Vistaprint 2014 Annual Report Download - page 26

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Intellectual property disputes and litigation are costly and could cause us to lose our exclusive rights,
subject us to liability, or require us to stop some of our business activities.
From time to time, we receive claims from third parties that we infringe their intellectual property rights, that
we are required to enter into patent licenses covering aspects of the technology we use in our business, or that we
improperly obtained or used their confidential or proprietary information. Any litigation, settlement, license, or other
proceeding relating to intellectual property rights, even if we settle it or it is resolved in our favor, could be costly,
divert our management's efforts from managing and growing our business, and create uncertainties that may make
it more difficult to run our operations. If any parties successfully claim that we infringe their intellectual property
rights, we might be forced to pay significant damages and attorney's fees, and we could be restricted from using
certain technologies important to the operation of our business.
Our business is dependent on the Internet, and unfavorable changes in government regulation of the
Internet, e-commerce, and email marketing could substantially harm our business and results of
operations.
Due to our dependence on the Internet for our sales, laws specifically governing the Internet, e-commerce
and email marketing may have a greater impact on our operations than other more traditional businesses. Existing
and future laws, such as laws covering pricing, customs, privacy, consumer protection, or commercial email, may
impede the growth of e-commerce and our ability to compete with traditional “bricks and mortar” retailers. It is not
always clear how existing laws governing these and other issues apply to the Internet and e-commerce, as the vast
majority of applicable laws were adopted before the advent of the Internet and do not contemplate or address the
unique issues raised by the Internet or e-commerce. Those laws that do reference the Internet, such as the
Bermuda Electronic Transactions Act 1999, the U.S. Digital Millennium Copyright Act, and the U.S. CAN SPAM Act
of 2003, are only beginning to be interpreted by the courts, and their applicability and reach are therefore uncertain.
Those current and future laws and regulations or unfavorable resolution of these issues may substantially harm our
business and results of operations.
We face judicial and regulatory challenges to our practice of offering free products and services, which, if
successful, could hinder our ability to attract customers and generate revenue.
At times we offer free products and services as an inducement for customers to try our products and
services. Although we believe that we conspicuously and clearly communicate all details and conditions of these
offers, such as the shipping and processing charges associated with these offers, from time to time we face claims,
complaints, and inquiries from our customers, competitors, governmental regulators, standards bodies, and others
that our free offers are misleading or do not comply with applicable legislation or regulation. If we are compelled or
determine to curtail or eliminate our use of free offers as the result of any such actions, our business prospects and
results of operations could be materially harmed.
If we were required to review the content that our customers incorporate into our products and interdict the
shipment of products that violate copyright protections or other laws, our costs would significantly
increase, which would harm our results of operations.
Because of our focus on automation and high volumes, the vast majority of our sales do not involve any
human-based review of content. Although our websites' terms of use specifically require customers to make
representations about the legality and ownership of the content they upload for production, there is a risk that a
customer may supply an image or other content for an order we produce that is the property of another party used
without permission, that infringes the copyright or trademark of another party, or that would be considered to be
defamatory, hateful, obscene, or otherwise objectionable or illegal under the laws of the jurisdiction(s) where that
customer lives or where we operate. If we were to become legally obligated to perform manual screening of
customer orders, our costs would increase significantly, and we could be required to pay substantial penalties or
monetary damages for any failure in our screening process.
We are subject to customer payment-related risks.
We accept payments for our products and services on our websites by a variety of methods, including
credit or debit card, PayPal, check, wire transfer or other methods. In some geographic regions, we rely on one or
two third party companies to provide payment processing services. If any of the payment processing or other
companies with which we have contractual arrangements became unwilling or unable to provide these services to