Vistaprint 2009 Annual Report Download - page 38

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, a wholly-owned subsidiary of
Vistaprint Limited, 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 stayed pending resolution of Vistaprint Technologies Limited’s requests for reexamination of
the patents-in-suit before the U.S. Patent Office.
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, unitedprint.com AG 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. However, on
November 13, 2008, the German Patent Court held an oral hearing on the patent nullification action
brought by unitedprint.com and revoked the patent at issue. The Patent Court issued a written opinion
stating the basis for its ruling on March 24, 2009 and, on April 22, 2009, Vistaprint Technologies
Limited filed a notice of appeal of the Patent Court’s ruling with the German Federal Supreme Court.
We sell our products and services primarily through our websites and our inability to acquire or
maintain domain names for our websites could result in the loss of customers which would
substantially harm our business and results of operations.
We sell our products and services primarily through our websites. We currently own or control a
number of Internet domain names used in connection with our various websites, including
Vistaprint.com and similar names with alternate URL names, such as .net, .de and .co.uk. Domain
names generally are regulated by Internet regulatory bodies. If we are unable to use a domain name in
a particular country, we would be forced to either purchase the domain name from the entity that owns
or controls it, which we may not be able to do on commercially acceptable terms, or at all, incur
significant additional expenses to market our products within that country, including the development of
a new brand and the creation of new promotional materials and packaging, or elect not to sell products
in that country. Any of these results could substantially harm our business and results of operations.
Furthermore, the relationship between regulations governing domain names and laws protecting
trademarks and similar proprietary rights is unclear and subject to change. We might not be able to
prevent third parties from acquiring domain names that infringe or otherwise decrease the value of our
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