| ISCO INTERNATIONAL INC Item 1A Risk Factors The following factors, in addition to other information contained herein, should be considered carefully in evaluating us and our business |
| RISKS RELATED TO THE OPERATIONS AND FINANCING OF THE COMPANY We have a history of losses that raises doubts about our ability to continue as a going concern We were founded in October 1989 and through 1996 we were engaged principally in research and development, product testing, manufacturing, marketing and sales activities |
| Since 1996, we have been actively selling products to the marketplace and we continue to develop new products for sale |
| As of December 31, 2005, the accumulated deficit was approximately dlra160 million |
| We have only recently begun to generate revenues from the sale of our ANF and RF² products |
| Accordingly, although we showed a substantial improvement in revenue and net result in 2005 and we have indicated the expectation of continued improvement during 2006, it is nonetheless possible that we may continue to experience net losses and cannot be certain if or when we will become profitable |
| These conditions raise substantial doubt about our ability to continue as a going concern |
| The accompanying consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments relating to the recoverability of reported assets or liabilities should we be unable to continue as a going concern |
| If we fail to obtain necessary funds for our operations, we may be unable to maintain or improve on our technology position and unable to develop and commercialize our products To date, we have financed our operations primarily through public and private equity and debt financings, and most recently through several financings with affiliates of our two largest shareholders |
| We believe that we have sufficient funds to operate our business as it was managed during 2005 through 2006 |
| However, we project increases in working capital requirements in order to pursue significant business opportunities during 2006 and beyond, and also expect to spend additional financial resources in the expansion of our business and product offering |
| As such, we may require additional capital during the second half of 2006 |
| We intend to look into augmenting our existing capital position by continuing to evaluate potential short-term and long-term sources of capital whether from debt, equity, hybrid, or other methods |
| The primary covenant in our existing debt arrangement involves the right of the lenders to receive debt repayment from the proceeds of new financing activities |
| This covenant may restrict our ability to apply the proceeds of a financing event toward operations until the debt is repaid in full |
| Our continued existence is therefore dependent upon our continued ability to raise funds through the issuance of our equity securities or borrowings |
| Our plans in this regard are to obtain other debt and equity financing until such time as profitable operation and positive cash flow are achieved and maintained |
| Although we believe, based on the fact that we have raised funds through sales of common stock and from borrowings over the past several years, that we will be able to secure suitable additional financing for our operations, there can be no guarantee that such financing will continue to be available on reasonable terms, or at all |
| The actual amount of future funding requirements will depend on many factors, including: the amount and timing of future revenues, the level of product marketing and sales efforts to support our commercialization plans, the magnitude of research and product development programs, the ability to improve or maintain product margins, and the costs involved in protecting patents or other intellectual property |
| We have limited experience in manufacturing, sales and marketing and dependence on third party manufacturers For us to be financially successful, we must either manufacture our products in substantial quantities, at acceptable costs and on a timely basis or enter into an outsourcing arrangement with a qualified manufacturer that will allow us the same |
| Currently, our manufacturing requirements are met by third party contract manufacturers |
| The efficient operation of our business will depend, in part, on our ability to have these and other companies manufacture our products in a timely manner, cost–effectively and in sufficient volumes while maintaining the required quality |
| Any manufacturing disruption could impair our ability to fulfill orders and could cause us to lose customers |
| In the event that we are unable to enter into a manufacturing arrangement on acceptable terms with a qualified manufacturer, we would have to produce our products in commercial quantities in our own facilities |
| Although to date we have produced limited quantities of our products for commercial installations and for use in development and customer field trial programs, production of large quantities of our products at competitive costs presents a number of technological and engineering challenges |
| We may be unable to manufacture such products in sufficient volume |
| We have limited experience in manufacturing, and substantial costs and expenses may be incurred in connection with attempts to manufacture larger quantities of our products |
| We may be unable to make the transition to large-scale commercial production successfully |
| We may be required to further develop our marketing and sales force in order to effectively demonstrate the advantages of our products over other products |
| We also may elect to enter into arrangements with third parties regarding the commercialization and marketing of our products |
| If we enter into such agreements or relationships, we would be substantially dependent upon the efforts of others in deriving commercial benefits from its our products |
