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Our reliance on intellectual property and other proprietary information subjects us to the risk that these key ingredients of our
business could be copied by competitors.
Our success depends, in significant part, on the proprietary nature of our technology, including non-patentable
intellectual property such as our process technology. If a competitor is able to reproduce or otherwise capitalize on our
technology despite the safeguards we have in place, it may be difficult, expensive or impossible for us to obtain neces-
sary legal protection. Also, the laws of some foreign countries may not protect our intellectual property to the same
extent as do U.S. laws. In addition to patent protection of intellectual property rights, we consider elements of our
product designs and processes to be proprietary and confidential. We rely upon employee, consultant and vendor non-
disclosure agreements and contractual provisions and a system of internal safeguards to protect our proprietary
information. However, any of our registered or unregistered intellectual property rights may be challenged or
exploited by others in the industry, which might harm our operating results.
The costs of compliance with state, federal and international legal and regulatory requirements, such as environmental, labor,
trade and tax regulations, and customers' standards of corporate citizenship could cause an increase in our operating costs.
We are subject to, and may become subject to additional, state, federal and international laws and regulations
governing our environmental, labor, trade and tax practices. These laws and regulations, particularly those applicable
to our international operations, are or may be complex, extensive and subject to change. We will need to ensure that
we and our component suppliers timely comply with such laws and regulations, which may result in an increase in our
operating costs. For example, in August 2012, the Securities and Exchange Commission adopted final rules to imple-
ment Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act intended to improve trans-
parency and accountability concerning the supply of minerals originating from the conflict zones of the Democratic
Republic of Congo or adjoining countries, which obligates us to conduct a reasonable country of origin inquiry with
respect to conflict minerals included in components of products we directly manufacture, contract to manufacture and
purchase to include in products. Other legislation has been, and may in the future be, enacted in other locations where
we manufacture or sell our products. In addition, climate change and financial reform legislation in the United States
is a significant topic of discussion and has generated and may continue to generate federal or other regulatory
responses in the near future. If we or our component suppliers fail to timely comply with applicable legislation, our
customers may refuse to purchase our products or we may face increased operating costs as a result of taxes, fines or
penalties, which would have a materially adverse effect on our business, financial condition and operating results.
In connection with our compliance with such environmental laws and regulations, as well as our compliance with
industry environmental initiatives, the standards of business conduct required by some of our customers, and our
commitment to sound corporate citizenship in all aspects of our business, we could incur substantial compliance and
operating costs and be subject to disruptions to our operations and logistics. In addition, if we were found to be in
violation of these laws or noncompliant with these initiatives or standards of conduct, we could be subject to gov-
ernmental fines, liability to our customers and damage to our reputation and corporate brand which could cause our
financial condition or operating results to suffer.
Violation of applicable laws, including labor or environmental laws, and certain other practices by our suppliers or customers
could harm our business.
We expect our suppliers and customers to operate in compliance with applicable laws and regulations, including
labor and environmental laws, and to otherwise meet our required standards of conduct. While our internal operating
guidelines promote ethical business practices, we do not control our suppliers or customers or their labor or environ-
mental practices. The violation of labor, environmental or other laws by any of our suppliers or customers, or
divergence of a supplier's or customer's business practices from those generally accepted as ethical, could harm our
business by:
interrupting or otherwise disrupting the shipment of our product components;
damaging our reputation;
forcing us to find alternate component sources;