TeleNav 2014 Annual Report Download - page 37

Table of Contents
laws that may impose additional burdens on companies such as ours that store personal information. We anticipate that regulation of the
industries in which our products and services are used 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 make operation more costly, and may materially reduce our ability to increase or
maintain sales of our products and services.
We may become subject to significant product liability costs.
If our navigation services 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 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 products and services. 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.
Legislation may also be adopted in various jurisdictions that prohibits use of personal information and search histories to target end users
with tailored advertising, or provide advertising at all. Although our advertising revenue to date is not significant, we anticipate we will continue
to grow advertising revenue in the future to improve average revenue per user in certain markets.
We could be adversely affected if domestic or international legislation or regulations are expanded to require changes in our business
practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business. For
example, the USA PATRIOT Act provides certain rights to U.S. law enforcement authorities to obtain personal information in the control of
U.S. persons and entities without notifying the affected individuals. If we are required to allocate significant resources to modify the delivery of
our services to enable enhanced legal interception of the personal information that we transmit and store, our results of operations and financial
condition may be adversely affected.
In addition, because various foreign jurisdictions have different laws and regulations concerning the storage and transmission of personal
information, we may face unknown requirements that pose compliance challenges in new international markets that we seek to enter. Such
variation could subject us to costs, delayed service launches, liabilities or negative publicity that could impair our ability to expand our
operations into some countries and therefore limit our future growth.
As privacy and data protection have become more sensitive issues, we may also become exposed to potential liabilities as a result of
differing views on the privacy of personal information. These and other privacy concerns could adversely impact our business, results of
operations and financial condition.
If we are unable to protect our intellectual property and proprietary rights, our competitive position and our business could be harmed.
We rely primarily on a combination of patent laws, trademark laws, copyright laws, trade secrets, confidentiality procedures and
contractual provisions to protect our proprietary technology. However, our issued patents and any future patents that may issue may not survive
a legal challenge to their scope, validity or enforceability, or provide significant protection for us. The failure of our patents to adequately protect
our technology might make it easier for our competitors to offer similar products or technologies. In addition, patents may not issue from any of
our current or any future applications.
Monitoring unauthorized use of our intellectual property is difficult and costly. The steps we have taken to protect our proprietary rights
may not be adequate to prevent misappropriation of our intellectual property. We may not be able to detect unauthorized use of, or take
appropriate steps to enforce, our intellectual property rights. Our competitors may also independently develop similar technology. In addition,
the laws of many countries do not protect our proprietary rights to as great an extent as do the laws of the United States. Any failure by us to
meaningfully protect our intellectual property could
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