Vistaprint 2008 Annual Report Download - page 32

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 trademarks, 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.
As of June 30, 2008, we held 17 issued United States patents, 3 patents in other countries and
we had more than 40 patent applications pending in the United States and other countries. 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 allowance
of one of our European patents relating to certain downloadable document design programs and
methods were filed in 2005. At a hearing held in April 2008, an opposition panel of the European
Patent Office indicated its intention to revoke the patent at issue. The opposition panel’s decision has
not yet taken effect and we intend to appeal the decision. Any similar 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
the United States, the European Union, Canada, Japan and various other jurisdictions. 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 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 most recently released operating system
“Microsoft 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, and we may institute such claims against other parties. 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. 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. Similarly, companies or individuals
with whom we currently have a business relationship, or have had a past business relationship, may
commence an action seeking rights in one or more of our patents or pending patent 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
28