Vistaprint 2007 Annual Report Download - page 42

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Item 3. Legal Proceedings
One of our subsidiaries and our predecessor corporation were named as defendants in a
purported class action law suit filed in Los Angeles County (California) Superior Court on
September 14, 2004. The complaint alleged that the shipping and handling fees we charged for free
products were excessive and in violation of sections of the California Business and Professions Code.
The Los Angeles County Superior Court granted preliminary approval of a proposed settlement on
April 29, 2005 and, on June 17, 2005, gave final approval to the settlement. Under the terms of the
settlement, we agreed to change the term ‘shipping and handling’ to ‘shipping and processing’ on our
websites, to provide all class members who purchase free business cards from us for a two year period
the opportunity to receive additional cards at reduced rates, and to pay reasonable attorneys fees to
plaintiffs’ counsel. In August 2005, an objector to the settlement filed an appeal of the court’s final
approval of the settlement. On February 28, 2007, the California Court of Appeals ruled in our favor,
affirming the Superior Court’s final approval of the settlement. The period for the objector to appeal the
Court of Appeals’ decision passed without any appeal being filed, and the settlement became effective
on April 9, 2007.
On July 27, 2006, our wholly-owned subsidiary VistaPrint Technologies Limited filed a patent
infringement lawsuit against print24 GmbH, unitedprint.com AG and their two managing directors in the
District Court in Düsseldorf Germany, alleging infringement by the defendants in Germany of one of
VistaPrint’s European patents related to computer-implemented methods and apparatus for generating
pre-press graphic files. On June 7, 2007, print24 GmbH filed a patent nullification action in the German
Patent Court in relation to the same European patent at issue in VistaPrint’s infringement lawsuit
against print24 and its co-defendants. On July 31, 2007, the District Court in Düsseldorf ruled in
VistaPrint’s favor on the underlying infringement claim against print24 and its co-defendants, granting
the requested injunction and ordering the defendants to pay damages for past infringement. The
Düsseldorf Court’s ruling is scheduled to go into effect on August 30, 2007, subject to appeal by the
defendants. We are unable to express an opinion as to the likely outcome of any appeal by print24 and
its co-defendants of the Düsseldorf Court’s ruling in the infringement action. print24’s nullification action
in the German Patent Court remains outstanding, in its earliest stages, and we are unable to express
an opinion as to the likely outcome of such action.
On May 14, 2007, VistaPrint Technologies Limited filed a patent infringement lawsuit against
123Print, Inc. and Drawing Board (US), Inc., subsidiaries of Taylor Corporation, in the United States
District Court for the District of Minnesota. The complaint in the lawsuit asserts that the defendants
have infringed and continue to infringe three U.S. patents owned by VistaPrint Technologies Limited
related to browser-based tools for online product design. We are seeking an injunction against the
defendants and the recovery of damages. The defendants filed their Answer and Counterclaims to the
complaint on June 7, 2007, in which they denied the infringement allegations and asserted
counterclaims for declaratory judgment of invalidity, unenforceability and non-infringement of the
patents-in-suit. In August 2007, another Taylor Corporation subsidiary, Taylor Strategic Accounts, Inc.,
was added as an additional defendant in the case. The lawsuit is in its early stages and we are unable
to express an opinion as to the likely outcome.
We are involved, from time to time, in various legal proceedings arising from the normal course of
business activities. Although the results of litigation and claims cannot be predicted with certainty, we
do not expect resolution of these matters to have a material adverse impact on our consolidated results
of operations, cash flows or financial position. However, an unfavorable resolution of such a
proceeding could, depending on its amount and timing, materially affect our results of operations, cash
flows or financial position in a future period. Regardless of the outcome, litigation can have an adverse
impact on us because of defense costs, diversion of management resources and other factors.
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