Overstock.com 2009 Annual Report Download - page 32

Table of Contents
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 Website 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.
We may be accused of infringing intellectual property rights of third parties.
Other parties also may claim that we infringe their intellectual property rights. We have been and are subject to, and expect to continue to be subject to,
legal claims of alleged infringement of the intellectual property rights of third parties. The ready availability of damages, royalties and the potential for
injunctive relief has increased the defense litigation costs of patent infringement claims, especially those asserted by third parties whose sole or primary
business is to assert such claims. Such claims, whether or not meritorious, may result in significant expenditure of financial and managerial resources, and the
payment of damages or settlement amounts. Additionally, we may become subject to injunctions prohibiting us from using software or business processes we
currently use or may need to use in the future, or requiring us to obtain licenses from third parties when such licenses may not be available on financially
feasible terms or terms acceptable to us or at all. In addition, we may not be able to obtain on favorable terms, or at all, licenses or other rights with respect to
intellectual property we do not own in providing e-commerce services to other businesses and individuals under commercial agreements.
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 forego the use of our Website 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 Website 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.
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