Yahoo 2010 Annual Report Download - page 19

We believe that these parties will continue to take steps to protect these technologies, including, but not limited
to, seeking patent protection. In addition, patent holding companies may continue to seek to monetize patents
they have purchased or otherwise obtained. As a result, disputes regarding the ownership of technologies and
rights associated with online businesses are likely to continue to arise in the future. From time to time, parties
assert patent infringement claims against us. Currently, we are engaged in a number of lawsuits regarding patent
issues and have been notified of a number of other potential disputes.
In addition to patent claims, third parties have asserted, and are likely in the future to assert, claims against us
alleging infringement of copyrights, trademark rights, trade secret rights or other proprietary rights, or alleging
unfair competition, violation of federal or state statutes or other claims, including alleged violation of
international statutory and common law. In addition, third parties have made, and may continue to make,
infringement and related claims against us over the display of content or search results triggered by search terms
that include trademark terms. Currently, we are engaged in lawsuits regarding such trademark issues.
As we expand our business and develop new technologies, products and services, we may become increasingly
subject to intellectual property infringement claims. In the event that there is a determination that we have
infringed third-party proprietary rights such as patents, copyrights, trademark rights, trade secret rights, or other
third-party rights such as publicity and privacy rights, we could incur substantial monetary liability, be required
to enter into costly royalty or licensing agreements or be prevented from using such rights, which could require
us to change our business practices in the future and limit our ability to compete effectively. We may also incur
substantial expenses in defending against third-party infringement claims regardless of the merit of such claims.
In addition, many of our agreements with our customers or Affiliates require us to indemnify them for some
types of third-party intellectual property infringement claims, which could increase our costs in defending such
claims and our damages. The occurrence of any of these results could harm our brands and negatively impact our
operating results.
We are subject to a variety of new and existing U.S. and foreign government laws and regulations which could
subject us to claims, judgments, monetary liabilities and other remedies, and limitations on our business
practices.
We are subject to regulations and laws directly applicable to providers of Internet, mobile, and voice over
Internet protocol, or VOIP, services both domestically and internationally. The application of existing domestic
and international laws and regulations to us relating to issues such as user privacy and data protection,
defamation, pricing, advertising, taxation, gambling, sweepstakes, promotions, billing, real estate, consumer
protection, accessibility, content regulation, quality of services, telecommunications, mobile, television, and
intellectual property ownership and infringement in many instances is unclear or unsettled. In addition, we will
also be subject to any new laws and regulations directly applicable to our domestic and international activities.
Further, the application of existing laws to us or our subsidiaries regulating or requiring licenses for certain
businesses of our advertisers including, for example, distribution of pharmaceuticals, alcohol, adult content,
tobacco, or firearms, as well as insurance and securities brokerage, and legal services, can be unclear.
Internationally, we may also be subject to laws regulating our activities in foreign countries and to foreign laws
and regulations that are inconsistent from country to country. We may incur substantial liabilities for expenses
necessary to defend such litigation or to comply with these laws and regulations, as well as potential substantial
penalties for any failure to comply. Compliance with these laws and regulations may also cause us to change or
limit our business practices in a manner adverse to our business.
A number of U.S. federal laws, including those referenced below, impact our business. The Digital Millennium
Copyright Act (“DMCA”) is intended, in part, to limit the liability of eligible online service providers for listing
or linking to third-party Websites that include materials that infringe copyrights or other rights of others. Portions
of the Communications Decency Act (“CDA”) are intended to provide statutory protections to online service
providers who distribute third-party content. We rely on the protections provided by both the DMCA and the
CDA in conducting our business. If these laws or judicial interpretations are changed to narrow their protections,
or if international jurisdictions refuse to apply similar provisions in foreign lawsuits, we will be subject to greater
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