| We may be unable to establish adequate sales and distribution capabilities, we may be unable to enter into marketing arrangements or relationships with third parties on financially acceptable terms, and any such third party may not be successful in marketing our products |
| There is no guarantee that our sales and marketing efforts will be successful |
| Management of our growth Growth may cause a significant strain on our management, operational, financial and other resources |
| The ability to manage growth effectively may require us to implement and improve our operational, financial, manufacturing and management information systems and expand, train, manage and motivate employees |
| These demands may require the addition of new management personnel and the development of additional expertise by management |
| Any increase in resources devoted to product development and marketing and sales efforts could have an adverse effect on financial performance in future fiscal quarters |
| If we were to receive substantial orders, we may have to expand current facilities, which could cause an additional strain on our management personnel and development resources |
| The failure of the management team to effectively manage growth could have a material adverse effect on our business, operating results and financial condition |
| RISKS RELATED TO OUR COMMON STOCK AND CHARTER PROVISIONS Volatility of common stock price The market price of our common stock, like that of many other high-technology companies, has fluctuated significantly and is likely to continue to fluctuate in the future |
| Since January 1, 1999 and through December 31, 2005, the closing price of our common stock has ranged from a low of dlra0dtta11 per share and high of dlra29dtta38 per share while the trading price generally ranged from a low of dlra0dtta10 per share to a high of dlra39dtta00 per share during this time |
| However, our common stock has not traded above dlra0dtta52 per share during 2005 |
| Announcements by us or others regarding the receipt of customer orders, quarterly variations in operating results, acquisitions or divestitures, additional equity or debt financings, results of customer field trials, scientific discoveries, technological innovations, litigation, product developments, patent or proprietary rights, government regulation and general market conditions may have a significant impact on the market price of our common stock |
| In addition, fluctuations in the price of our common stock could affect our ability to maintain the listing of our common stock on the American Stock Exchange |
| Risk of dilution As of December 31, 2005, we had outstanding options to purchase 8dtta1 million shares of common stock at a weighted average exercise price of dlra0dtta28 per share (1dtta0 million of which have not yet vested) issued to employees, directors and consultants pursuant to the 2003 Equity Incentive Plan and its predecessor 1993 Stock Option Plan, as amended, the merger agreement with Spectral Solutions, and individual agreements with management and directors |
| During December 2005, our shareholders voted to increase the number of shares reserved for issuance under the 2003 Equity Incentive Plan by 12 million, and clarified that shares allocated to the 1993 Stock Option Plan but were ultimately unused were to be available for use under the 2003 Equity Incentive Plan, up to a maximum of 5 million shares |
| In order to attract and retain key personnel, we may issue additional securities, including stock options and grants of restricted shares, in connection with or outside our company employee benefit plans, or may lower the price of existing stock options |
| The exercise of options and warrants for common stock and the issuance of additional shares of common stock and/or rights to purchase common stock at prices below market value would be dilutive to existing stockholders and may have an adverse effect on the market value of our common stock |
| Concentration of our stock ownership At the time of this filing, officers, directors and principal stockholders (holding greater than 5prca of outstanding shares) together control approximately 45prca of the outstanding voting power |
| Consequently, these stockholders, if they act together, would be able to exert significant influence over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions |
| In addition, this concentration of ownership may delay or prevent a change of control of us, even if such a change may be in the best interests of our stockholders |
| The interests of these stockholders may not always coincide with our interests or the interests of other stockholders |
| Accordingly, these stockholders could cause us to enter into transactions or agreements that we would not otherwise consider |
| Certain provisions in our charter documents have an anti-takeover effect In February 1996, our Board of Directors adopted a shareholders’ rights plan, commonly known as a poison pill, which had a potential “anti-takeover” effect in that the plan might have delayed, deferred or prevented a change of control of us |
| This plan expired in February 2006 |
| However, there exist certain other mechanisms that may delay, defer or prevent such a change of control |
| For instance, our Certificate of Incorporation and By-Laws provide that (i) our Board of Directors has authority to issue series of our preferred stock with such voting rights and other powers as the Board of Directors may determine and (ii) prior specified notice must be given by a stockholder making nominations to the Board of Directors or raising business matters at stockholders meetings |
| The effect of the anti-takeover provisions in our charter documents may be to deter business combination transactions not approved by our Board of Directors, including acquisitions that may offer a premium over market price to some or all stockholders |
| Reporting requirements of a public company As a public company, we are required to comply with the reporting obligations of the Exchange Act and may be required to comply with Section 404 of the Sarbanes-Oxley Act for our fiscal year ending December 31, 2007 |
