iRobot 2012 Annual Report Download - page 59

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companies have developed or are developing robots that will compete directly with our product offerings, and many of our
competitors have significantly more financial and other resources than we possess.
Our competitors include developers of robot floor cleaning products, developers of small unmanned ground vehicles and
established government contractors working on unmanned systems.
While we believe many of our customers purchase our Roomba floor vacuuming robots, Mint floor cleaning and Scooba
floor washing robots as a supplement to, rather than a replacement for, their traditional vacuum cleaners and wet floor cleaning
methods, we do compete in some cases with providers of traditional cleaning products.
We believe that the principal competitive factors in the market for robots include product features, performance for the
intended mission, cost of purchase, total cost of system operation, including maintenance and support, ease of use, integration
with existing equipment, quality, reliability, customer support, brand and reputation.
Our ability to remain competitive will depend to a great extent upon our ongoing performance in the areas of product
development and customer support. We cannot provide assurance that our products will continue to compete favorably or that
we will be successful in the face of increasing competition from new products and enhancements introduced by existing
competitors or new companies entering the markets in which we provide products.
Intellectual Property
We believe that our continued success depends in large part on our proprietary technology, the intellectual skills of our
employees and the ability of our employees to continue to innovate. We rely on a combination of patent, copyright, trademark
and trade secret laws, as well as confidentiality agreements, to establish and protect our proprietary rights.
As of December 29, 2012, we held 164 U.S. patents, 132 foreign patents, additional design registrations, and more than
300 patent applications pending worldwide. Our U.S. patents will begin to expire in 2019. We will continue to file and
prosecute patent (or design registration, as applicable) applications when and where appropriate to attempt to protect our rights
in our proprietary technologies. We also encourage our employees to continue to invent and develop new technologies so as to
maintain our competitiveness in the marketplace. It is possible that our current patents, or patents which we may later acquire,
may be successfully challenged or invalidated in whole or in part. It is also possible that we may not obtain issued patents for
our pending patent applications or other inventions we seek to protect. In that regard, we sometimes permit certain intellectual
property to lapse or go abandoned under appropriate circumstances and due to uncertainties inherent in prosecuting patent
applications, sometimes patent applications are rejected and we subsequently abandon them. It is also possible that we may not
develop proprietary products or technologies in the future that are patentable, or that any patent issued to us may not provide us
with any competitive advantages, or that the patents of others will harm or altogether preclude our ability to do business.
Our registered U.S. trademarks include iRobot, Roomba, Scooba, Mint, ViPR, NorthStar, iRobot Dirt Dog, Create,
PackBot, FirstLook, iAdapt, FasTac, Aware, Home Base, Looj, Verro, Virtual Wall, and Warrior. Our marks iRobot, Roomba,
Scooba, and certain other trademarks, have also been registered in selected foreign countries.
Our means of protecting our proprietary rights may not be adequate and our competitors may independently develop
technology that is similar to ours. Legal protections afford only limited protection for our technology. The laws of many
countries do not protect our proprietary rights to as great an extent as do the laws of the United States. Despite our efforts to
protect our proprietary rights, unauthorized parties have in the past attempted, and may in the future attempt, to copy aspects of
our products or to obtain and use information that we regard as proprietary. Third parties may also design around our
proprietary rights, which may render our protected products less valuable, if the design around is favorably received in the
marketplace. In addition, if any of our products or the technology underlying our products is covered by third-party patents or
other intellectual property rights, we could be subject to various legal actions. We cannot assure you that our products do not
infringe patents held by others or that they will not in the future. We have received in the past communications from third
parties relating to technologies used in our various robot products that have alleged infringement of patents or violation of other
intellectual property rights. In response to these communications, we have contacted these third parties to convey our good
faith belief that we do not infringe the patents in question or otherwise violate those parties' rights. Although there have been no
additional actions or communications with respect to these allegations, we cannot assure you that we will not receive further
correspondence from these parties, or not be subject to additional allegations of infringement from others. Litigation may be
necessary to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the
proprietary rights of others, or to defend against claims of infringement or invalidity, misappropriation, or other claims. Any
such litigation could result in substantial costs and diversion of our resources. Moreover, any settlement of or adverse judgment
resulting from such litigation could require us to obtain a license to continue to use the technology that is the subject of the
claim, or otherwise restrict or prohibit our use of the technology. Any required licenses may not be available to us on
acceptable terms, if at all. If we attempt to design around the technology at issue or to find another provider of suitable
alternative technology to permit us to continue offering applicable software or product solutions, our continued supply of
software or product solutions could be disrupted or our introduction of new or enhanced software or products could be
significantly delayed.
Regulations
Form 10-K