property rights, including their domain names, could impair our operations. These
failures could harm our business, results of operations and financial condition.
If we do not respond to rapid technological changes, our services could become obsolete and we could lose customers.
To remain competitive, we must continue to enhance and improve the functionality and features of our e-commerce businesses.
We may face material delays in introducing new services, products and enhancements. If this happens, our customers may forgo the
use of our Websites and use those of our competitors. The Internet and the online commerce industry are rapidly changing. If
competitors introduce new products and services using new technologies or if new industry standards and practices emerge, our
existing Websites and our proprietary technology and systems may become obsolete. Our failure to respond to technological change or
to adequately maintain, upgrade and develop our computer network and the systems used to process customers' orders and payments
could harm our business, prospects, financial condition and results of operations.
We may not be able to obtain trademark protection for our marks, which could impede our efforts to build brand identity.
We have filed trademark applications with the Patent and Trademark Office seeking registration of certain service marks and
trademarks. There can be no assurance that our applications will be successful or that we will be able to secure significant protection
for our service marks or trademarks in the United States or elsewhere as we expand internationally. Our competitors or others could
adopt product or service marks similar to our marks, or try to prevent us from using our marks, thereby impeding our ability to build
brand identity and possibly leading to customer confusion. Any claim by another party against us or customer confusion related to our
trademarks, or our failure to obtain trademark registration, could negatively affect our business.
We may not be able to enforce protection of our intellectual property rights under the laws of other countries.
As we continue to expand internationally, we are subject to risks of doing business internationally as related to our intellectual
property, including:
• legal uncertainty regarding liability for the listings and other content provided by our users, including uncertainty as a result of
less Internet-friendly legal systems, unique local laws, and lack of clear precedent or applicable law; and
• differing intellectual property laws, which may provide insufficient protection for our intellectual property.
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