TeleNav 2011 Annual Report Download - page 38

Table of Contents
event, a security breach or inappropriate disclosure of personal, private or confidential information could harm our reputation and our
relationships with current and potential end users. Even the perception of a security risk could inhibit market acceptance of our LBS. In addition,
we may be required to invest additional resources to protect against damages caused by any actual or perceived disruptions of our LBS or
security breaches. We may also be required to provide information about the location of an end user’s mobile phone (or vehicle, with respect to
certain of our enterprise LBS) to government authorities, which could result in public perception that we are providing the government with
intelligence information and deter some end users from using our services. Any of these developments could harm our business.
Changes in government regulation of the wireless communications industry and the automobile industry may adversely affect our business.
It is possible that a number of laws and regulations may be adopted in the United States and elsewhere that could restrict the wireless
communications industry or further regulate the automobile industry, including laws and regulations regarding lawful interception of personal
data, use of mobile phones or navigation services within autos or the control of such use, privacy, taxation, content suitability, copyright and
antitrust. Furthermore, the growth and development of electronic storage of personal information may prompt calls for more stringent consumer
protection laws that may impose additional burdens on companies such as ours that store personal information. We anticipate that regulation of
our industry will increase and that we will be required to devote legal and other resources to address this regulation. Changes in current laws or
regulations or the imposition of new laws and regulations in the United States or elsewhere regarding the wireless communications or
automobile industries may lessen the growth of wireless communications or automobile industry services and make operation more costly, and
may materially reduce our ability to increase or maintain sales of our LBS.
We may become subject to significant product liability costs.
If our LBS or products contain defects, there are errors in the maps supplied by third party map providers or if our end users do not heed
our warnings about the proper use of these products, collisions or accidents could occur resulting in property damage, personal injury or death. If
any of these events occurs, we could be subject to significant liability for personal injury and property damage and under certain circumstances
could be subject to a judgment for punitive damages. We maintain limited insurance against accident related risks involving our products.
However, we cannot assure you that this insurance would be sufficient to cover the cost of damages to others or will continue to be available at
commercially reasonable rates. In addition, we may be named as a defendant in litigation by consumers individually or on behalf of a class if
their handsets or automobiles suffer problems from software downloads from our wireless carrier customers or automobile manufacturer and
OEM customers. If we are unable to obtain indemnification from our customer for any damages or legal fees we may incur in connection with
such complaints, our financial position may be adversely impacted. In addition, insurance coverage generally will not cover awards of punitive
damages and may not cover the cost of associated legal fees and defense costs. If we are unable to maintain sufficient insurance to cover product
liability costs or if our insurance coverage does not cover an award, our business, financial condition and results of operations could be adversely
affected.
Government regulation designed to protect end user privacy may make it difficult for us to provide our services or adopt advertising based
revenue models.
We transmit and store a large volume of personal information in the course of providing our LBS. This information is increasingly subject
to legislation and regulations in numerous jurisdictions around the world. This government action is typically intended to protect the privacy and
security of personal information that is collected, stored and transmitted in or from the governing jurisdiction.
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