Overstock.com 2009 Annual Report Download - page 33

Table of Contents
We may not be able to enforce protection of our intellectual property rights under the laws of other countries.
We have begun to sell products internationally and consequently 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.
Our business and reputation may be harmed by the listing or sale of pirated, counterfeit or illegal items by third parties, and by intellectual property
litigation.
We have received in the past, and we anticipate we will receive in the future, communications alleging that certain items listed or sold through our
Website infringe third-party copyrights, trademarks and trade names or other intellectual property rights or that we have otherwise infringed third parties' past,
current or future intellectual property rights.
We may be unable to prevent third parties from listing unlawful goods, and we may be subject to allegations of civil or criminal liability for unlawful
activities carried out by third parties through our Website. In the future, we may implement measures to protect against these potential liabilities that could
require us to spend substantial resources and/or to reduce revenues by discontinuing certain service offerings. Any costs incurred as a result of liability or
asserted liability relating to the sale of unlawful goods or the unlawful sale of goods could harm our revenues, business, prospects, financial condition and
results of operations.
Resolving litigation or claims regarding patents or other intellectual property, whether meritorious or not, could be costly, time-consuming, cause service
delays, divert our management and key personnel from our business operations, require expensive or unwanted changes in our methods of doing business or
require us to enter into costly royalty or licensing agreements, if available. As a result, these claims could harm our business.
Negative publicity generated as a result of the foregoing could damage our reputation, harm our business and diminish the value of our brand name.
We are involved in substantial litigation.
From time to time we receive claims of and become subject to consumer protection, employment, intellectual property and other commercial litigation
related to the conduct and operation of our business and the sale of products on our Website. In connection with such litigation, we may be subject to
significant damages or equitable remedies. In addition, we have in the past been, are now, and in the future may be, involved in substantial litigation in which
we are the plaintiff, including litigation regarding the constitutionality of certain state tax laws, and the prime broker litigation described below. Any of such
litigation, whether as plaintiff or defendant, could be costly and time consuming and could divert management and key personnel from our regular business
operations. We do not currently believe that any of our outstanding litigation will have a material adverse effect on our financial position, results of operations
cash flow or business. However, due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of
these matters could materially affect our business, results of operations, financial position, or cash flows.
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