Overstock.com 2012 Annual Report Download - page 31

Table of Contents
to attract new customers and our financial condition would suffer. In addition, certain of our online marketing agreements may require us to pay upfront
fees and make other payments prior to the realization of the sales, if any, associated with those payments. Current or future relationships or agreements
may fail to produce the sales that we anticipate. We periodically conduct national television and radio branding and advertising campaigns. Such
campaigns are expensive and may not result in the cost-effective acquisition of customers.
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 or take appropriate steps to enforce our intellectual property
rights. In addition, our competitors may now have or may in the future develop technologies that are as good as or better than our technology without
violating our proprietary rights. Our failure to protect our software and other proprietary intellectual property rights or to utilize 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.
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 harm our business.
We may not be able to enforce protection of our intellectual property rights under the laws of other countries.
We 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.
We may be accused of infringing intellectual property rights of third parties.
Other parties have claimed and 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, even if 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
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