Exhibitions have become one of the indispensable and important ways for Chinese enterprises to "go global" and explore the international market in the United States, so overseas exhibitions have also become a high incidence of intellectual property disputes.Author |Yang Guoxu, China Council for the Promotion of International Trade Patent and Trademark Office.
Edit |Bruce.
The United States is a big country in the exhibition industry, and every year there are very important exhibitions held in the United States. For example, the International Consumer Electronics Show (CES) in Las Vegas, the World Agricultural Show in the United States (World AG Expo), the International Housewares Show (WSA) in Chicago, and so on. The United States has always attached great importance to the protection of intellectual property rights in exhibitions. Exhibitions have become one of the indispensable and important ways for Chinese enterprises to "go global" and explore the international market in the United States, so overseas exhibitions have also become a high incidence of intellectual property disputes. In order to help Chinese enterprises cope with the problems that may be encountered in participating in the United States, the following is a brief report on the protection of intellectual property rights at exhibitions in the United States.
1. Overview
The United States is a federal case-law country with a very complex legal system. There are two basic points that should be paid special attention to:The first is the question of the relationship between federal law and state law, in particular, the common law of the states is generally formed by precedents, while federal law is primarily statutory law, supplemented by common law. In general, federal law is superior to state law. The second is the relationship between enactment and precedents。In the United States, precedent is an important source of law. Precedents relating to statutory law serve two functions, the first is to interpret the law, and the second is to create the law.
The scope of protection under U.S. intellectual property law is mainly in the following categories:
1.Patent. 2.Trademark.
3.Copyright. 4.Trade secret.
5.Layout design rights and breeding rights of integrated circuits, etc.
In the United States, once an infringement of intellectual property rights occurs, the right holder can usually resolve it through negotiation with the alleged infringer, and if the negotiation method is invalid, it can generally be resolved through civil litigation. For patent infringement, the right holder requests the court to grant a temporary injunction, a permanent injunction and an award of monetary compensation through a civil lawsuit. For intentional infringement, the court can award up to three times the punitive damages. In addition, the right holder can also seek relief through quasi-judicial administrative enforcement measures. Under Section 337 of the U.S. Act, if a foreign company's products exported to the U.S. infringe U.S. intellectual property rights, the rights holder may file a request for investigation with the International Commission (ITC). After investigation and verification (referred to as "Section 337 investigation"), the ITC may issue a compulsory exclusion order or injunction, and the Customs will take corresponding measures to seize the infringing products. For trademark infringement or copyright infringement, in addition to injunctive and monetary relief, the infringer may also be sentenced to a certain penalty.
2. Preparations before participating in the U.S. exhibition
First of all, it is necessary to take precautions to avoid infringement and being found to be intentional infringement.
The amount of compensation for patent infringement in the United States is generally very high, and can easily reach more than one million or tens of millions of dollars. If found to have committed intentional infringement, punitive damages of up to three times may be awarded. In order to avoid patent infringement as well as intentional infringement, attention should be paid to the following:
1 Chinese enterprises should first pay great attention to preventing infringement of others' intellectual property rights, especially patent rights. Foreign trade enterprises that export in the form of OEM and OEM should also pay attention to whether the foreign businessman who placed the order has the supporting documents of the trademark, patent, copyright and other rights of the product. If the foreign investor is neither the right holder nor does not have the appropriate authorization documents, the legal risks should be considered and the exemption clause should be insisted on in the contract. It is stipulated that if a dispute arises due to intellectual property rights, the contractor shall be responsible for the loss. However, in fact, it is difficult to fully compensate for the joint and several losses caused by the infringement lawsuit. It is better for the entrusted party to be cautious.
2 When Chinese companies plan to produce products for export to the United States, they first conduct a search in the relevant technical field and conduct a non-infringement analysis, the so-called FTO (Freedom to Operate) search and analysis. One way to avoid being convicted of intentional infringement is to exercise a duty of care, such as having a U.S. patent attorney issue a legal analysis of non-infringement. If this can be done, it is generally unlikely that the court will find that the infringement is willful. In recent years, U.S. patent infringement cases have shown that even without a lawyer's legal opinion, as long as there are reasonable grounds to believe that the patent in question is invalid and therefore does not constitute infringement, it may not be considered intentional infringement by the court. Even so, it is still a good idea to have a legal opinion from a U.S. patent attorney before entering the U.S. market. If the possibility of infringement is found, the product should be designed to be circumvented in time. For patented technologies that cannot be circumvented, either abandon the export plan or try to negotiate with the patentee. Explore the feasibility of taking measures such as payment of license fees, purchase of patents, or joint ventures and partnerships.