| If we fail to comply with the reporting obligations of the Exchange Act and Section 404 of the Sarbanes-Oxley Act, or if we fail to achieve and maintain adequate internal controls over financial reporting, our business, results of operations and financial condition, and investors’ confidence in us, could be materially adversely affected |
| -7- ______________________________________________________________________ [33]Table of Contents As a public company, we are required to comply with the periodic reporting obligations of the Exchange Act, including preparing annual reports, quarterly reports and current reports |
| Our failure to prepare and disclose this information in a timely manner could subject us to penalties under federal securities laws, expose us to lawsuits and restrict our ability to access financing |
| In addition, we are required under applicable law and regulations to integrate our systems of internal controls over financial reporting |
| We plan to evaluate our existing internal controls with respect to the standards adopted by the Public Company Accounting Oversight Board |
| During the course of our evaluation, we may identify areas requiring improvement and may be required to design enhanced processes and controls to address issues identified through this review |
| This could result in significant delays and cost to us and require us to divert substantial resources, including management time, from other activities |
| TECHNOLOGY AND MARKET RISKS We are dependent on wireless telecommunications |
| The principal target market for our products is wireless telecommunications |
| The devotion of substantial resources to the wireless telecommunications market creates vulnerability to adverse changes in this market |
| Adverse developments in the wireless telecommunications market, which could come from a variety of sources, including future competition, new technologies or regulatory decisions, could affect the competitive position of wireless systems |
| Any adverse developments in the wireless telecommunications market may have a material adverse effect on our business, operating results and financial condition |
| We are dependent on the enhancement of existing networks and the build-out of next-generation networks, and the capital spending patterns of wireless network operators |
| Increased sales of products are dependent on a number of factors, one of which is the build-out of next generation enabled wireless communications networks as well as enhancements of existing infrastructure |
| Building wireless networks is capital intensive, as is the process of upgrading existing equipment |
| Further, the capital spending patterns of wireless network operators is beyond management’s control and depends on a variety of factors, including access to financing, the status of federal, local and foreign government regulation and deregulation, changing standards for wireless technology, the overall demand for wireless services, competitive pressures and general economic conditions |
| The build-out of next-generation networks may take years to complete |
| The magnitude and timing of capital spending by these operators for constructing, rebuilding or upgrading their systems significantly impacts the demand for our products |
| Any decrease or delay in capital spending patterns in the wireless communication industry, whether because of a general business slowdown or a reevaluation of the prospective demand for data and other services, would delay the build-out of these networks and may significantly harm business prospects |
| Our success depends on the market’s acceptance of our products |
| Our RF products, including our ANF and RF² products, have not been sold in very large quantities and a sufficient market may not develop for these products |
| Customers establish demanding specifications for performance, and although we believe we have met or exceeded these specifications to date, there is no guarantee that the wireless service providers will elect to use these solutions to solve their wireless network problems |
| Although we have enjoyed substantial revenue growth over the past year, including the best four revenue quarters in our history during 2005, there is no assurance that we will continue to receive orders from these customers |
| Rapid technological change and future competitive technologies could negatively affect our operations |
| The field of telecommunications is characterized by rapidly advancing technology |
| Our success will depend in large part upon our ability to keep pace with advancing our high performance RF technology and efficient, readily available low cost materials technologies |
| Rapid changes have occurred, and are likely to continue to occur, in the development of wireless telecommunications |
| Development efforts may be rendered obsolete by the adoption of alternative solutions to current wireless operator problems or by technological advances made by others |
| BUSINESS RISKS Dependence on a limited number of customers Sales to three of our customers accounted for 97prca and 94prca of our total revenues for 2005 and 2004, respectively |
| During 2005, the top three customers were Verizon Wireless, Alltel Corporation, and Bluegrass Cellular Corporation, respectively |
| In addition, a significant amount of our technical, managerial and working capital resources have been focused on working with these and a limited number of other operators and OEMs |
| Sales, in dollars, to non-”top three” customers during 2005 was roughly twice the 2004 amount, reflecting a continued expansion in customer base |
| We expect that if our products achieve market acceptance, a limited number of wireless service providers and OEMs will account for a substantial portion of revenue during any period |
| Sales of many of our products depend in significant part upon the decisions of prospective and current customers to adopt and expand their use of these products |
