Polaris 2013 Annual Report Download - page 34

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Powersports Ltd., an engineering company that develops high performance and high efficiency engines and
innovative vehicles.
We expended $139.2 million, $127.4 million, and $105.6 million for research and development activities in
2013, 2012 and 2011, respectively.
Intellectual Property
We rely on a combination of patents, trademarks, copyrights, trade secrets, and nondisclosure and non-
competition agreements to establish and protect our intellectual property and proprietary technology. We have
filed and obtained numerous patents in the United States and abroad, and regularly file patent applications
worldwide in our continuing effort to establish and protect our proprietary technology. Additionally, we have
numerous registered trademarks, trade names and logos in the United States, Canada and international
locations.
Competition
The off-road vehicle, snowmobile, motorcycle and small vehicle markets in the United States, Canada and
other global markets are highly competitive. Competition in such markets is based upon a number of factors,
including price, quality, reliability, styling, product features and warranties. At the dealer level, competition is
based on a number of factors, including sales and marketing support programs (such as financing and
cooperative advertising). Certain of our competitors are more diversified and have financial and marketing
resources that are substantially greater than those of Polaris.
We believe that our products are competitively priced and our sales and marketing support programs for
dealers are comparable to those provided by our competitors. Our products compete with many other
recreational products for the discretionary spending of consumers, and to a lesser extent, with other vehicles
designed for utility applications.
Product Safety and Regulation
Safety regulation. The federal government and individual states have promulgated or are considering
promulgating laws and regulations relating to the use and safety of certain of our products. The federal
government is currently the primary regulator of product safety. The Consumer Product Safety Commission
(CPSC) has federal oversight over product safety issues related to snowmobiles and off-road vehicles. The
National Highway Transportation Safety Administration (NHTSA) has federal oversight over product safety
issues related to motorcycles and small vehicles.
In August 2008, the Consumer Product Safety Improvement Act (‘‘Act’’) was passed which, among other
things, required ATV manufacturers and distributors to comply with previously voluntary American National
Standards Institute (ANSI) safety standards developed by the Specialty Vehicle Institute of America (SVIA).
We believe that our products comply with the ANSI/SVIA standards, and we have had an action plan on file
with the CPSC since 1998 regarding safety related issues. The Act also includes a provision which requires the
CPSC to complete an ATV rulemaking process it started in August 2006 regarding the need for safety
standards or increased safety standards for ATVs, which has not yet resulted in the issuance of a final rule.
We are a member of the Recreational Off-Highway Vehicle Association (ROHVA), which was established to
promote the safe and responsible use of side-by-side vehicles also known as Recreational Off-Highway
Vehicles (ROVs), a category that includes our RANGER and RZR side-by-side vehicles. Since early 2008,
ROHVA has been engaged in a comprehensive process for developing a voluntary standard for equipment,
configuration and performance requirements of ROVs through ANSI. Comments on the draft standard were
actively solicited from the CPSC and other stakeholders as part of the ANSI process. The standard, which
addresses stability, occupant retention, and other safety performance criteria, was approved and published by
ANSI in March 2010 and revised in 2011. In November 2013, the standard was reopened for maintenance and
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