Intel 2009 Annual Report Download - page 23

Table of Contents
Costs related to product defects and errata may harm our results of operations and business.
Costs associated with unexpected product defects and errata (deviations from published specifications) due to, for example,
unanticipated problems in our manufacturing processes, include:
These costs could be substantial and may therefore increase our expenses and lower our gross margin. In addition, our
reputation with our customers or users of our products could be damaged as a result of such product defects and errata, and the
demand for our products could be reduced. These factors could harm our financial results and the prospects for our business.
We may be subject to claims of infringement of third-party intellectual property rights, which could harm our business.
Third parties may assert against us or our customers alleged patent, copyright, trademark, or other intellectual property rights
to technologies that are important to our business. As described in “Note 28: Contingencies” in Part II, Item 8 of this Form
10-K, we are currently engaged in a number of litigation matters involving intellectual property rights. We may be subject to
intellectual property infringement claims from certain individuals and companies who have acquired patent portfolios for the
sole purpose of asserting such claims against other companies. Any claims that our products or processes infringe the
intellectual property rights of others, regardless of the merit or resolution of such claims, could cause us to incur significant
costs in responding to, defending, and resolving such claims, and may divert the efforts and attention of our management and
technical personnel from our business. As a result of such intellectual property infringement claims, we could be required or
otherwise decide that it is appropriate to:
The occurrence of any of the foregoing could result in unexpected expenses or require us to recognize an impairment of our
assets, which would reduce the value of our assets and increase expenses. In addition, if we alter or discontinue our production
of affected items, our revenue could be harmed.
We may not be able to enforce or protect our intellectual property rights, which may harm our ability to compete and harm
our business.
Our ability to enforce our patents, copyrights, software licenses, and other intellectual property rights is subject to general
litigation risks, as well as uncertainty as to the enforceability of our intellectual property rights in various countries. When we
seek to enforce our rights, we are often subject to claims that the intellectual property right is invalid, is otherwise not
enforceable, or is licensed to the party against whom we are asserting a claim. In addition, our assertion of intellectual property
rights often results in the other party seeking to assert alleged intellectual property rights of its own or assert other claims
against us, which could harm our business. If we are not ultimately successful in defending ourselves against these claims in
litigation, we may not be able to sell a particular product or family of products due to an injunction, or we may have to pay
damages that could, in turn, harm our results of operations. In addition, governments may adopt regulations, and governments
or courts may render decisions, requiring compulsory licensing of intellectual property to others, or governments may require
that products meet specified standards that serve to favor local companies. Our inability to enforce our intellectual property
rights under these circumstances may harm our competitive position and our business.
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writing off the value of inventory of defective products;
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disposing of defective products that cannot be fixed;
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recalling defective products that have been shipped to customers;
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providing product replacements for, or modifications to, defective products; and/or
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defending against litigation related to defective products.
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pay third
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party infringement claims;
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discontinue manufacturing, using, or selling particular products subject to infringement claims;
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discontinue using the technology or processes subject to infringement claims;
• develop other technology not subject to infringement claims, which could be time-consuming and costly or may not be
possible; and/or
• license technology from the third party claiming infringement, which license may not be available on commercially
reasonable terms.