| Wireless service providers, wireless equipment OEMs and our other customers are significantly larger than we are, and are able to exert a high degree of influence over us |
| Customers’ orders are affected by a variety of factors such as new product introductions, regulatory approvals, end user demand for wireless services, customer budgeting cycles, inventory levels, customer integration requirements, competitive conditions and general economic conditions |
| The failure to attract new customers would have a material adverse effect on our business, operating results and financial condition |
| Technical and business evaluation by potential customers can take up to a year or more for products based on new technologies |
| The length of the approval process is affected by a number of factors, including, among others, the complexity of the product involved, priorities of the customers, budgets and regulatory issues affecting customers |
| We may not obtain the necessary approvals or ensuing sales of such products may not occur |
| The length of customers’ approval process or delays could make our quarterly revenues and earnings inconsistent and difficult to trend |
| -8- ______________________________________________________________________ [34]Table of Contents We are dependant on limited sources of supply Certain parts and components used in our RF products are only available from a limited number of sources |
| Our reliance on these limited source suppliers exposes us to certain risks and uncertainties, including the possibility of a shortage or discontinuation of certain key components and reduced control over delivery schedules, manufacturing capabilities, quality and costs |
| Any reduced availability of such parts or components when required could materially impair the ability to manufacture and deliver products on a timely basis and result in the cancellation of orders, which could have a material adverse effect on our business, operating results and financial condition |
| In addition, the purchase of certain key components involves long lead times and, in the event of unanticipated increases in demand for our products, we may be unable to manufacture products in quantities sufficient to meet customers’ demand in any particular period |
| We have few guaranteed supply arrangements with our limited source suppliers, do not maintain an extensive inventory of parts or components, and customarily purchase parts and components pursuant to actual or anticipated purchase orders placed from time to time in the ordinary course of business |
| Related to this topic, we produce substantially all of our products through third-party contract manufacturers |
| Like raw materials, the elimination of any of these entities or delays in the fulfillment process, for whatever reason, may impact our ability to fulfill customer orders on a timely basis and may have a material adverse effect on our business, operating results, or financial condition |
| To satisfy customer requirements, we may be required to stock certain long lead-time parts and/or finished product in anticipation of future orders, or otherwise commit funds toward future purchase |
| The failure of such orders to materialize as forecasted could limit resources available for other important purposes or accelerate the requirement for additional funds |
| In addition, such excess inventory could become obsolete, which would adversely affect financial performance |
| Business disruption, production shortfalls or financial difficulties of a limited source supplier could materially and adversely affect us by increasing product costs or reducing or eliminating the availability of such parts or components |
| In such events, the inability to develop alternative sources of supply quickly and on a cost-effective basis could materially impair the ability to manufacture and deliver products on a timely basis and could have a material adverse effect on our business, operating results and financial condition |
| Dependence on key personnel Our success will depend in large part upon our ability to attract and retain highly qualified management, engineering, manufacturing, marketing, sales and R&D personnel |
| Due to the specialized nature of our business, it may be difficult to locate and hire qualified personnel |
| The loss of services of one of our executive officers or other key personnel, or the failure to attract and retain other executive officers or key personnel, could have a material adverse effect on our business, operating results and financial condition |
| Failure of products to perform properly might result in significant warranty expenses |
| In general, our products carry a warranty of one or two years, limited to replacement of the product or refund of the cost of the product |
| In addition, we offer our customers extended warranties |
| Repeated or widespread quality problems could result in significant warranty expenses and/or the loss of customer confidence |
| The occurrence of such quality problems could have a material adverse effect on our business, operating results and financial condition |
| Intense competition, and increasing consolidation in our industry could create stronger competitors and harm the business |
| The wireless telecommunications equipment market is very competitive |
| Many of these companies have substantially greater financial resources, larger research and development staffs and greater manufacturing and marketing capabilities than we do |
| Our products compete directly with products which embody existing and future competing commercial technologies |
| Other emerging wireless technologies may also provide protection from RF interference and offer enhanced range to wireless communication service providers, potentially at lower prices and/or superior performance, and may therefore compete with our products |
| High performance RF solutions may not become a preferred technology to address the needs of wireless communication service providers |
