Qualcomm 2014 Annual Report Download - page 23

likelihood of changes to established patent laws. In the United States, there is continued discussion regarding potential patent law changes. The
laws in certain foreign countries in which our products are or may be manufactured or sold, including certain countries in Asia, may not protect
our intellectual property rights to the same extent as the laws in the United States. We expect that in the next few years the European Union will
adopt a unitary patent system that may broadly impact that region’s patent regime. We cannot predict with certainty the long-term effects of any
potential changes. In addition, we cannot be certain that the laws and policies of any country or the practices of any standards bodies, foreign or
domestic, with respect to intellectual property enforcement or licensing or the adoption of standards, will not be changed in the future in a way
detrimental to our licensing program or to the sale or use of our products or technology.
We have had and may in the future have difficulty in certain circumstances in protecting or enforcing our intellectual property rights and/or
contracts, including collecting royalties for use of our patent portfolio in particular foreign jurisdictions due to, among others: policies of foreign
governments; challenges to our licensing practices under such jurisdictions’ competition laws; adoption of mandatory licensing provisions by
foreign jurisdictions (either with controlled/regulated royalties or royalty free); failure of foreign courts to recognize and enforce judgments of
contract breach and damages issued by courts in the United States; and/or challenges pending before foreign competition agencies to the pricing
and integration of additional features and functionality into our chipset products. Although our license agreements provide us with the right to
audit the books and records of licensees, audits can be expensive, time consuming, incomplete and subject to dispute. Particularly in China,
certain licensees have disputed or underreported royalties owed to us under their license agreements with us, and certain companies have yet to
enter into or delayed entering into license agreements for their use of our intellectual property, and such licensees and/or companies may
continue to do so in the future.
We may need to litigate in the United States or elsewhere in the world to enforce our contract and/or intellectual property rights, protect our
trade secrets or determine the validity and scope of proprietary rights of others. As a result of any such litigation, we could lose our ability to
enforce one or more patents, portions of our license agreements could be determined to be invalid or unenforceable and/or we could incur
substantial unexpected operating costs. Any action we take to enforce our contract or intellectual property rights could be costly and could
absorb significant management time and attention, which, in turn, could negatively impact our operating results. Further, even a positive
resolution to our enforcement efforts may take time to conclude, which may reduce our revenues in the period prior to conclusion.
We are subject to government regulations and policies. Our business may suffer as a result of new or changed laws, regulations or policies,
our failure or inability to comply with laws, regulations or policies or adverse rulings in enforcement or other proceedings.
Our business, products and services, and those of our customers and licensees, are subject to various laws and regulations globally, as well
as government policies and the specifications of international, national and regional communications standards bodies. The adoption of new
laws, regulations or policies, changes in the interpretation of existing laws, regulations or policies, changes in the regulation of our activities by a
government or standards body and/or adverse rulings in court, regulatory, administrative or other proceedings relating to such laws, regulations
or policies, including, among others, those affecting licensing practices, competitive business practices, the use of our technology or products,
protection of intellectual property, trade, foreign investments or loans, spectrum availability and license issuance, adoption of standards, the
provision of device subsidies by wireless operators to their customers, taxation, environmental protection or employment, could have an adverse
effect on our business.
We are currently subject to various governmental investigations and/or proceedings, and certain matters are described more fully in the
notes to our consolidated financial statements. See “Notes to Consolidated Financial Statements, Note 7 - Commitments and Contingencies.”
The unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial
condition and/or cash flows. Depending on the type of matter, various remedies that could result from an unfavorable resolution include, among
others, injunctions, monetary damages or fines or other orders to pay money, and the issuance of orders to cease certain conduct and/or modify
our business practices.
Delays in government approvals or other governmental activities that could result from, among others, a decrease in or a lack of funding for
certain agencies or branches of the government and/or political changes, could result in our incurring higher costs, could negatively impact our
ability to timely consummate strategic transactions and/or could have other negative impacts on our business and the businesses of our customers
and licensees.
National, state and local environmental laws and regulations affect our operations around the world. These laws may make it more
expensive to manufacture, have manufactured and sell products, and our costs could increase if our vendors (e.g., third-party manufacturers or
utility companies) pass on their costs to us.
Regulations in the United States require that we determine whether certain materials used in our products, referred to as conflict minerals,
originated in the Democratic Republic of the Congo or an adjoining country, or were from recycled or scrap sources. The verification and
reporting requirements, in addition to customer demands for conflict free sourcing, impose additional costs on us and on our suppliers, and may
limit the sources or increase the prices of materials used in our products.
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