Symantec 1999 Annual Report Download - page 45

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We are involved in litigation which could, and any future litigation may, affect our financial results. From time
to time, we may be subject to claims that we have infringed the intellectual property rights of others, that our products
are not Year 2000 compliant or other product liability claims, or other claims incidental to our business. We are
involved in a number of judicial and administrative proceedings incidental to our business. For a more complete
discussion of our current litigation, see Note 16 of Notes to Consolidated Financial Statements in this Form 10-K. We
intend to defend and/or pursue all of these lawsuits vigorously. We may suffer an unfavorable outcome in one or more
of the cases. We do not expect the final resolution of these lawsuits to have a material adverse effect on our financial
position, individually or in the aggregate. However, depending on the amount and timing of unfavorable resolutions of
these lawsuits, our future results of operations or cash flows could be materially adversely affected in a particular
period.
Intellectual Property Litigation
We believe that software developers will become increasingly subject to claims of intellectual property infringement as
the number of software products in the industry increases and the functionality of these products further overlap. In
addition, an increasing number of patents are being issued that may apply to software. Allegations of patent
infringement are becoming increasingly common in the software industry. We are unable to ascertain all possible
patent infringement claims because:
• new patents are being issued continually;
• the subject of patent applications is confidential until a patent is issued; and
• when a patent has been issued, the potential applicability of the patent to a particular software product is not
apparent.
We have been involved in disputes claiming patent infringement in the past and are currently involved in a number of
patent disputes and litigation. We believe we, like other companies that obtain some of their products through
publishing agreements or acquisitions, face potentially greater risks of infringement claims since we have less direct
control over the development of those products. Although infringement claims may ultimately prove to be without
merit, they are expensive to defend and may consume our resources or divert our attention from day-to-day operations.
If a third party alleges that we have infringed their intellectual property rights, we may choose to litigate the claim
and/or seek an appropriate license from the third party. If we engage in litigation and the third party is found to have a
valid patent claim against us and a license is not available on reasonable terms, our business, operating results and
financial condition may be materially adversely affected.
Year 2000 – Product Liability Litigation
We believe the software products that we currently develop and actively market are Year 2000 compliant for
significantly all functionality. However, these products could contain errors or defects related to the Year 2000. In
addition, earlier versions of our products, those that are not the most currently released or are not currently being
developed, may not be Year 2000 compliant. We have sold some of our older product lines, which are not being
actively developed and updated. These older products are also not necessarily Year 2000 compliant and will no longer
be sold after June 29, 1999.
We are currently party to a lawsuit related to the alleged inability of pre-version 4.0 Norton AntiVirus products to
function properly in respect to Year 2000. We believe that this lawsuit has no merit and we intend to defend against
this claim vigorously. We do not expect the final resolution of this lawsuit to have a material adverse affect on the
results of operations and financial condition of the Company. However, depending on the amount and timing of an
unfavorable resolution of this lawsuit, our future results of operations or cash flows could be materially adversely
affected in a particular period.