Vistaprint 2010 Annual Report Download - page 31

Form 10-K
products for our United States customers at our facility in Windsor, Ontario. Restrictions on shipping
goods into the United States from Canada pose a substantial risk to our business. Particularly since
the terrorist attacks on September 11, 2001, the United States government has substantially
increased border surveillance and controls. We have from time to time experienced significant delays
in shipping our manufactured products into the United States as a result of these controls, which has,
in some instances, resulted in delayed delivery of orders.
The United States also imposes protectionist measures, such as customs duties and tariffs, that
limit free trade. Some of these measures may apply directly to product categories that comprise a
material portion of our revenues. The customs laws, rules and regulations that we are required to
comply with are complex and subject to unpredictable enforcement and modification. If the
United States were to impose further border controls and restrictions, interpret or apply regulations in
a manner unfavorable to the importation of products from outside of the U.S., impose quotas, tariffs or
import duties, increase the documentation requirements applicable to cross border shipments or take
other actions that have the effect of restricting the flow of goods from Canada and other countries to
the United States, we may have greater difficulty shipping products into the United States or be
foreclosed from doing so, experience shipping delays, or incur increased costs and expenses, all of
which would substantially impair our ability to serve the United States market and harm our business
and results of operations.
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, 2010, we had 47 issued patents and more than 50 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, and in June 2009, the panel issued a written opinion stating the basis for
its decision. Vistaprint has appealed 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
21 jurisdictions, including registrations in our major markets of the United States, the European Union,
Canada, Australia and Japan.
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,
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