Seasonality
See Risk Factors Because our operating results for any period could be adversely affected by a number of factors and therefore
fluctuate significantly, our annual and quarterly operating results are difficult to predict in Item 3 above and Operating and Financial Review and Prospects Principal Factors Affecting Our Results of Operations in
Item 5 below.
Intellectual Property
Our success and future revenue growth depends, in part, on our ability to protect our intellectual property. We rely on a portfolio of
intellectual property rights, registered in the United States, Taiwan, and other countries, including patents, copyrights, trademark registrations, trade secret laws, contractual provisions, licenses, and other methods to protect our intellectual
property.
As of March 31, 2018, we have 1,202 patents and 888 pending applications worldwide. There can be no assurance that
patents will ever be issued with respect to these pending applications. Furthermore, it is possible that any patents held by us may be invalidated, circumvented, challenged or licensed to others. In addition, there can be no assurance that such
patents will provide us with competitive advantages or adequately safeguard our proprietary rights. While we continue to file new patent applications with respect to our recent developments, existing patents are granted for prescribed time periods
and will expire at various times in the future. We expect to continue to file patent applications where appropriate to protect our proprietary technologies.
Companies in the semiconductor industry have frequently demonstrated a readiness to commence litigation based on allegations of patent and
other intellectual property infringement. From time to time, third parties may assert infringement claims against us. We may not prevail in any such litigation or may not be able to license patents from third parties on commercially reasonable
terms, if at all. Litigation, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our managements time. Any such litigation could materially adversely affect us. In addition, in the
contracts under which we sell semiconductor products, we may have agreed to indemnify our customers against losses arising out of claims of unauthorized use of intellectual property.
We intend to protect our intellectual property rights vigorously, but there can be no assurance that our efforts will be successful. In
addition, the laws of other countries in which our products are sold may not protect our products and intellectual property rights to the same extent as the laws of the United States.
While our ability to effectively compete depends in large part on our ability to protect our intellectual property, we believe that our
technical expertise, customer support capabilities, and ability to introduce new products in a timely and cost effective manner will be important factors in maintaining our competitive position.
We claim copyright and trademark protection for proprietary documentation for our products and a variety of branding marks. We have registered
Silicon Motion and its logo (a three-dimensional cube depiction of the letters SM), FCI, the FCI logo, the Shannon Systems logo, PCIe-RAID,
DIRECT-IO,
Hyper-IO,
airRF, basicRF, ezRF, ezSYS, powerRF, twinRF, zipRF, zipSYS, VirtualZero,
SSDLifeGuard, SSDLifeSaver, TurboMLC, FerriSSD, Ferri-eMMC, Bigtera, the Bigtera logo, the CAT logo, and NANDXtend as trademarks in the United States, Taiwan, and
other countries.
We also attempt to protect our trade secrets and other proprietary information through agreements with our customers,
suppliers, employees and consultants, and through other customary security measures.
We have entered into license agreements with third
party intellectual property vendors for wafer fabrication tool libraries, semiconductor IP core, computer aided design tools, and software.
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