Under Armour 2005 Annual Report Download - page 13

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manufactured. Our major trademarks include the Under Armour logo and design and Under Armour wordmark,
both of which are registered in the United States, the European Union, Japan, Taiwan, China and Canada, among
other places. We also own trademark registrations for HeatGear®, ColdGear®, AllseasonGear®and Advantage is
Undeniable®, and we have applied to register our Protect This House™, Under Armour logo/Metal, Duplicity™
and Click-Clack™trademarks. We also own domain names for our primary trademarks and hold copyrights for
our Good-Bye Girl and Protect this House commercials. We intend to continue to strategically register, both
domestically and internationally, trademarks and copyrights we utilize today and those we develop in the future.
We will continue to aggressively police our trademarks and pursue those who infringe, both domestically and
internationally.
We believe that the distinctive marks that we use in connection with our products are important in building
our brand image and distinguishing our products from those of others. These marks are among our most valuable
assets. In addition to our distinctive marks, we also place significant value on our trade dress, which is the overall
image and appearance of our products, and we believe that our trade dress helps to distinguish our products in the
marketplace.
The intellectual property rights in the technology, fabrics and processes used to manufacture our products
generally are owned or controlled by our suppliers. As a result, our ability to obtain patent protection for our
products is limited and we currently do not own any fabric or process patents, except for a pending patent
application that includes Kevin Plank as a co-inventor. We focus our efforts on obtaining patent protection for
what we believe to be strategic, new product applications in the marketplace. We have filed patent applications in
connection with certain of our products that we believe offer a unique utility or function, such as the Duplicity
Sports Bra, the Coldgear Hood and the Grippy Shirt. We will continue to file patent applications where we deem
appropriate to protect our inventions and designs.
Competition
The market for active sports apparel is highly competitive and includes many new competitors as well as
increased competition from established companies expanding their production and marketing of performance
products. The fabrics and technology used in manufacturing our products are generally not unique to us, and we
do not currently own any fabric or process patents or copyrights. Many of our competitors are large apparel and
sporting goods companies with strong worldwide brand recognition and significantly greater resources than us,
such as Nike and Adidas. We also compete with other manufacturers, including those specializing in outdoors
and tactical apparel, and private label offerings of certain retailers, including some of our customers.
In addition, purchasing decisions by retailers and their decisions regarding the limited use of floor space in
their stores means that we also must compete with others to develop relationships with retailers for their limited
attention. We believe we have been successful in this area because of the good relationships we have developed
and as a result of the strong sales of our products. However, if retailers earn greater margins from our
competitors’ products, they may favor the display and sale of those products.
We believe that we have been able to compete successfully because of our brand image and recognition, the
performance and quality of our products and our selective distribution policies. We also believe that our focused
gearline merchandising story differentiates us from our competition. In the future we expect to compete for
consumer preferences and expect that we may face greater competition on pricing, as well. This may favor larger
competitors with lower costs per unit of product produced that can spread the effect of price discounts across a
larger array of products and across a larger customer base than ours. The purchasing decisions of consumers for
our products also often reflect highly subjective preferences that can be influenced by many factors, including
advertising, media, product sponsorships, product improvements and changing styles.
Employees
As of December 31, 2005, we had 610 employees, of which 596 were employed in the United States. Of the
596 U.S. employees, 138 were employed in sales and marketing, 34 were employed in sourcing and production,
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