ServiceMagic 2013 Annual Report Download - page 20

Table of Contents
We may fail to adequately protect our intellectual property rights or may be accused of infringing the intellectual property rights of third
parties.
We regard our intellectual property rights, including trademarks, domain names, trade secrets, patents, copyrights and other similar
intellectual property, as critical to our success. For example, the businesses within our principal reporting segments (Search & Applications,
Match and Local) rely heavily upon their trademarks (primarily Ask.com, About.com, Dictionary.com, our various toolbar brands, Match.com,
OkCupid.com, OurTime.com, Meetic.com and HomeAdvisor.com and related domain names and logos), through which they market their
products and services and seek to build and maintain brand loyalty and recognition. So long as these businesses continue to use these trademarks
to identify their products and services and renew trademark registrations as required, they will continue to enjoy trademark protection
indefinitely under current laws, rules and regulations.
The businesses within our Search & Applications segment also rely upon trade secrets, including algorithms for the generation, organization
and presentation of search results. To a lesser extent, these businesses also rely upon patented and patent1pending proprietary technologies and
processes, primarily those relating to search1related products and services, with expiration dates for patented technologies ranging from 2017 to
2033, and copyrighted material, primarily emoticons, characters and other content that is incorporated into (and used in connection with the
marketing of) toolbars generally.
Our Match segment also relies upon trade secrets and certain patent1pending proprietary technologies relating to matching process systems
and related features, products and services. HomeAdvisor relies heavily upon trade secrets, primarily the matching algorithm through which
members of its network of home services professionals are matched with consumers, as well as related patented proprietary technologies that
expire in 2020.
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 (or will
file) 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 measures, 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 brands 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 condition 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 infrastructures and those of third parties. System interruptions and the lack
of integration and redundancy in our and third party information systems may affect our business.
To succeed, our systems and infrastructures 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 that prevent us from providing products and services, which
could adversely affect our business. Moreover, as traffic to our websites, applications
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