TeleNav 2011 Annual Report Download - page 36

Table of Contents
Changes in business direction and market conditions could lead to charges related to structural reorganization and discontinuation of
certain products or services, which may adversely affect our financial results.
In response to changing market conditions and the desire to focus on new and more potentially attractive opportunities, we may be required
to strategically realign our resources and consider restructuring, eliminating, or otherwise exiting certain business activities. Any decision to
reduce investment in or dispose of or otherwise exit business activities may result in the recording of special charges, such as workforce
reduction and excessive facility space costs.
Risks related to our intellectual property and regulation
We operate in an industry with extensive intellectual property litigation. Claims of infringement against us or our wireless carrier customers
may cause our business, operating results and financial condition to suffer.
Our commercial success depends in part upon us and our customers not infringing intellectual property rights owned by others and being
able to resolve claims of intellectual property infringement without major financial expenditures. We operate in an industry with extensive
intellectual property litigation and it is not uncommon for our wireless carrier customers and competitors to be involved in infringement lawsuits
by or against third parties. Many industry participants that own, or claim to own, intellectual property aggressively assert their rights, and our
wireless carrier customers, which we agree in certain circumstances to indemnify for intellectual property infringement claims related to our
services, are often targets of such assertions. We cannot determine with certainty whether any existing or future third party intellectual property
rights would require us to alter our technologies, obtain licenses or cease certain activities.
We have received, and may in the future receive, claims from third parties asserting infringement and other related claims. As of the date
of this Annual Report on Form 10-K, we were named as a defendant in certain cases alleging that our services infringe other parties’ patents, as
well as other matters. See Part I, Item 3, “Legal Proceedings,” for a description of these matters. These cases and future litigation may make it
necessary to defend ourselves and our wireless carrier customers by determining the scope, enforceability and validity of third party proprietary
rights or to establish our proprietary rights. Some of our competitors may have substantially greater resources than we do and may be able to
sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition, patent
holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us or our wireless carrier
customers. These companies typically have little or no product revenue and therefore our patents may provide little or no deterrence against such
companies filing patent infringement lawsuits against us. Regardless of whether claims that we are infringing patents or other intellectual
property rights have any merit, these claims are time consuming and costly to evaluate and defend and could:
In addition to liability for monetary damages against us or, in certain circumstances, our wireless carrier customers, we may be prohibited
from developing, commercializing or continuing to provide certain of our LBS
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adversely affect our relationships with our current or future wireless carrier customers;
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cause delays or stoppages in the shipment of TeleNav enabled mobile phones, or cause us to modify or suspend the provision of our
LBS;
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cause us to incur significant expenses in defending claims brought against our wireless carrier customers or us;
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divert management
’
s attention and resources;
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subject us to significant damages or settlements;
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require us to enter into settlements, royalty or licensing agreements on unfavorable terms; or
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require us to cease certain activities.