| Failure of our products to improve performance sufficiently, reliably, or at an acceptable price or to achieve commercial acceptance or otherwise compete with existing and new technologies, would have a material adverse effect on our business, operating results and financial condition |
| -9- ______________________________________________________________________ [35]Table of Contents LEGAL RISKS Intellectual Property and Patents Our success will depend in part on our ability to obtain patent protection for our products and processes, to preserve trade secrets and to operate without infringing upon the patent or other proprietary rights of others and without breaching or otherwise losing rights in the technology licenses upon which any of our products are based |
| We have applied for patents for inventions developed internally and acquired patent rights in connection with the purchase of the Adaptive Notch Filtering business unit of Lockheed Martin Canada |
| We believe there are a large number of patents and patent applications covering RF products and other products and technologies that we are pursuing |
| Accordingly, the patent positions of companies using RF technologies, including us, are uncertain and involve complex legal and factual questions |
| The patent applications filed by us or others may not result in issued patents or the scope and breadth of any claims allowed in any patents issued to us or others may not exclude competitors or provide competitive advantages |
| In addition, patents issued to us, our subsidiaries or others may not be held valid if subsequently challenged or others may claim rights in the patents and other proprietary technologies owned or licensed by us |
| Others may have developed or may in the future develop similar products or technologies without violating any of our proprietary rights |
| Furthermore, the loss of any license to technology that we might acquire in the future may have a material adverse effect on our business, operating results and financial condition |
| Some of the patents and patent applications owned by us are subject to non-exclusive, royalty-free licenses held by various US governmental units |
| These licenses permit these US government units to select vendors other than us to produce products for the US Government, which would otherwise infringe our patent rights that are subject to the royalty-free licenses |
| In addition, the US Government has the right to require us to grant licenses (including exclusive licenses) under such patents and patent applications or other inventions to third parties in certain instances |
| Older patent applications in the US are currently maintained in secrecy until patents are issued |
| In foreign countries and for newer US patent applications, this secrecy is maintained for a period of time after filing |
| Accordingly, publication of discoveries in the scientific literature or of patents themselves or laying open of patent applications in foreign countries or for newer US patent applications tends to lag behind actual discoveries and filing of related patent applications |
| Due to this factor and the large number of patents and patent applications related to RF materials and technologies, and other products and technologies that we are pursuing, comprehensive patent searches and analyses associated with RF technologies and other products and technologies that we are pursuing are often impractical or not cost-effective |
| As a result, patent and literature searches cannot fully evaluate the patentability of the claims in our patent applications or whether materials or processes used by us for our planned products infringe or will infringe upon existing technologies described in US patents or may infringe upon claims in patent applications made available in the future |
| Because of the volume of patents issued and patent applications filed relating to RF technologies and other products and technologies that we are pursuing, we believe there is a significant risk that current and potential competitors and other third-parties have filed or will file patent applications for, or have obtained or will obtain, patents or other proprietary rights relating to materials, products or processes used or proposed to be used by us |
| In any such case, to avoid infringement, we would have to either license such technologies or design around any such patents |
| We may be unable to obtain licenses to such technologies or, if obtainable, such licenses may not be available on terms acceptable to us or we may be unable to successfully design around these third-party patents |
| Our participation in litigation or patent office proceedings in the US or other countries to enforce patents issued or licensed to us, to defend against infringement claims made by others or to determine the ownership, scope or validity of the proprietary rights of us and others, could result in substantial cost to, and diversion of effort by, us |
| The parties to such litigation may be larger, better capitalized than we are and better able to support the cost of litigation |
| An adverse outcome in any such proceedings could subject us to significant liabilities to third parties, require us to seek licenses from third parties and/or require us to cease using certain technologies, any of which could have a material adverse effect on our business, operating results and financial condition |
| Litigation We have no active lawsuits, nor any pending to the best of our knowledge |
| If we are not successful in defending against whatever claims and charges may be made against us in the future, there may be a material adverse effect on our business, operating results and financial condition |
| Government Regulations Although we believe that our wireless telecommunications products themselves are not subject to licensing by, or approval requirements of, the FCC, the operation of base stations is subject to FCC licensing and the radio equipment into which our products would be incorporated is subject to FCC approval |
