This excerpt taken from the DIS 10-K filed Dec 7, 2005.
Competition, Seasonality, and Intellectual Property Protection
The Company competes in its character merchandising and other licensing, publishing, interactive and retail activities with other licensors, publishers and retailers of character, brand and celebrity names. Although public information is limited, we believe the Company is the largest worldwide licensor of character-based merchandise and producer/distributor of childrens film-related products based on retail sales. Operating results for the licensing and retail distribution business are influenced by seasonal consumer purchasing behavior and by the timing and performance of animated theatrical releases.
The Companys licensing businesses, as well as its media networks, studio entertainment and theme park and resort operations, are affected by the Companys ability to exploit and protect its intellectual property, including trademarks, trade names, copyrights, patents and trade secrets, throughout the world. As a result, domestic and foreign laws protecting intellectual property rights
are important to the Company. The right and ability to enforce intellectual property rights against infringement are essential to the Companys businesses. These businesses are also subject to the risk of challenges by third parties claiming infringement of their proprietary rights. Regardless of their validity, such claims may result in substantial costs and diversion of resources which could have an adverse effect on the Companys licensing operations.