Regulatory, Intellectual Property, Privacy and Cybersecurity Risks
Our business, properties and products are subject to extensive United States federal and state and international safety,
environmental and other government regulation and any failure to comply with these regulations could harm our
reputation, expose us to damages and otherwise adversely affect our business.
Our business, properties, and products are subject to numerous international, federal, state, and other governmental laws,
rules, and regulations relating to, among other things: climate change; emissions to air; discharges to water; restrictions
placed on water and land usage and water availability; product and associated packaging; use of certain chemicals;
import and export compliance, including country of origin certification requirements; worker and product user health and
safety; consumer privacy; energy efficiency; product life-cycles; outdoor noise laws; and the generation, use, handling,
labeling, collection, management, storage, transportation, treatment, and disposal of hazardous substances, wastes, and
other regulated materials. We are unable to predict the ultimate impact of adopted or future laws, rules, and regulations
on our business, properties, or products.
Any of these laws, rules, or regulations may cause us to incur significant expenses to achieve or maintain compliance,
require us to modify our products, or modify our approach to our workforce, adversely affecting the price of or demand
for some of our products, and ultimately affect the way we conduct our operations. Failure to comply with any of these
laws, rules, or regulations could result in harm to our reputation and/or could lead to fines and other penalties, including
restrictions on the importation of our products into, and the sale of our products in, one or more jurisdictions until
compliance is achieved. In addition, changes to regulations may require us to incur expenses or modify product offerings
in order to maintain compliance with the actions of regulators and could decrease the demand for our products.
Our reliance upon patents, trademark laws, and contractual provisions to protect our proprietary rights may not be
sufficient to protect our intellectual property from others who may sell similar products and may lead to costly
litigation.
We hold patents and trademarks relating to various aspects of our products and believe that proprietary technical know-
how is important to our business. Proprietary rights relating to our products are protected from unauthorized use by third
parties only to the extent that they are covered by valid and enforceable patents or trademarks or are maintained in
confidence as trade secrets. We cannot be certain that we will be issued any patents from any pending or future patent
applications owned by or licensed to us or that the claims allowed under any issued patents will be sufficiently broad to
protect our technology. In the absence of enforceable patent or trademark protection, we may be vulnerable to
competitors who attempt to copy our products, gain access to our trade secrets and know-how or diminish our brand
through unauthorized use of our trademarks, all of which could adversely affect our business. Others may initiate
litigation to challenge the validity of our patents, or allege that we infringe their patents, or they may use their resources
to design comparable products that do not infringe our patents. We may incur substantial costs if our competitors initiate
litigation to challenge the validity of our patents, or allege that we infringe their patents, or if we initiate proceedings to
protect our proprietary rights. If the outcome of any such litigation is unfavorable to us, our business, operating results,
and financial condition could be adversely affected. Regardless of whether litigation relating to our intellectual property
rights is successful, the litigation could significantly increase our costs and divert management’s attention from operation
of our business, which could adversely affect our results of operations and financial condition. We also cannot be certain
that our products or technologies have not infringed or will not infringe the proprietary rights of others. Any such
infringement could cause third parties, including our competitors, to bring claims against us, resulting in significant
costs, possible damages and substantial uncertainty.
We may be subject to cybersecurity breaches and other disruptions to our information technology systems and
connected products that could adversely affect our business.
We use many information technology systems, some of which are managed by third parties, and manufacture connected
products (including connected vehicles), some of which are managed by third parties, in operating our business. Those
systems and products process potentially sensitive information, including intellectual property; proprietary business
information of Polaris and our dealers, suppliers, and other business partners; and personal information of consumers and
employees. Our systems and products, including those managed by third parties, have been, and could be in the future
vulnerable to breach, damage, disruption, or breakdown from various sources, including power loss, viruses, malware,
ransomware, phishing, denial of service, and other cyber-attacks that may be random, targeted, or the result of
misconduct of error by individuals with access to our systems. While we invest in layers of data and information
technology protection, and monitor continually evolving cybersecurity threats, there can be no assurance that our efforts
will prevent disruptions or breaches of our systems and connected products.
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