Support.com 2008 Annual Report Download - page 28

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Table of Contents
We rely upon intellectual property laws to protect our proprietary rights, and if these rights are not sufficiently protected, it could harm our ability to
compete and to generate revenue.
We rely on a combination of laws, such as those applicable to patents, copyrights, trademarks and trade secrets, and contractual restrictions, such as
confidentiality agreements and licenses, to establish and protect our proprietary rights. Our ability to compete and grow our business could suffer if these rights
are not adequately protected. Our proprietary rights may not be adequately protected because:
• Laws and contractual restrictions may not adequately prevent infringement of our proprietary rights and misappropriation of our technologies or
deter others from developing similar technologies; and
• Policing infringement of our patents, trademarks and copyrights, misappropriation of our trade secrets, and unauthorized use of our products is
difficult, expensive and time-consuming, and we may be unable to determine the existence or extent of this infringement or unauthorized use.
Intellectual property litigation is expensive and time-consuming and could divert management’s attention from our business. The outcome of any litigation
is uncertain and could significantly impact our financial results. Also, the laws of other countries in which we market our products may offer little or no
protection of our proprietary technologies. Reverse engineering, unauthorized copying or other misappropriation of our proprietary technologies could enable
third parties to benefit from our technologies without paying us for them, which would harm our competitive position and market share.
We may face intellectual property infringement claims that could be costly to defend and result in our loss of significant rights.
Our business relies upon the use and licensing of technology and software. Other parties may assert intellectual property infringement claims against us or
our customers, and our products may infringe the intellectual property rights of third parties. For example, our products may infringe patents issued to third
parties. In addition, as is increasingly common in the software industry, we may be confronted with the aggressive enforcement of patents by companies whose
primary business activity is to acquire patents for the purpose of offensively asserting them against other companies. From time to time, we have received
allegations of intellectual property infringement, and we may receive more claims in the future. Intellectual property litigation is expensive and time-consuming
and could divert management’s attention from our business. The outcome of any litigation is uncertain and could significantly impact our financial results. If
there is a successful claim of infringement, we may be required to develop non-infringing technology or enter into royalty or license agreements, which may not
be available on acceptable terms, if at all. Our failure to develop non-infringing technologies or license proprietary rights on a timely basis would harm our
business.
Compliance with public company rules and regulations is costly and requires significant resources in proportion to our revenue.
The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the Securities and Exchange Commission and the Nasdaq Global Select
Market, has required changes in corporate governance practices of public companies. These rules and regulations require significant internal and external
compliance resources that are disproportionately costly for publicly traded companies of our size. Additionally, such compliance has made some activities more
time-consuming. These rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be
required to accept reduced coverage or incur substantially higher costs to obtain coverage. Also, these rules and regulations could also make it more difficult for
us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee, and qualified executive officers.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
25
Source: SUPPORTSOFT INC, 10-K, March 11, 2009