TomTom 2015 Annual Report Download - page 47

MANAGEMENT BOARD REPORT
TOMTOM / ANNUAL REPORT AND ACCOUNTS 2015 / 46
LEGAL AND COMPLIANCE RISKS
INTELLECTUAL PROPERTY CLAIM
We rely on a combination of trademarks, trade names, patents,
confidentiality and non-disclosure agreements, copyrights and
design rights, to defend and protect our trade secrets and the
intellectual property in our expanding range of products. We
may be faced with claims that we have infringed the intellectual
property rights or patents of others, which if asserted against us
may result in us being ordered to pay substantial damages or
forced to stop or delay the development, manufacturing or sale of
infringing products. Any such outcome could have a material
adverse effect on our financial condition, results of operations
and liquidity. Furthermore, even if we were to prevail, any
litigation could be costly and time-consuming.
RISK RESPONSE
We have a dedicated Intellectual Property team responsible for
the protection of TomTom's products and services against
unauthorised use by third parties. By obtaining and enforcing
intellectual property rights, such as patents and trademarks,
TomTom can prevent the competition from reproducing our
unique products. TomTom has built a substantial prior art
portfolio and has a reputation for strongly defending its position
in all intellectual property litigation, including against non-
practicing entities (NPE).
PRIVACY OF CUSTOMER DATA RISK
We provide location-based and fitness products and services to
individual customers and as there is growing public awareness
and increased scrutiny by regulatory authorities, this means that
compliance with privacy regulations and customer expectations
is increasingly important in maintaining our competitive
position. Next to this, various governments across the globe are
implementing legislation allowing law enforcement and
intelligence services bodies direct access to data held by
businesses. Depending on country and cultural background, this
could raise additional concerns regarding the use of our products
and services. Our reputation and brand may suffer and
regulatory sanctions may be imposed if we fail to comply with
privacy laws and regulations or otherwise fail to meet our
customers' expectations in relation to privacy matters.
RISK RESPONSE
Inherent in the design and operations of our products and
services we apply 'privacy-by-design' to ensure that TomTom's
own Privacy Principles as well as obligations from applicable
privacy laws and regulations are structurally adhered to in the
design of our products and services and throughout our
operations.
INFORMATION SECURITY RISK
Our business operations and reputation are substantially
dependent on our ability to maintain confidentiality, integrity
and availability of information regarding customers, employees,
suppliers, proprietary technologies, intellectual property and
business processes. Additionally, the volume and sophistication
of information security ('cybersecurity') threats continue to
grow. The inadvertent disclosure of confidential information,
unauthorised access to our systems and networks, defective
products and sanctions potentially imposed by regulators could
adversely affect our business, our reputation and could have a
material adverse effect on our financial conditions, results of
operations and liquidity.
RISK RESPONSE
We structurally deploy and maintain information security
governance, controls, processes and tools in our engineering,
operations and products using a risk-based approach, based on
ISO information security standards.