eBay 2007 Annual Report Download - page 47

similar programs may harm the performance of the Internet. The backbone computers of the Internet have been the
targets of such programs. The Internet has experienced a variety of outages and other delays as a result of damage to
portions of its infrastructure, and it could face outages and delays in the future. These outages and delays could
reduce the level of Internet usage generally as well as the level of usage of our services.
We may be unable to protect or enforce our own intellectual property rights adequately.
We regard the protection of our trademarks, copyrights, patents, domain names, trade dress, and trade secrets
as critical to our success. We aggressively protect our intellectual property rights by relying on a federal, state and
common law rights, as well as a variety of administrative procedures. We also rely on contractual restrictions to
protect our proprietary rights in products and services. We have entered into confidentiality and invention
assignment agreements with our employees and contractors, and confidentiality agreements with parties with
whom we conduct business in order to limit access to and disclosure of our proprietary information. These
contractual arrangements and the other steps we have taken to protect our intellectual property may not prevent
misappropriation of our technology or deter independent development of similar technologies by others. We pursue
the registration of our domain names, trademarks, and service marks in the U.S. and internationally. Effective
trademark, copyright, patent, domain name, trade dress, and trade secret protection is very expensive to maintain
and may require litigation. We must protect our trademarks, patents, and domain names in an increasing number of
jurisdictions, a process that is expensive and may not be successful in every location. For example, Skype is in the
process of applying to register the Skype name as a trademark worldwide. In the EU, Skype’s application is being
opposed. If these oppositions to Skype’s applications were to be successful, Skype’s ability to protect its brand
against third-party infringers would be compromised. We have licensed in the past, and expect to license in the
future, certain of our proprietary rights, such as trademarks or copyrighted material, to others. These licensees may
take actions that diminish the value of our proprietary rights or harm our reputation.
We are subject to the risks of owning real property.
We own real property, including land and buildings related to our operations. We have little experience in
managing real property. Ownership of this property subjects us to risks, including:
• the possibility of environmental contamination and the costs associated with fixing any environmental
problems;
• adverse changes in the value of these properties, due to interest rate changes, changes in the neighborhoods
in which the properties are located, or other factors;
• the possible need for structural improvements in order to comply with zoning, seismic, disability act, or other
requirements; and
• possible disputes with tenants, neighboring owners, or others.
Some anti-takeover provisions may affect the price of our common stock.
Our Board of Directors has the authority to issue up to 10,000,000 shares of preferred stock and to determine
the preferences, rights and privileges of those shares without any further vote or action by the stockholders. The
rights of the holders of common stock may be harmed by rights granted to the holders of any preferred stock that
may be issued in the future. Some provisions of our certificate of incorporation and bylaws could have the effect of
making it more difficult for a potential acquirer to acquire a majority of our outstanding voting stock. These include
provisions that provide for a classified board of directors, prohibit stockholders from taking action by written
consent and restrict the ability of stockholders to call special meetings. We are also subject to provisions of
Delaware law that prohibit us from engaging in any business combination with any interested stockholder for a
period of three years from the date the person became an interested stockholder, unless certain conditions are met.
This restriction could have the effect of delaying or preventing a change of control.
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