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How to deal with overseas allegations of intellectual property infringement
The problem of safeguarding rights faced by enterprises in China involves not only how to protect their own intellectual property rights, but also how to deal with the allegations of intellectual property rights infringement from overseas. As long as the enterprise itself confirms through evaluation that the consequences of its own business behavior do not directly affect the plaintiff's commercial interests in the court (with the specific state as the boundary), it can take jurisdiction litigation. Enterprises should choose to set up overseas offices or carry out business activities according to actual needs. Enterprises that produce products on the basis of imitation or even plagiarism should not rush to the so-called international market. With China enterprises and their products gradually entering the international market, overseas rights protection involving intellectual property rights has been put on the agenda. Compared with enterprises in developed countries and regions such as the United States, Japan and Europe, the rights protection problems faced by China enterprises involve not only how to protect their own intellectual property rights, but also how to deal with the allegations of intellectual property rights infringement from overseas. We can take two recent intellectual property cases involving enterprises in China as clues to explore the coping strategies of China enterprises when they are accused of intellectual property infringement overseas. Two China enterprises were sued: Shandong Zhaoyuan Linglong Tire Co., Ltd. cooperated with a company in Dubai, United Arab Emirates to produce a rubber tire for mining machinery and sold it to the United States. A Florida company sued the Federal District Court for the Eastern District of Virginia for copyright infringement, trademark infringement and commercial conspiracy. On the premise that the jury found all the charges guilty, the judgment of the court of first instance supported the plaintiff's claim and ordered the two defendants to pay the plaintiff $26 million in compensation and up to $630,000 in legal fees. The two defendants refused to accept the judgment of the first instance and appealed to the Fourth Circuit Court of the United States. After hearing the case, the Court of Appeal partially revoked the judgment of the court of first instance, including accusing the defendant of infringing the plaintiff's trademark rights and constituting a commercial conspiracy, but still supported the judgment of the court of first instance of damages of 26 million US dollars. The plaintiff in China's testing and certification case is Intertek, a company registered in Delaware, USA, which provides product inspection, testing and certification services for the consumer goods industry. The defendant is China Shenzhen Huace Pengcheng International Certification Co., Ltd., hereinafter referred to as "Huace Certification". Its predecessor is CQC Shenzhen Accreditation Center, and it belongs to the same product testing and certification service provider as the plaintiff. The plaintiff found at the Expo held in China that some of the materials distributed by the defendant were actually unauthorized copies of the training materials that the plaintiff enjoyed copyright. At the same time, the defendant's website also claimed to provide some training courses, in which the textbooks used were also the plaintiff's materials copied without permission. Therefore, the plaintiff filed a lawsuit in the federal district court of Connecticut, accusing the defendant of infringing his materials protected by American copyright law. The defendant objected on the grounds that his actions took place in China, so the U.S. Federal District Court had no jurisdiction. The court supported the defendant's objection to jurisdiction through trial. The plaintiff refused to accept the first-instance judgment of the federal district court in Connecticut and filed a lawsuit in the federal district court in Illinois, USA for the same cause. The defendant filed a counterclaim while raising an objection to jurisdiction, requesting the court to award the plaintiff compensation for the lawyer's fees for responding in Connecticut on the grounds that the plaintiff's behavior constituted an unreasonable lawsuit. The decision of the federal district court of Illinois supported the defendant's objection to jurisdiction, but rejected the defendant's claim that the plaintiff should bear his pre-litigation attorney's fees on the grounds that there was no evidence to prove that the plaintiff's behavior constituted indiscriminate prosecution. The defendants in the above two cases both involved enterprises in China, and the alleged infringement occurred in China. Although the defendants all raised jurisdictional objections, the jurisdictional objections in the first case were not supported by the court. After the second filing, the court rejected the plaintiff's lawsuit on the grounds that the American court had no jurisdiction. Why is Linglong's objection to jurisdiction rejected and Huace's objection supported? The jurisdiction of the court can be divided into two categories: personal jurisdiction (or personal jurisdiction) and property jurisdiction (or territorial jurisdiction). In both cases, two China enterprises as defendants argued that the court had no "personal jurisdiction". Therefore, we need to know how American courts determine "personal jurisdiction". Usually, when establishing personal jurisdiction, the nationality and residence of the defendant should be examined first. Once the defendant involved is not a national of our hospital (including citizens and residents), from the main point of view, the case belongs to foreign-related cases; If the court wants to claim jurisdiction over people, it constitutes extraterritorial jurisdiction or long-arm jurisdiction in American law. Although the legislation on long-arm jurisdiction in American States is not exactly the same, it must conform to the principle of "due process" established by the American Constitution. Judges in some cases even explained that judging whether the long-arm jurisdiction can be established ultimately depends on whether the court's exercise of jurisdiction conforms to the principle of "due process" established by the US Constitution 14 amendment. Because the original purpose of extraterritorial jurisdiction or long-arm jurisdiction is to maximize the convenience of national litigation and protect the interests of nationals through the jurisdiction of domestic courts, traditionally, American courts will try their best to find reasons for exercising jurisdiction after receiving the plaintiff's prosecution. Therefore, the principle of "minimum contact" has been gradually established. The so-called minimum connection means that the court must have at least a minimum threshold when exercising jurisdiction over the case. The standards established by the Supreme Court of the United States in relevant cases are usually cited by American courts to determine the minimum connection, that is, the double review of general jurisdiction and specific jurisdiction. Only when these two standards are met can the court exercise its jurisdiction. In the case of Linglong Tire, the court found no evidence that the defendant owned or leased real estate or owned production facilities in the local area, nor did it show that the defendant hired employees directly engaged in production or sales in the local area. It is only considered that the defendant contacted the plaintiff's former employee in the local area and obtained the plaintiff's design drawings from him, and that the employee