Vistaprint 2008 Annual Report Download - page 33

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. 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.
Alternatively, we may be required to, or decide to, enter into a license with a third party that
claims infringement by us. Any license required under any patent may not be made available on
commercially acceptable terms, if at all. In addition, such licenses are likely to be non-exclusive and,
therefore, our competitors may have access to the same technology licensed to us. If we fail to obtain
a required license and are unable to design around a third party’s patent, we may be unable to
effectively conduct certain of our business activities, which could limit our ability to generate revenues
or maintain profitability and possibly prevent us from generating revenue sufficient to sustain our
operations.
In addition, 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. Our ability to enforce our patents, copyrights,
trademarks, and other intellectual property is subject to general litigation risks, as well as uncertainty
as to the enforceability of our intellectual property rights in various countries. When we seek to enforce
our rights, we may be subject to claims that the intellectual property right is invalid, is otherwise not
enforceable, or is licensed to the party against whom we are asserting a claim. In addition, our
assertion of intellectual property rights could result in the other party seeking to assert alleged
intellectual property rights of its own against us, which may adversely impact our business in the
manner discussed above. Our inability to enforce our intellectual property rights under these
circumstances may negatively impact our competitive position and our business.
For instance, in May 2007, VistaPrint Technologies Limited, our wholly-owned subsidiary, initiated
litigation in the United States District Court for the District of Minnesota alleging infringement by
123Print, Inc. and Drawing Board (US), Inc. of certain U.S. patents owned by VistaPrint Technologies
Limited, and subsequently expanded the lawsuit to include Taylor Strategic Accounts, Inc., a related
party to 123Print, Inc. and Drawing Board (US), Inc., as an additional defendant. The defendants
denied the infringement allegations and asserted counterclaims for declaratory judgment of invalidity,
unenforceability and non-infringement of the patents. This litigation is currently in the discovery stages.
In July 2006, 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 of one of our European patents. In response to
VistaPrint Technologies Limited’s infringement claim, print24 GmbH filed a patent nullification action
against us in June 2007 in German Patent Court in relation to the same European patent at issue in
our infringement lawsuit against print24 and its co-defendants. On July 31, 2007, the District Court in
Düsseldorf ruled in VistaPrint Technologies Limited’s favor on the underlying infringement claim
against print24 and its co-defendants, granting all elements of our requested injunction and ordering
the defendants to pay damages for past infringement. The Düsseldorf District Court’s ruling went into
effect in early September 2007, and was not appealed by the defendants. Print24’s nullification action
against us in German Patent Court remains outstanding.
Form 10-K
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