Travelzoo 2002 Annual Report Download - page 30

‚ characteristics and quality of products and services;
‚ sales and other taxes; and
‚ other claims based on the nature and content of Internet materials.
We may be unable to protect our registered trademark or other proprietary intellectual property rights.
Our success depends to a signiÑcant degree upon the protection of the Travelzoo brand name. We rely
upon a combination of copyright, trade secret and trademark laws and non-disclosure and other contractual
arrangements to protect our intellectual property rights. The steps we have taken to protect our proprietary
rights, however, may not be adequate to deter misappropriation of proprietary information.
The U.S. Patent and Trademark OÇce registered the trademark for ""Travelzoo'' on January 23, 2001. If
we are unable to protect our rights in the mark, a key element of our strategy of promoting Travelzoo as a
brand could be disrupted and our business could be adversely aÅected. We may not be able to detect
unauthorized use of our proprietary information or take appropriate steps to enforce our intellectual property
rights. In addition, the validity, enforceability and scope of protection of intellectual property in Internet-
related industries is uncertain and still evolving. The laws of other countries in which we may market our
services in the future are uncertain and may aÅord little or no eÅective protection of our intellectual property.
The unauthorized reproduction or other misappropriation of our proprietary technology could enable third
parties to beneÑt from our technology and brand name without paying us for them. If this were to occur, our
business could be materially adversely aÅected.
We may face liability from intellectual property litigation that could be costly to prosecute or defend
and distract management's attention with no assurance of success.
We cannot be certain that our products, content and brand names do not or will not infringe valid patents,
copyrights or other intellectual property rights held by third parties. While we have a trademark for
""Travelzoo,'' many companies in the industry have similar names including the word ""travel''. We expect that
infringement claims in our markets will increase in number as more participants enter the markets. We may
be subject to legal proceedings and claims from time to time relating to the intellectual property of others in
the ordinary course of our business. We may incur substantial expenses in defending against these third party
infringement claims, regardless of their merit, and such claims could result in a signiÑcant diversion of the
eÅorts of our management personnel. Successful infringement claims against us may result in monetary
liability or a material disruption in the conduct of our business.
We may be liable as a result of information retrieved from or transmitted over the Internet.
We may be sued for defamation, negligence, copyright or trademark infringement or other legal claims
relating to information that is published or made available in our products. These types of claims have been
brought, sometimes successfully, against online services in the past. The fact that we distribute information via
e-mail may subject us to potential risks, such as liabilities or claims resulting from unsolicited e-mail or
spamming, lost or misdirected messages, security breaches, illegal or fraudulent use of e-mail or interruptions
or delays in e-mail service. In addition, we could incur signiÑcant costs in investigating and defending such
claims, even if we ultimately are not liable. If any of these events occur, our business could be materially
adversely aÅected.
Item 2. Properties
Our principal oÇces are located in approximately 2,000 square feet of oÇce space in New York, New
York under an operating lease with HQ Global Workplaces, Inc. that expires on June 30, 2004. Our West
Coast oÇces are located in approximately 3,000 square feet of oÇce space in Mountain View, California under
an operating lease with HQ Global Workplaces, Inc. that expires on December 31, 2003. We believe that our
leased facilities are adequate to meet our current needs; however, we intend to expand our operations and
therefore may require additional facilities in the future. We believe that such additional facilities are available.
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