Vistaprint 2012 Annual Report Download - page 28

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potential for one or more countries to exit the Eurozone. Turmoil in the world's financial markets has materially and
adversely impacted the availability of financing to a wide variety of businesses, including micro businesses, and the
resulting uncertainty led to reductions in capital investments, marketing expenditures, overall spending levels, future
product plans, and sales projections across industries and markets. These trends could have a material and
adverse impact on the demand for our products and services, our financial results from operations, and our ability to
attract and retain employees in jurisdictions where we have significant operations.
The United States government may further increase border controls and impose duties or restrictions on
cross-border commerce that may substantially harm our business by impeding our shipments into the
United States from our Canadian manufacturing facility.
For the fiscal years ended June 30, 2012 and June 30, 2011 we derived 51% and 53% of our revenue,
respectively, from sales to customers made through Vistaprint.com, our United States-focused website. We produce
substantially all physical products for our United States customers at our facility in Windsor, Ontario, and the United
States imposes restrictions on shipping goods into the United States from Canada. The United States also imposes
protectionist measures such as customs duties and tariffs that limit free trade, some of which may apply directly to
product categories that comprise a material portion of our revenues. The customs laws, rules and regulations that
we are required to comply with are complex and subject to unpredictable enforcement and modification. We have
from time to time experienced delays in shipping our manufactured products into the United States as a result of
these restrictions which have, in some instances, resulted in delayed delivery of orders.
In the future, the United States could impose further border controls and restrictions, interpret or apply
regulations in a manner unfavorable to the importation of products from outside of the U.S., impose quotas, tariffs or
import duties, increase the documentation requirements applicable to cross border shipments or take other actions
that have the effect of restricting the flow of goods from Canada and other countries to the United States. For
example, if there were a serious threat to U.S. security, such as war or an attack on the United States, the U.S.
government could shut down the U.S.-Canadian border for an extended period of time, impose policies that would
result in significant Canadian export delays or otherwise disrupt our North American business operations. If we
experienced greater difficulty or delays shipping products into the United States or were foreclosed from doing so,
or if our costs and expenses materially increased, our business and results of operations could be harmed.
If we are unable to protect our intellectual property rights, our reputation and brands could be damaged,
and others may be able to practice our technology, which could substantially harm our business and
results of operations.
We rely on a combination of patent, trademark, trade secret and copyright law and contractual restrictions
to protect our intellectual property, but these protective measures afford only limited protection. Despite our efforts
to protect our proprietary rights, unauthorized parties may copy aspects of our trademarks, websites features and
functionalities or obtain and use information that we consider proprietary, such as the technology used to operate
our websites and our production operations.
We intend to continue to pursue patent coverage in the United States and other countries to the extent we
believe such coverage is justified, appropriate, and cost efficient, but there can be no guarantee that any of our
pending applications or continuation patent applications will be granted. In addition, we have in the past and may in
the future face infringement, invalidity, intellectual property ownership or similar claims brought by third parties with
respect to our current or future patents. Any such claims, whether or not successful, could be extremely costly,
damage our reputation and brands and substantially harm our business and results of operations.
Although we hold trademark registrations for the Vistaprint trademark in jurisdictions throughout the world,
our competitors or other entities may adopt names or marks similar to ours, thereby impeding our ability to build
brand identity and possibly leading to customer confusion. There could be potential trade name or trademark
infringement claims brought by owners of other trademarks that incorporate variations of the term “Vistaprint” or our
other trademarks, and we may institute such claims against other parties. Any claims or customer confusion related
to our trademarks could damage our reputation and brands and substantially harm our business and results of
operations.