WebEx 2002 Annual Report Download - page 11

routinely require our employees, customers and potential business distribution partners to enter into
confidentiality and nondisclosure agreements before we will disclose any confidential aspects of our services,
technology or business plans. In addition, we require all employees, and those consultants involved in the
deployment of our services, to agree to assign to us any proprietary information, inventions or other intellectual
property they generate, or come to possess, while employed by us. Despite our efforts to protect our proprietary
rights, unauthorized parties may attempt to copy or otherwise obtain and use our services or technology. These
precautions may not prevent misappropriation or infringement of our intellectual property.
Third parties may infringe or misappropriate our copyrights, trademarks and similar proprietary rights. In
addition, we may be subject to claims of alleged infringement of patents and other intellectual property rights of
third parties. We may be unaware of filed patent applications which have not yet been made public and which
relate to our services. From time to time we receive notices alleging that we infringe intellectual property rights
of third parties. In such cases, we typically investigate and respond to the allegations. We are currently not aware
of any such allegations that we believe represent a risk of material liability to us.
In addition, in July 2002, a lawsuit was filed by Eric Hamilton, an individual, in U.S. District Court for the
District of Maryland alleging infringement of U.S. patent number 5,176,520 (the “Hamilton Patent”) against us
and several other companies. In March 2003, we entered into a settlement agreement with the plaintiff pursuant
to which the plaintiff released us from all claims asserted in the lawsuit and agreed to dismiss the lawsuit with
prejudice. Although this lawsuit was settled, other intellectual property claims may be asserted against us in the
future. Intellectual property litigation is expensive and time-consuming and could divert management’s attention
away from running our business. Intellectual property litigation could also require us to develop non-infringing
technology or enter into royalty or license agreements. These royalty or license agreements, if required, may not
be available on acceptable terms, if at all. Our failure or inability to develop non-infringing technology or license
the proprietary rights on a timely basis would harm our business.
Employees
As of December 31, 2002, we had 639 full-time employees, including 122 in research and development,
315 in sales and marketing, 142 in set-up, support and training, and 60 in general and administrative. None of our
employees are covered by collective bargaining agreements. In February 2003, our subsidiary in China hired
approximately 325 additional employees engaged in research and development. We believe our relations with our
employees are good.
Available Information
Our website is located at http://www.webex.com. We make available, free of charge, on or through our
website, our annual, quarterly and current reports, and any amendments to those reports, as soon as reasonably
practicable after electronically filing such reports with the Securities and Exchange Commission.
Item 2. Properties
We currently lease approximately 126,000 square feet in three buildings in San Jose, California, which are
used for sales, engineering, support, network operations, and general corporate functions, including our corporate
headquarters. The lease terms for two of these buildings expire in September 2004, and for the third building in
February 2008. Of the 126,000 square feet, 19,300 square feet have been sub-leased under a non-cancelable sub-
lease that expires in July 2004, although the sub-lessee is currently delinquent as to a portion of the payments
owing under the sublease. We are also leasing approximately 32,000 square feet of space in Sacramento,
California, which is used for sales and support activities. We also have leased facilities in Atlanta, Denver,
Raleigh, Chicago, Amsterdam, Melbourne and Tokyo. The lease terms range from June 2004 to February 2008.
As a result of our acquisition in February 2003 of substantially all of the assets of three companies in China, we
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