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Software AG GB 2012, englisch

06 HIGHLIGHTS 08 LETTER FROM THE MANAGEMENT BOARD 12 THE COMPANY 38 SOFTWARE AG SHARE 46 CORPORATE GOVERNANCE 58 REPORT OF THE SUPERVISORY BOARD 68 GROUP MANAGEMENT REPORT 155 CONSOLIDATED FINANCIAL STATEMENTS 245 FURTHER INFORMATION 147 (2011: decrease by €1.2 million). Constantly monitoring the creditworthiness of the affected banks helps us minimize the risk of losing our business partners with whom we con- clude derivative financial instruments. Other financial risks Other financial risks include predominantly the risk of bad debt losses. No cluster risks exist due to Software AG’s diver- sified markets and customer structure. Due to the long-range average, default risks are quite marginal as a result of the generally high level of creditworthiness on the part of our customers. To reduce the impacts of this risk, we are using an automated approval process for customer contracts, known as the Global Deal Desk, based on our own technol- ogy. To protect our cash holdings, we constantly monitor our partner banks’ creditworthiness and adjust our investment decisions accordingly. Legal risks Patent infringements Patent law, especially in the U.S. due to the large number of software patents granted combined with the peculiarities of U.S. procedural law, favors the bringing of patent lawsuits. This also affects Software AG. Patent litigation in the U.S. entails the risk of higher proce- dural costs to defend ourselves against claims without pro- vision for reimbursement in American procedural law. The Company has an Intellectual Property Rights team to counter patent law suits. In addition to tasks associated with patent law protection, the team handles our own patent applications and coordinates our defense against patent suits. Our own portfolio of patents is the best protection against competitors’ claims, because it offers opportunities for cross-licensing agreements. Not least because of that, Software AG is constantly working to expand its patent port- folio. Software AG owns 102 (2011: 94) patents from 68 (2011: 49) patent families. In addition, 229 (2011: 214) applications from 125 (2011: 110) patent families are pend- ing. Of a total of 26 (2011: 24) filings in 2012, 26 (2011: 22) were for new inventions. These patents could contribute in the future to generating additional licensing revenues. Patent law suits In February 2010, a software company in Virginia (USA) sued Software AG together with 11 additional defendants, includ- ing IBM and SAP, for infringement of several of its software patents. The lawsuit was filed with a court in Virginia. The proceedings were suspended for Software AG and additional defendants by order of the court. The proceedings are con- tinuing against only one of the defendants. The verdict of these proceedings will determine if the proceedings against Software AG will be resumed. The court dismissed the test case, upon which the plaintiff filed an appeal. The court of appeals rejected the appeal in January 2012. The plaintiff brought further legal action. The proceedings against the other defendants are still pending. THE SOFTWARE AG GROUP 69 ECONOMIC CONDITIONS 78 BUSINESS TREND AND ECONOMIC SITUATION 80 FINANCIAL PERFORMANCE 82 FINANCIAL POSITION 89 FINANCIAL STATEMENTS OF SOFTWARE AG 92 (PARENT COMPANY) ADDITIONAL EARNINGS-RELATED FACTORS 95 TAKEOVER-RELATED DISCLOSURES 125 REMUNERATION REPORT 127 RISK REPORT 139 EVENTS AFTER THE BALANCE SHEET DATE 149 FORECAST 151