EFTA01377982.pdf

through the use of one of our products. If one or more of our users suffers or alleges to have suffered any such harm, we could experience negative publicity or legal action that could damage our reputation and our brands. Similar events affecting users of our competitors' dating products could result in negative publicity for the dating industry generally. which could in turn negatively affect our business. Concerns about such harms and the use of dating products and social networking platforms for illegal conduct. such as romance scams and financial fraud. could produce future legislation or other governmental action that could require changes to our dating products, restrict or impose additional costs upon the conduct of our business generally or cause users to abandon our dating products. We may fall to adequately protect our intellectual property rights or may be accused of infringing the intellectual property rights of third parties. We rely heavily upon our trademarks and related domain names and logos to market our brands and to build and maintain brand loyalty and recognition, as well as upon trade secrets. We also rely, to a lesser extent, upon patented and patent-pending propnetary technologies relating to matching process systems and related features and products. We also rely on a combination of laws, and contractual restrictions with employees, customers, suppliers, affiliates and others, to establish and protect our various intellectual property rights. For example, we have generally registered and continue to apply to register and renew, or secure by contract where appropriate, trademarks and service marks as they are developed and used. and reserve, register and renew domain names as we deem appropriate. Effective trademark protection may not be available or may not be sought in every country in which our products are made available and contractual disputes may affect the use of marks governed by private contract. Similarly, not every variation of a domain name may be available or be registered, even if available. We also generally seek to apply for patents or for other similar statutory protections as and if we deem appropriate, based on then-current facts and circumstances, and will continue to do so in the future. No assurances can be given that any patent application we have filed or will file will result in a patent being issued, or that any existing or future patents will afford adequate protection against competitors and similar technologies. In addition, no assurances can be given that third parties will not create new products or methods that achieve similar results without infringing upon patents we own. Despite these measures. our intellectual property rights may still not be protected in a meaningful manner. challenges to contractual rights could arise or third parties could copy or otherwise obtain and use our intellectual property without authorization. The occurrence of any of these events could result in the erosion of our brands and limit our ability to market our brands using our various domain names. as well as impede our ability to effectively compete against competitors with similar technologies, any of which could adversely affect our business. financial condition and results of operations. 23 Table of Contents. From time to time, we have been subject to legal proceedings and claims, including claims of alleged infringement of trademarks, copyrights, patents and other intellectual property rights held by third parties. In addition, litigation may be necessary in the future to enforce our intellectual properly rights, protect our trade secrets or to determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources. any of which could adversely affect our business. finanaal condition and results of operations. We operate in various International markets, Including certain markets in which we have limited experience. As a result, we lace additional risks in connection with certain of our international operations. Our brands are available in over 190 countries. Our international revenue represented 35% and 31% of our total revenue for the fiscal year ended December 31. 2014 and nine months ended September 30. 2015. respectively. Operating internationally, particularly in countries in which we have limited experience, exposes us to a number of additional risks, including: operational and compliance challenges caused by distance, language and cultural differences; difficulties in staffing and managing international operations; differing levels of social and technological acceptance of our dating products or lack of acceptance of them generally; foreign currency fluctuations; restrictions on the transfer of funds among countries and back to the United States and costs associated with repatriating funds to the United States: differing and potentially adverse tax laws; multiple, conflicting and changing laws, rules and regulations. and difficulties understanding and ensuring compliance with those laws by both our employees and our business partners. over Mom we exert no control: competitive environments that favor local businesses, limitations on the level of intellectual property protection; and trade sanctions, political unrest. terrorism. war and epidemics or the threat of any of these events. The occurrence of any or all of the events described above could adversely affect our international operations, which could in turn adversely affect our business, financial condition and results of operations. We may experience operational and financial risks in connection with acquisitions. hrip: yds.". tec.gov An:la eakdgn daW1575189O/0104746915006431 3222645Rn-IalfintiI 1,9,2013 911:17 Ahfl CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0075142 CONFIDENTIAL SONY GM_00221326 EFTA01377982