Vistaprint 2011 Annual Report Download - page 29

availability of financing to a wide variety of businesses, including micro businesses, and the resulting
uncertainty led to reductions in capital investments, marketing expenditures, overall spending levels,
future product plans, and sales projections across industries and markets. These trends could have a
material and adverse impact on the demand for our products and services and our financial results
from operations.
The United States government may further increase border controls and impose duties or
restrictions on cross-border commerce that may substantially harm our business by impeding
our shipments into the United States from our Canadian manufacturing facility.
For the fiscal year ended June 30, 2011, we derived 53% of our revenue from sales to customers
made through Vistaprint.com, our United States-focused website. We produce substantially all physical
products for our United States customers at our facility in Windsor, Ontario, and the United States
imposes restrictions on shipping goods into the United States from Canada. The United States also
imposes protectionist measures such as customs duties and tariffs that limit free trade, some of which
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. We have from time to time experienced delays in shipping our
manufactured products into the United States as a result of these restrictions which have, in some
instances, resulted in delayed delivery of orders.
In the future, the United States could 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. For example, if there were a serious threat to
U.S. security, such as war or an attack on the United States, the U.S. government could shut down
the U.S.-Canadian border for an extended period of time, impose policies that would result in
significant Canadian export delays or otherwise disrupt our North American business operations. If we
experienced greater difficulty or delays shipping products into the United States or were foreclosed
from doing so, or if our costs and expenses materially increased, our business and results of
operations could be harmed.
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, 2011, we had 56 issued patents worldwide. 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, we have in the past and
may in the future face infringement, invalidity, intellectual property ownership or similar claims brought
by third parties with respect to any of our current or future patents. Any such claims, whether or not
successful, could be extremely costly, damage our reputation and brand and substantially harm our
business and results of operations.
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