Vistaprint 2006 Annual Report Download - page 30

Table of Contents
allowance of our European patent relating to certain downloadable document design programs and methods were filed in 2005 and remain
pending. Any such claims, whether or not successful, could be extremely costly, could damage our reputation and brand and substantially harm
our business and results of operations.
Our primary brand is “VistaPrint.” We hold trademark registrations for the VistaPrint trademark in 15 jurisdictions, including registrations in
our major markets of the United States, the European Union, Canada and Japan. Additional applications for the VistaPrint mark are pending. Our
competitors or other entities may adopt names similar to ours, thereby impeding our ability to build brand identity and possibly leading to customer
confusion. There are several companies that currently incorporate or may incorporate in the future “Vista” into their company, product or service
names, such as Microsoft Corporation’s decision to name its next generation operating system “Microsoft Windows Vista.” There could be
potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations
of the term VistaPrint or our other trademarks. Any claims or customer confusion related to our trademarks could damage our reputation and
brand and substantially harm our business and results of operations.
If we become involved in intellectual property litigation or other proceedings related to a determination of rights, we could incur
substantial costs, expenses or liability, lose our exclusive rights or be required to stop certain of our business activities.
A third party may sue us for infringing its intellectual property rights. In addition, a third party may claim that we have improperly obtained or
used its confidential or proprietary information. Likewise, we may need to resort to litigation to enforce a patent issued to us or to determine the
scope and validity of third−party proprietary rights. For example, in November 2004 we received a letter from attorneys representing Daniel Keane,
the chief executive officer of Mod−Pac, our former North American printing supplier, and the brother of Robert S. Keane, our chief executive
officer, claiming an inventorship interest in our issued United States patent relating to printing aggregation. If Daniel Keane were to commence an
action to assert this claim and were successful in establishing co−inventorship, he would be able to use, and license to others the right to use, this
patent without paying any compensation to us. We have informed Daniel Keane that we believe he does not qualify as a co−inventor, but there
can be no guarantee that he will not commence a formal action or that, if commenced, we will be successful in defending against such action.
Similarly, Daniel Keane may claim inventorship in our other patents or pending applications relating to printing aggregation and may accordingly
obtain an interest in these other patents and pending applications.
The cost to us of any litigation or other proceeding relating to intellectual property rights, even if resolved in our favor, could be substantial,
and the litigation would divert our management’s efforts from growing our business. Potential adversaries may be able to sustain the costs of
complex intellectual property litigation more effectively than we can because they have substantially greater resources. Uncertainties resulting
from the initiation and continuation of any litigation could limit our ability to continue our operations or may prevent or delay our acquisition by a
third party.
We have, in the past, received letters from third parties that state that these third parties have patent rights that cover aspects of the
technology that we use in our business and that the third parties believe we are obligated to license in order to continue to use such technology. If
any parties successfully claim that our sale, use, manufacturing or importation of technologies infringes upon their intellectual property rights, we
might be forced to pay damages and attorney’s fees. Additionally, if we are found to have willfully infringed a third parties’ patent, we may be liable
for treble damages and a court could enjoin us from performing the infringing activity. Thus, the situation could arise in which our ability to use
certain technologies important to the operation of our business would be restricted by a court order.
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