Ubisoft 2008 Annual Report Download - page 84

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UBISOFTANNUAL REPORT 2009
1.1.7.2 Legal Risks
1.1.7.2.1 Lawsuits – Legal proceedings and arbitration
There are no government, legal or arbitration proceedings, including any case of which the Company is aware, that are pending
or with which it is threatened, that are likely to have or which over the past 12 months have had a material impact on the nancial
position or protability of the Company and/or the Group, other than the one recognised in the consolidated nancial statements
and mentioned in Note 12 – Provisions.
The Group is subject to regular tax inspections in the countries where it is present.
1.1.7.2.2 Regulatory environment
The Company, like all game publishers, must comply with various national regulations, in particular covering the content of
games and consumer protection. Failure to comply with these regulations may have a negative impact on sales (delayed launch
or withdrawal of products from the market, for example).
The Company is constantly improving its internal controls to ensure respect for directives and principles laid down by professional
bodies. It is a member of the Entertainment Software Association in the United States, Interactive Software Federation of Europe
and Syndicat des Éditeurs de Logiciels de Loisirs in France.
1.1.7.2.3 Risks associated with intellectual property rights
Given the importance of the prominence of its brands and the piracy problem faced by all players in the video game industry, the
Company has taken the necessary measures to protect its portfolio of commercial brands as well as the other intellectual property
rights that it holds:
• Registration of both trademarks and copyright of games designed at European and international level;
• A dedicated anti-pirating team, whose task is to carry out a technology watch, advise development teams and coordinate action
between the various internal and external teams;
• Copyright infringement and piracy proceedings in France and abroad, pressing civil claims in criminal proceedings where
applicable, or via any other available criminal or civil avenues, and measures against hackers in order to obtain the removal of
games illegally put online.
Ubisoft is not dependent on any particular patents.
1.1.7.2.4 Licensing agreement risks
Every year, Ubisoft signs a series of partnership agreements with, in particular, prestigious partners such as lm studios, television
channels and celebrities, enabling it to develop its game catalogue and increase sales.
The biggest licensor accounts for nearly 6.7% of sales.
The potential interruption of certain partnerships, for whatever reason, at the behest of Ubisoft or its partners, would likely have
a negative impact on the revenue and future performance of the Company as it would not be offset by other new licences.
Ubisoft has established a series of internal controls at both marketing team and development team level to ensure the proper
implementation of licensing agreements and compliance with the instructions of its partners.