Overstock.com 2010 Annual Report Download - page 28

Table of Contents
Use of social media may adversely impact our reputation.
There has been a marked increase in use of social media platforms and similar devices, including weblogs (blogs), social media websites, and other
forms of Internet-based communications which allow individuals access to a broad audience of consumers and other interested persons. Consumers value
readily available information concerning retailers, manufacturers, and their goods and services and often act on such information without further investigation,
authentication and without regard to its accuracy. The availability of information on social media platforms and devices is virtually immediate as is its impact.
Social media platforms and devices immediately publish the content their subscribers and participants post, often without filters or checks on accuracy of the
content posted. The opportunity for dissemination of information, including inaccurate information, is seemingly limitless and readily available. Information
concerning the Company may be posted on such platforms and devices at any time. Information posted may be adverse to our interests, it may be inaccurate,
and may harm our performance, prospects or business. The harm may be immediate without affording us an opportunity for redress or correction. Such
platforms also could be used for dissemination of trade secret information, compromise of valuable company assets all of which could harm our business,
prospects, financial condition and results of operations.
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 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 business,
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