opened an office in the local area after leaving the plaintiff's company and had substantial contact with the defendant. In addition, the defendant contacted the court to sell infringing products to local users. This means that the contact between the defendant and the court has not actually reached a "continuous and systematic" level. In the case of testing and certification in China, the federal district court of Illinois considered the following factors: Does the defendant own or lease any real estate in the state? Does the defendant have a fixed facility in the United States? Does the defendant employ employees in this state? After trial, the court found that the answers to these three questions were all negative. Of course, in order to tend to exercise jurisdiction, since the 1980s, American courts have introduced another standard of consideration, that is, the expected interest standard, when it comes to infringement cases, including intellectual property rights, without involving the interests of the state and the government. In the case of Linglong Tire, because the court has determined that the defendant intends to take advantage of his activities in Virginia, when it comes to personal jurisdiction, the court particularly emphasized that the fact that the defendant is a foreign company does not mean that exercising jurisdiction over it constitutes a burden for the defendant. On the premise of this assertion, the court deliberately pointed out that the defendant was a former employee of the plaintiff and they met in Florida; The employee stole the plaintiff's tire design from Florida; The defendant also hired the employee to open a design studio in Florida and had a lot of contact with the employee. All this is to finally determine that the defendant has a minimum connection with the state, so that the federal district court of the state can exercise personal jurisdiction over him. In the Huace authentication case, the court held that the court can exercise personal jurisdiction over the defendant only if the following three conditions are met: (1) The defendant has committed intentional infringement; (2) The goal of the act clearly points to the court; (3) The defendant knows that his actions will hurt the plaintiff. It can be seen that the court attaches great importance to the subjective state of the defendant in this case. During the trial, the plaintiff also provided some evidence to prove that the defendant had various contacts with the court, but the court finally rejected the plaintiff's lawsuit on the grounds of lack of jurisdiction. In addition, the courts of the two cases also considered another question, that is, whether the exercise of personal jurisdiction over the defendant conforms to the principle of "rationality" or "traditional fairness and justice." Whether it directly affects American commerce is the key to the jurisdiction of the case. It can be seen from the two cases that although the facts of the two cases are indeed somewhat different, from the perspective of onlookers, the differences between the two cases are not great, but the judgments of American courts are quite different. The substantive difference between the two cases is that the defendant's behavior in the first case directly affected American commerce, that is, the defendant's infringing products directly replaced the plaintiff's products, thus making the plaintiff lose a lot of profit opportunities. This is also the fundamental reason why the jury supported all the plaintiff's allegations without the full consent of the judge, and it also directly led to the court's almost complete support for the plaintiff's claim for compensation when dismissing some of the plaintiff's infringement allegations. In the second case, although the defendant copied the copyrighted materials without permission, the consequences of such copying did not directly affect American commerce. Therefore, the court found that there was insufficient contact between the defendant and the court, and exercising jurisdiction over the defendant violated the principle of fairness and justice. In addition, from the available information, the evidence provided by the parties to the two cases to the court in the course of litigation is very detailed and specific, especially the plaintiff's evidence touches almost all the details of the defendant's business activities, including public and secret activities. Based on the above introduction and analysis, we remind China enterprises to pay attention to the following details when they encounter intellectual property lawsuits filed by foreign enterprises abroad: whether the legality of the case itself can be questioned and whether the jurisdiction lawsuit can win. As long as we confirm through our own evaluation that the consequences of our business actions do not directly affect the plaintiff's commercial interests in the court (with the specific state as the boundary), even if the enterprise has real estate or other facilities in the place, or has other business contacts with the place, it can still conduct jurisdiction litigation. Of course, it should be noted that winning a lawsuit in a foreign jurisdiction does not mean that everything will be fine, because the obligee may also win the case in China. No matter what kind of excuses you put forward, you should tell the truth, and you can't lie or hide the facts. There are two sentences in western culture that must be kept in mind: one is "telling the truth is the lowest cost"; Another sentence is "telling half the truth is equivalent to lying." Whether you lie directly or conceal some facts, once you are identified, you will bring direct adverse consequences to yourself. This is completely different from the dispute settlement mechanism in China. In our country, even if the parties directly lie, the judicial organs can't directly make an unfavorable judgment based on this, but can only make a judgment based on the existing evidence. The preparation of the lawsuit must be practical and meticulous. More importantly, the preparation of evidence must be completed before the trial, and it is not possible to temporarily piece together or submit evidence in time according to the so-called needs like squeezing toothpaste. In the cases tried by American courts, the factual part of a considerable number of cases requires the jury to make a decision. Lying will not only be defeated by the verdict, but also the evidence provided or the facts expounded will not be fully timely, and it may also leave an impression of dishonesty and irresponsibility on the jury, thus making an unfavorable conclusion in the fact verdict. Don't blindly enter overseas markets, especially if you don't have enough intellectual property reserves. We should choose to set up overseas offices or conduct commercial activities according to actual needs. When producing products based on imitation or even plagiarism, do not rush to the so-called international market. Although intellectual property protection is strictly regional, China enterprises can confidently use foreign patents that are not protected by China's patent law in China, but if the related products are exported to patent protection countries, the producers' actions will also be accused of infringement. When it comes to copyright and trademark rights, the so-called regionality has only become the boundary of intellectual property protection in the academic sense. At this time, automatically protecting and stopping unfair competition has become a generally accepted legal system in all countries. In addition, the courts in many countries have begun to implement the long-arm jurisdiction system, and the infringement completed in any country may be the reason for the court where the obligee is located.