Vistaprint 2006 Annual Report Download - page 29

Table of Contents
We have limited experience in managing operations in multiple countries and if we are unable to manage the challenges associated with
our international operations, the growth of our business could be limited.
We have a limited history of managing non−United States operations. From March 2001 to January 2004, all of our business was
conducted from one facility located in the United States and from our website operations in Bermuda. Over the past three years, we expanded our
business to include operations in five different countries. For example, we operate printing facilities in Venlo, the Netherlands and Windsor,
Ontario, Canada, a customer support, sales and service, and graphic design center in Montego Bay, Jamaica, website operations in Devonshire,
Bermuda and technology development, marketing, finance and administrative offices in Lexington, Massachusetts, United States. We have
localized websites to serve many additional international markets. For the fiscal year ended June 30, 2006, we derived 29% of our revenue from
our non−United States websites. We are subject to a number of risks and challenges that specifically relate to our international operations. Our
international operations may not be successful if we are unable to meet and overcome these challenges, which could limit the growth of our
business and may have an adverse effect on our business and operating results. We also have limited experience in confronting and addressing
the risks and challenges we face in operating in several countries. These risks and challenges include:
Ÿfluctuations in foreign currency exchange rates that may increase the United States dollar cost, or reduce United States dollar revenue,
of our international operations;
Ÿdifficulty managing operations in, and communications among, multiple locations and time zones;
Ÿlocal regulations that may restrict or impair our ability to conduct our business as planned;
Ÿprotectionist laws and business practices that favor local producers and service providers;
Ÿfailure to properly understand and develop graphic design content and product formats appropriate for local tastes;
Ÿrestrictions imposed by local labor practices and laws on our business and operations; and
Ÿfailure of local laws to provide a sufficient degree of protection against infringement of our intellectual property.
We may not be able to protect our intellectual property rights, which may impede our ability to build brand identity, cause confusion
among our customers, damage our reputation and permit others to practice our patented 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. These protective measures afford only limited protection. Despite our efforts to protect our proprietary rights, unauthorized parties may
attempt to copy aspects of our websites features and functionalities or to obtain and use information that we consider proprietary, such as the
technology used to operate our websites and our production operations and our trademarks.
As of June 30, 2006, we held eight issued United States patents, two issued European patents and one issued French patent and we had
more than 30 patent applications pending in the United States. 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. There can be no guarantee that any of our pending
applications or continuation patent applications will be granted. In addition, there could be infringement, invalidity, co−inventorship or similar claims
brought by third parties with respect to any of our currently issued patents or any patents that may be issued to us in the future. For example,
administrative opposition proceedings asking the European Patent Office to reconsider the
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