| Base stations and the equipment marketed for use therein must meet specified technical standards |
| The ability to sell our wireless telecommunications products is dependent on the ability of wireless base station equipment manufacturers and wireless base station operators to obtain and retain the necessary FCC approvals and licenses |
| In order for them to be acceptable to base station equipment manufacturers and to base station operators, the characteristics, quality and reliability of our base station products must enable them to meet FCC technical standards |
| We may be subject to similar regulations of foreign governments |
| Any failure to meet such standards or delays by base station equipment manufacturers and wireless base station operators in obtaining the necessary approvals or licenses could have a material adverse effect on our business, operating results and financial condition |
| In addition, certain RF filters are on the US Department of Commerce’s export regulation list |
| Therefore, exportation of such RF filters to certain countries may be restricted or subject to export licenses |
| We are subject to governmental labor, safety and discrimination laws and regulations with substantial penalties for violations |
| In addition, employees and others may bring suit against us for perceived violations of such laws and regulations |
| Defending against such complaints could result in significant legal costs for us |
| Although we endeavor to comply with all applicable laws and regulations, we may be the subject of complaints in the future, which could have a material adverse effect on our business, operating results and financial condition |
| Environmental Liability Certain hazardous materials may be used in research, development and to the extent of any manufacturing operations |
| As a result, we are subject to stringent federal, state and local regulations governing the storage, use and disposal of such materials |
| It is possible that current or future laws -10- ______________________________________________________________________ [36]Table of Contents and regulations could require us to make substantial expenditures for preventive or remedial action, reduction of chemical exposure, or waste treatment or disposal |
| We believe we are in material compliance with all environmental regulations and to date have not had to incur significant expenditures for preventive or remedial action with respect to the use of hazardous materials |
| However, our operations, business or assets could be materially and adversely affected by the interpretation and enforcement of current or future environmental laws and regulations |
| In addition, although we believe that our safety procedures for handling and disposing of such materials comply with the standards prescribed by state and federal regulations, there is the risk of accidental contamination or injury from these materials |
| In the event of an accident, we could be held liable for any damages that result |
| Furthermore, the use and disposal of hazardous materials involves the risk that we could incur substantial expenditures for such preventive or remedial actions |
| The liability in the event of an accident or the costs of such actions could exceed available resources or otherwise have a material adverse effect on the business, results of operations and financial condition |
| We carry property and worker’s compensation insurances in full force and effect through nationally known carriers which include pollution cleanup or removal and medical claims for industrial incidents |
| RISKS RELATED TO ACQUISITIONS AND BUSINESS EXPANSION Risks of future acquisitions In the future, we may pursue acquisitions to obtain products, services and technologies that we believe will complement or enhance our current product or services offerings |
| At present, no agreements or other arrangements exist with respect to any such acquisition |
| An acquisition may not produce the revenue, earnings or business synergies as anticipated and may attach significant unforeseen liabilities, and an acquired product, service or technology might not perform as expected |
| If an acquisition is pursued, our management could spend a significant amount of time and effort in identifying and completing the acquisition and may be distracted from the operations of the business |
| In addition, management would probably have to devote a significant amount of resources toward integrating the acquired business with the existing business, and that integration may not be successful |
| International operations We are in discussions and have agreements in place with companies in non-US markets to form manufacturing, product development joint ventures and other marketing, distribution or consulting arrangements |
| We also have agreements with foreign entities for international distribution as well as foreign sources of components to be used in North America |
| These agreements and relationships help us optimize our competitive position and cost structure |
| There are many such entities that exist, domestically and internationally, that offer similar capabilities, and thus could reduce risk exposure to the loss of such foreign entities |
| We believe that non-US markets could provide a substantial source of revenue in the future |
| However, there are certain risks applicable to doing business in foreign markets that are not applicable to companies doing business solely in the US For example, we may be subject to risks related to fluctuations in the exchange rate between the US dollar and foreign currencies in countries in which we do business |
| In addition, we may be subject to the additional laws and regulations of these foreign jurisdictions, some of which might be substantially more restrictive than similar US ones |
| Foreign jurisdictions may also provide less patent protection than is available in the US, and we may be less able to protect our intellectual property from misappropriation and infringement in these foreign markets |