ServiceMagic 2009 Annual Report Download - page 22

Table of Contents
We rely on a combination of laws and contractual restrictions with employees, customers, suppliers, affiliates and others to establish and
protect our various intellectual property rights. For example, we have generally registered and continue to apply to register and renew, or secure
by contract where appropriate, trademarks and service marks as they are developed and used, and reserve, register and renew domain names as
we deem appropriate. Effective trademark protection may not be available or may not be sought in every country in which products and services
are made available and contractual disputes may affect the use of marks governed by private contract. Similarly, not every variation of a domain
name may be available or be registered, even if available.
We also generally seek to apply for patents or for other similar statutory protections as and if we deem appropriate, based on then current
facts and circumstances, and will continue to do so in the future. No assurances can be given that any patent application we have filed will result
in a patent being issued, or that any existing or future patents will afford adequate protection against competitors and similar technologies. In
addition, no assurances can be given that third parties will not create new products or methods that achieve similar results without infringing
upon patents we own.
Despite these precautions, our intellectual property rights may still not be protected in a meaningful manner, challenges to contractual rights
could arise or third parties could copy or otherwise obtain and use our intellectual property without authorization. The occurrence of any of these
events could result in the erosion of our brand names and limitations on our ability to control marketing on or through the internet using our
various domain names, as well as impede our ability to effectively compete against competitors with similar technologies, any of which could
adversely affect our business, financial conditions and results of operations.
From time to time, we have been subject to legal proceedings and claims in the ordinary course of business, including claims of alleged
infringement of trademarks, copyrights, patents and other intellectual property rights held by third parties. In addition, litigation may be
necessary in the future to enforce our intellectual property rights, protect our trade secrets or to determine the validity and scope of proprietary
rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of
management and technical resources, any of which could adversely affect our business, financial condition and results of operations. Patent
litigation tends to be particularly protracted and expensive.
Our success depends, in part, on the integrity of our systems and infrastructure. System interruption and the lack of integration and
redundancy in our information systems may affect our businesses.
To succeed, our systems and infrastructure must perform well on a consistent basis. From time to time, we may experience occasional
system interruptions that make some or all of our systems or data unavailable or prevent us from providing services, which could adversely
affect our business. Moreover, as traffic to our various websites and the related number of users and customers increase and the number of new
(and presumably more complex) products and services that we introduce continues to grow, we will need to upgrade our systems, infrastructure
and technologies generally to facilitate this growth. If we do not do so or if we experience inefficiencies and/or operational failures in connection
with these efforts, third parties with whom we do business may not be able to access our services on an intermittent or prolonged basis and the
quality of the user/customer experience could be adversely affected. Moreover, even if we do not encounter any inefficiencies and/or operational
failures in connection with these efforts, third parties with whom we do business may not make the changes to their systems, infrastructure and
technology needed in order to access our services on a timely basis, if at all. The occurrence of any of these events could adversely affect our
business, financial condition and results of operations.
We also rely on third party computer systems, data centers, broadband and other communications systems and service providers in
connection with the provision of services generally, as well as to facilitate and process certain transactions with customers. Any interruptions,
outages or delays in our
18