Overstock.com 2011 Annual Report Download - page 12

Table of Contents
Financial Information about Geographic Areas
See Item 15 of Part IV, "Financial Statements"—Note 22—"Business Segments" for more information.
Intellectual Property and Trade Secrets
We regard our domain names and similar intellectual property as critical to our success. We rely on a combination of laws and contractual restrictions
with our employees, customers, suppliers, affiliates and others to establish and protect our proprietary rights, including the law pertaining to trade secrets.
Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our intellectual property or trade secrets without
authorization. In addition, we cannot ensure that others will not independently develop similar intellectual property. Although we have registered and are
pursuing the registration of our key trademarks in the United States and some other countries, some of our trade names may not be eligible to receive
registered trademark protection. In addition, effective trademark protection may not be available or we may not seek protection in every country in which we
market or sell our products and services, including in the United States. Additionally our efforts to protect our trade secrets may not succeed.
Third parties have in the past recruited and may in the future recruit our employees who have had access to our proprietary technologies, processes and
operations. These recruiting efforts expose us to the risk that such employees and those hiring them will misappropriate and exploit our intellectual property
and trade secrets.
Legal and Regulatory Matters
From time to time, we receive claims and become subject to regulatory investigations or actions, consumer protection, employment, intellectual property
and other commercial litigation related to the conduct of our business. We also prosecute lawsuits to enforce our legal rights. Such litigation could be costly
and time consuming and could divert our management and key personnel from our business operations. The uncertainty of litigation increases these risks. In
connection with such litigation, we may be subject to significant damages, associated costs, or equitable remedies relating to the operation of our business and
the sale of products on our Website. Any such litigation may materially harm our business, prospects, results of operations, financial condition or cash flows.
These and other types of claims could result in increased costs of doing business through legal expenses, adverse judgments or settlements or require us
to change our business practices in expensive and significant ways. In addition, litigation could result in interpretations of the law that require us to change our
business practices or otherwise increase our costs.
Additional litigation may be necessary 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. Any litigation, regardless of outcome or merit, could result in substantial costs and diversion of management and
technical resources, any of which could materially harm our business (see Item 1A—"Risk Factors").
See the information set forth under Item 15 of Part IV, "Financial Statements—Note 13—Commitments and Contingencies, subheading Legal
Proceedings," contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K.
Government Regulation
Our services are subject to federal and state consumer protection laws including laws protecting the privacy of consumer information and regulations
prohibiting unfair and deceptive trade practices. In particular, under federal and state financial privacy laws and regulations, we must provide notice to
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