Plantronics 2006 Annual Report Download - page 39

part i
War, terrorism, public health issues or other business interruptions could disrupt supply, delivery or
demand of products, which could negatively affect our operations and performance.
War, terrorism, public health issues or other business interruptions whether in the United States or
abroad, have caused or could cause damage or disruption to international commerce by creating economic
and political uncertainties that may have a strong negative impact on the global economy, our company,
and the our suppliers or customers. Our major business operations are subject to interruption by
earthquake, flood or other natural disasters, fire, power shortages, terrorist attacks, and other hostile acts,
public health issues, and other events beyond its control. Our corporate headquarters, information
technology, certain research and development activities, and other critical business operations, are located
near major seismic faults. While the we are partially insured for earthquake-related losses, our operating
results and financial condition could be materially affected in the event of a major earthquake or other
natural or manmade disaster.
Although it is impossible to predict the occurrences or consequences or any events, such as described
above, such events could significantly disrupt our operations. In addition, should major public health
issues, including pandemics, arise, we could be negatively impacted by the need for more stringent
employee travel restrictions, limitations in the availability of freight services, governmental actions
limiting the movement of products between various regions, delays in production ramps of new products,
and disruptions in the operations of our manufacturing vendors and component suppliers. Our operating
results and financial condition could be adversely affected by these events.
We have intellectual property rights that could be infringed by others and we are potentially at risk
of infringement of the intellectual property rights of others.
Our success will depend in part on our ability to protect our copyrights, patents, trademarks, trade dress,
trade secrets, and other intellectual property, including our rights to certain domain names. We rely
primarily on a combination of nondisclosure agreements and other contractual provisions as well as
patent, trademark, trade secret, and copyright laws to protect our proprietary rights. Effective trademark,
patent, copyright, and trade secret protection may not be available in every country in which our products
and media properties are distributed to customers. We currently hold 137 United States patents and
additional foreign patents and will continue to seek patents on our inventions when we believe it to be
appropriate. The process of seeking intellectual property protection can be lengthy and expensive.
Intellectual property may not be issued in response to our applications, and intellectual property that is
issued may be invalidated, circumvented or challenged by others. If we are required to enforce our
intellectual property or other proprietary rights through litigation, the costs and diversion of manage-
ment’s attention could be substantial. In addition, the rights granted under any intellectual property may
not provide us competitive advantages or be adequate to safeguard and maintain our proprietary rights.
Moreover, the laws of certain countries do not protect our proprietary rights to the same extent as do the
laws of the United States. If we do not enforce and protect our intellectual property rights, it could
materially adversely affect our business, financial condition and results of operations.
We are exposed to potential lawsuits alleging defects in our products and/or other claims related to
the use of our products.
The use of our products exposes us to the risk of product liability and hearing loss claims. These claims
have in the past been, and are currently being, asserted against us. None of the previously resolved claims
have materially affected our business, financial condition or results of operations, nor do we believe that
any of the pending claims will have such an effect. Although we maintain product liability insurance, the
coverage provided under our policies could be unavailable or insufficient to cover the full amount of any
such claim. Therefore, successful product liability or hearing loss claims brought against us could have a
material adverse effect upon our business, financial condition and results of operations.
AR 2006 ⯗33