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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 children’s 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 Company’s licensing businesses, as well as its media networks, studio entertainment and theme park and resort operations, are affected by the Company’s 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 -20-
are important to the Company. The right and
ability to enforce intellectual property rights against
infringement are essential to the Company’s 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 Company’s licensing operations.
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