GE 2015 Annual Report Download - page 145

RISK FACTORS
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Intellectual property - Our intellectual property portfolio may not prevent competitors from independently developing
products and services similar to or duplicative to ours.
Our patents and other intellectual property may not prevent competitors from independently developing or selling products and services
similar to or duplicative of ours, and there can be no assurance that the resources invested by us to protect our intellectual property will
be sufficient or that our intellectual property portfolio will adequately deter misappropriation or improper use of our technology. We could
also face competition in some countries where we have not invested in an intellectual property portfolio. We also face attempts to gain
unauthorized access to our IT systems or products for the purpose of improperly acquiring our trade secrets or confidential business
information. The theft or unauthorized use or publication of our trade secrets and other confidential business information as a result of
such an incident could adversely affect our competitive position and the value of our investment in research and development. We may
be unable to secure or retain ownership or rights to use data in certain software analytics or services offerings. In addition, we may be
the target of aggressive and opportunistic enforcement of patents by third parties, including non-practicing entities. Regardless of the
merit of such claims, responding to infringement claims can be expensive and time-consuming. If GE is found to infringe any third-party
rights, we could be required to pay substantial damages or we could be enjoined from offering some of our products and services. Also,
there can be no assurances that we will be able to obtain or renew from third parties the licenses we need in the future, and there is no
assurance that such licenses can be obtained on reasonable terms.
OPERATIONAL RISKS
Operational risk relates to risks arising from systems, processes, people and external events that affect the operation of our
businesses. It includes product life cycle and execution; product safety and performance; information management and data protection
and security, including cyber security; supply chain and business disruption; and other risks, including human resources and reputation.
Operations - We may face operational challenges that could have a material adverse effect on our business, reputation,
financial position and results of operations, and we are dependent on maintenance of existing product lines, market
acceptance of new product and service introductions and product and service innovations for continued revenue and
earnings growth.
We produce highly sophisticated products and provide specialized services for both our and third-party products that incorporate or use
leading-edge technology, including both hardware and software. While we have built extensive operational processes to ensure that our
product design, manufacture and servicing, and other services that we provide, meet the most rigorous quality standards, there can be
no assurance that we or our customers or other third parties will not experience operational process failures or other problems,
including through cyber attacks and other intentional acts, that could result in potential product, safety, regulatory or environmental
risks. Despite the existence of crisis management or business continuity plans, operational failures or quality issues, including as a
result of organizational changes, attrition or labor relations, could have a material adverse effect on our business, reputation, financial
position and results of operations. For projects where we take on the full scope of engineering, procurement, construction or other
services, the potential risk is greater that operational, quality or other issues at particular projects could adversely affect *(¶V results of
operations. In addition, the markets in which we operate are subject to technological change and require skilled talent. Our long-term
operating results depend substantially upon our ability to continually develop, introduce, and market new and innovative products and
services, to modify existing products and services, to customize products and services, to respond to technological change and to
deliver products, services and outcomes in line with our projected performance and/or cost estimates.
Cybersecurity - Increased cybersecurity requirements, vulnerabilities, threats and more sophisticated and targeted computer
crime could pose a risk to our systems, networks, products, solutions, services and data.
Increased global cybersecurity vulnerabilities, threats and more sophisticated and targeted cyber-related attacks pose a risk to the
security of *(¶V and its FXVWRPHUV¶ SDUWQHUV¶ VXSSOLHUV¶ and third-party service SURYLGHUV¶ products, systems and networks and the
confidentiality, availability and integrity of *(¶V and its FXVWRPHUV¶ data. While we attempt to mitigate these risks by employing a number
of measures, including employee training, monitoring and testing, and maintenance of protective systems and contingency plans, we
remain potentially vulnerable to additional known or unknown threats. We also may have access to sensitive, confidential or personal
data or information in certain of our businesses that is subject to privacy and security laws, regulations and customer-imposed controls.
Despite our efforts to protect sensitive, confidential or personal data or information, we may be vulnerable to material security breaches,
theft, misplaced or lost data, programming errors, employee errors and/or malfeasance that could potentially lead to the compromising
of sensitive, confidential or personal data or information, improper use of our systems, software solutions or networks, unauthorized
access, use, disclosure, modification or destruction of information, defective products, production downtimes and operational
disruptions. In addition, a cyber-related attack could result in other negative consequences, including damage to our reputation or
competitiveness, remediation or increased protection costs, litigation or regulatory action.
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