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TableofContents
Ourabilitytouseournetoperatinglossandtaxcreditcarryforwardsmightbelimited.
TheuseofaportionofourU.S.netoperatinglossandtaxcreditcarryforwardsissubjecttoannuallimitationspursuanttoU.S.taxlaw.Section382ofthe
U.S.InternalRevenueCodegenerallyimposesanannuallimitationontheamountofnetoperatinglossortaxcreditcarryforwardsthatmightbeusedtooffset
taxableincomewhenacorporationhasundergonesignificantchangesinownership.Asaresult,futurechangesinownershipcouldputfurtherlimitationsonthe
availabilityofournetoperatinglossortaxcreditcarryforwards.
Deteriorationinglobalcreditandfinancialmarketconditionscouldnegativelyimpactthevalueofourcurrentportfolioofcashequivalentsorshort-term
investmentsandourabilitytomeetourfinancingobjectives.
Ourcashandcashequivalentsaremaintainedinhighlyliquidinvestmentswithremainingmaturitiesof90daysorlessatthetimeofpurchase.Ourshort-term
investmentsconsistprimarilyofreadilymarketabledebtsecuritieswithremainingmaturitiesofmorethan90daysatthetimeofpurchase.Ourinvestmentpolicy
hasasitsprincipalobjectivesthepreservationofprincipalandmaintenanceofliquidity.Wemitigatedefaultriskbyinvestinginhigh-qualityinvestmentgrade
securities,limitingthetimetomaturityandbymonitoringthecounter-partiesandunderlyingobligorsclosely.
Whileasofthedateofthisfiling,wearenotawareofanymaterialdowngrades,losses,orothersignificantdeteriorationinthefairvalueofourcash
equivalentsorshort-terminvestments,noassurancecanbegiventhatfuturedeteriorationinconditionsoftheglobalcreditandfinancialmarketswouldnot
negativelyimpactourcurrentportfolioofcashequivalentsorshort-terminvestmentsorourabilitytomeetourfinancingobjectives.
Weareattimessubjecttointellectualpropertylegalproceedingsandclaimswhichcouldcauseustoincursignificantadditionalcostsorpreventusfrom
sellingourproducts,andwhichcouldadverselyaffectourresultsofoperationsandfinancialcondition.
Wearesubjectfromtime-to-timetolegalproceedingsandclaims,includingclaimsofallegedinfringementofthepatents,trademarksandotherintellectual
propertyrightsofthirdpartiesbyus,orourcustomers,inconnectionwiththeiruseofourproducts.Intellectualpropertylitigationcanbeexpensiveandtime-
consuming,regardlessofthemeritsofanyclaim,andcoulddivertourmanagement'sattentionfromoperatingourbusiness.Inaddition,intellectualproperty
lawsuitsaresubjecttoinherentuncertaintiesduetothecomplexityofthetechnicalissuesinvolved,whichmaycauseactualresultstodiffermateriallyfromour
expectations.Patentlitigationhasincreasedduetothecurrentuncertaintyofthelawandtheincreasingcompetitionandoverlapofproductfunctionalityinthe
field.Someoftheactionsthatwefacefromtime-to-timeseekinjunctionsagainstthesaleofourproductsand/orsubstantialmonetarydamages,whichifgrantedor
awarded,couldmateriallyharmourbusiness,financialconditionandoperatingresults.
Wecannotbecertainthatourproductsdonotandwillnotinfringeissuedpatentsorotherintellectualpropertyrightsofothers.Wemaynotbeawareof
currentlyfiledpatentapplicationsthatrelatetoourproductsortechnology.Ifpatentsarelaterissuedontheseapplications,wemaybeliableforinfringement.If
ourproductswerefoundtoinfringetheintellectualpropertyrightsofothers,wecouldberequiredtopaysubstantialdamages,ceasethemanufacture,useandsale
ofinfringingproductsinoneormoregeographiclocations,expendsignificantresourcestodevelopnon-infringingtechnology,discontinuetheuseofspecific
processesorobtainlicensestothetechnologyinfringed.Wemightnotbeabletoobtainthenecessarylicensesonacceptableterms,oratall,orbeableto
reengineerourproductssuccessfullytoavoidinfringement.Anyoftheforegoingcouldcauseustoincursignificantcostsandpreventusfromsellingourproducts,
whichcouldadverselyaffectourresultsofoperationsandfinancialcondition.See"Item8.FinancialStatementsandSupplementaryData-Note14.Legal,
EnvironmentalandOtherContingencies"containedinthisreportforadescriptionofpendingintellectualpropertyproceedings.
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