Vistaprint 2008 Annual Report Download - page 91

VISTAPRINT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2008, 2007 and 2006
(in thousands, except share and per share data)
substantially completed. In early June 2008, newly discovered third party prior art documents were
introduced into the litigation. These documents had not been reviewed and considered by the U.S.
Patent Office prior to issuance of the patents-in-suit. For that reason, on June 30, 2008, VistaPrint
Technologies Limited requested the United States District Court to stay the litigation to provide the U.S.
Patent Office an opportunity to reexamine the patents-in-suit in light of these newly discovered
documents. The defendants opposed VistaPrint Technologies Limited’s request for a stay. The Court
has not yet ruled on VistaPrint Technologies Limited’s request for a stay, but the case has been
suspended pending the Court’s decision.
On July 29, 2008, a purported class action lawsuit was filed in the United States District Court for
the Southern District of Texas (the “Texas Complaint”) against VistaPrint Corp., VistaPrint USA, Inc.,
Vertrue, Inc. and Adaptive Marketing, LLC (collectively, the “Defendants”). Adaptive Marketing, LLC is
a Vertrue, Inc. company that provides subscription-based membership discount programs, including
programs that are offered on the Company’s vistaprint.com website (Vertrue, Inc. and Adaptive
Marketing, LLC are sometimes collectively referred to herein as the “Vertrue Defendants”). The Texas
Complaint alleges that the Defendants violated, among other statutes, the Electronic Funds Transfer
Act, the Electronic Communications Privacy Act, the Texas Deceptive Trade Practices-Consumer
Protection Act and the Texas Theft Liability Act, in connection with certain membership discount
programs offered to VistaPrint customers on the Company’s vistaprint.com website. The Texas
Complaint also seeks recovery for unjust enrichment, conversion, and similar common law claims. The
U.S. District Court for the Southern District of Texas has scheduled an initial pretrial conference for
October 2, 2008. The Company also has discovered that, on July 31, 2008 and August 25, 2008,
nearly identical purported class action lawsuits were filed in the United States District Court, District of
New Jersey and in the United States District Court, Southern District of Alabama, respectively, against
the same Defendants on behalf of a different plaintiffs. The complaints in the New Jersey and Alabama
lawsuits include substantially the same purported Federal and common law claims as the Texas
Complaint, but the New Jersey action contains a state law claim under the New Jersey Consumer
Fraud Act and the Alabama lawsuit does not contain any additional state law claims.
Among other allegations, the plaintiffs in each action claim that after ordering products on the
Company’s vistaprint.com website they were enrolled in certain membership discount programs
operated by the Vertrue Defendants and that monthly subscription fees for the programs were
subsequently charged directly to the credit or debit cards they used to make purchases on
vistaprint.com, in each case purportedly without their knowledge or authorization. The plaintiffs also
claim that the Defendants failed to disclose to them that the credit or debit card information they
provided to make purchases on vistaprint.com would be disclosed to the Vertrue Defendants and
would be used to pay for monthly subscriptions for the membership discount programs. The plaintiffs
have requested that the Defendants be enjoined from engaging in the practices complained of by the
plaintiffs. They also are seeking an unspecified amount of damages, including statutory and punitive
damages, as well as pre-judgment and post-judgment interest and attorneys’ fees and costs for the
purported class.
The Company believes it has meritorious defenses to these purported class action lawsuits and
intend to defend these actions vigorously. However, the lawsuits are in their earliest stages and the
Company is unable to express an opinion as to the likely outcome of such actions.
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Form 10-K