Support.com 2008 Annual Report Download - page 27

Table of Contents
information of our customers and their end-users, including credit card information, and our employees and contractors may access and use that information in
the course of providing services for our customers. In addition, we collect and retain personal information of our employees in the ordinary course of our
business. We and our third-party contractors use commercially available technologies to secure this information. Despite these measures, third parties may
attempt to breach the security of our data or that of our customers. In addition, errors in the storage or transmission of data could breach the security of that
information. We may be liable to our customers for any breach in security and any breach could subject us to governmental or administrative proceedings or
monetary penalties, and harm our business and reputation. Also, computers are vulnerable to computer viruses, physical or electronic break-ins and similar
disruptions, which could lead to interruptions, delays or loss of data. We may be required to expend significant capital and other resources to comply with
mandatory privacy and security standards required by law, industry standard, or contract, and to further protect against security breaches or to correct problems
caused by any breach.
Privacy concerns and laws or other domestic or foreign regulations may require us to incur significant costs and may reduce the effectiveness of our
solutions, and our failure to comply with those laws or regulations may harm our business and cause us to lose customers.
Our software contains features that allow our customers and our technical support agents to access, control, monitor or collect information from computers
running the software. Federal, state and foreign government bodies and agencies, however, have adopted or are considering adopting laws and regulations
restricting or otherwise regulating the collection, use and disclosure of personal information obtained from consumers and individuals. Those regulations could
require costly compliance measures, could reduce the efficiency of our operations, and could require us to modify our products, systems or services. Liability for
violation of, costs of compliance with, and other burdens imposed by such laws and regulations may limit the use and adoption of our solutions and reduce
overall demand for them. Even the perception of privacy concerns, whether or not valid, may harm our reputation and inhibit adoption of our solutions. In
addition, we may face claims about invasion of privacy or inappropriate disclosure, use, storage, or loss of information obtained from our customers. Any
imposition of liability could harm our reputation, cause us to lose customers and cause our operating results to suffer.
We are exposed to risks associated with credit card and payment fraud and with credit card processing.
Certain of our customers use credit cards to pay for our Consumer technology support offerings. We may suffer losses as a result of orders placed with
fraudulent credit cards or other payment data. Our failure to detect or control payment fraud could have an adverse effect on our results of operations. We are
also subject to payment card association operating standards and requirements, as in effect from time to time. Compliance with those standards requires us to
invest in network and systems infrastructure and processes. Failure to comply with these rules or requirements may subject us to fines, potential contractual
liabilities, and other costs, resulting in harm to our business and results of operations.
We may not obtain sufficient patent protection, which could harm our competitive position, increase our expenses and harm our business.
Our success and ability to compete depend to a significant degree upon the protection of our software and other proprietary technology. It is possible that:
• We may not be issued patents we may seek to protect our technology;
• Competitors may independently develop similar technologies or design around any of our patents;
• Patents issued to us may not be broad enough to protect our proprietary rights; and
• Our issued patents could be successfully challenged.
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Source: SUPPORTSOFT INC, 10-K, March 11, 2009