Vistaprint 2009 Annual Report Download - page 97

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VISTAPRINT LIMITED
(predecessor to Vistaprint N.V.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2009, 2008 and 2007
(in thousands, except share and per share data)
Purchase Commitments
At June 30, 2009, the Company had unrecorded commitments under contracts to expand the
Canadian and Dutch production facilities and other facility related commitments of approximately $349,
$1,615 and $1,790, respectively and to purchase production equipment for the Canadian and Dutch
production facilities of approximately $5,699 and $3,320, respectively.
Legal Proceedings
On July 27, 2006, Vistaprint Technologies Limited, a wholly-owned subsidiary of the Company’s
subsidiary Vistaprint 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 Technologies Limited’s European patents related to
computer-implemented methods and apparatus for generating pre-press graphic files. On June 7,
2007, unitedprint.com AG filed a patent nullification action in the German Patent Court in relation to the
same European patent at issue in Vistaprint Technologies Limited’s 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 the 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. 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. The Company is unable to express an
opinion as to the likely outcome of such appeal.
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. The complaint seeks 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 exchange of relevant documents and records
and the depositions of fact witnesses in connection with the allegations of the parties have been
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. On September 2, 2008, the Court granted Vistaprint Technologies Limited’s request for a
stay. Subsequent to the Court’s decision, Vistaprint Technologies Limited submitted a request for
reexamination of each of the patents-in-suit to the U.S. Patent Office. The reexamination requests
were granted in February 2009. Pursuant to the Court’s order, the stay will remain in place pending the
91
Form 10-K