3. Intellectual property disputes and coping strategies in U.S. exhibitions
Does participating in an exhibition in the U.S. and exhibiting products infringe on someone else's intellectual property rights?The answer is yes. For example, Section 271 of the U.S. Patent Act provides for patent infringement that "a patent infringement occurs when a patent is manufactured or used, offered for sale, or sold in the United States without permission, or imports the patented product from a foreign country into the United States." According to Section 289 of the U.S. Patent Act, "any person who, during the term of the patent right for a design, (1) adopts the patented design or a remarkable imitation of the patented design in a product for the purpose of sale without obtaining a license from the patentee;(2) ** or for the purpose of ** displaying imitations of such appearance or such discrept imitations...."All of them constitute infringement of the design patent right. Exhibiting at an exhibition may be regarded as an act of "offering to sell" or even an "act of selling". Thus constituting patent infringement.
Since exhibitions are usually short-lived, the most effective way for rights holders to exercise their rights is to apply to the court for a temporary injunction. Together, a temporary restraining order and a preliminary injunction are referred to as "interim injunctions".
1) Temporary restraining orders. According to Rule 65 of the Federal Rules of Civil Procedure, in order to effectively stop an imminent infringement, the right holder may apply for a temporary restraining order. The conditions for obtaining a temporary restraining order are the same as for a preliminary injunction, and the applicant must demonstrate: the likelihood that the applicant entity will prevail;whether the applicant will suffer irreparable harm if the injunction is refused;whether the applicant's damage is greater than the damage suffered by the counterparty as a result of the issuance of the injunction;whether it affects the public interest. If the results of the assessment of these four factors show that the applicant is favourable, the judge may issue a temporary restraining order on the same day. When applying for a temporary restraining order, a guarantee should be submitted, and the amount shall be determined by the court, which is roughly the losses or expenses that the counterparty may suffer as a result of the temporary restraining order. However, if the court considers that the relevant risk does not exist or the risk of damage to the applicant is much greater than that of the counterparty, it may waive the guarantee claim. When certain conditions are met, a temporary restraining order may be issued unilaterally without prior notice to the counterpart. In the case of an ex parte issuance of a temporary restraining order, the counterparty may apply for revocation or modification of the temporary restraining order two days after the issuance of the temporary restraining order (the court may also stipulate a shorter period). The Tribunal shall hear and rule on this matter as soon as possible. If a restraining order is issued without prior notice to the counterparty, the court should hear the application for a preliminary injunction as soon as possible. After a hearing, the judge will decide whether to rescind the temporary restraining order or grant a preliminary injunction. If the petitioner does not proceed to apply for a preliminary injunction or sue at the time of the hearing, the court will vacate the temporary restraining order.
2) Preliminary injunction. A preliminary injunction is applied after the commencement of proceedings and before judgment to prevent the defendant from engaging in a particular act. The preliminary injunction must be notified to the counterparty and go through a hearing process. Guarantee must also be provided when applying for a preliminary injunction. However, if the counterparty provides a corresponding counter-guarantee, the injunction may not be imposed. An appeal can be filed against a preliminary injunction. Interim injunctions for patent infringement are relatively difficult to obtain. Because it is difficult to judge the validity or infringement of a patent based on prima facie evidence, once it is finally determined that there is no infringement, it may cause irreparable losses to the counterparty. Since the application for a temporary injunction requires certain conditions to be met, security is required, and the counterparty can be notified in advance or a hearing can be held within a short period of time afterwards, it is not very easy for the U.S. intellectual property owner to use this to fend the alleged infringing exhibitor.
In the U.S., cases heard in state courts can be enforced before litigation, but cases heard in federal courts cannot be enforced until after the lawsuit has been filed. Therefore, the temporary injunction at the exhibition can be combined with these measures to regulate the exhibitor who is suspected of infringement. Rule 64 of the Federal Rules of Civil Procedure provides that in the course of the commencement or conduct of the proceedings, in order to ensure that evidence is not destroyed or transferred in future proceedings, or that the judgment in favour of the applicant is successfully enforced, the court may take appropriate measures, such as seizure of goods, freezing of accounts, detention of persons involved in the case, etc., the specific type of which is determined by the law of the state where the court is located.
If a Chinese company is sued for infringement in a U.S. court, it can consider the following countermeasures:
1.Raise a jurisdictional objection
The jurisdiction of U.S. courts can be divided into two categories: personal jurisdiction (or personal jurisdiction) and jurisdiction in rem (or territorial jurisdiction). Under normal circumstances, the first thing to be examined in the establishment of jurisdiction over a person is the nationality and domicile of the defendant. Once the defendant involved in the case is not a national (including citizens and residents) of the forum, the case is a foreign-related case from the subject point of view. If a court wants to assert jurisdiction over a person, it constitutes extraterritorial jurisdiction or long-arm jurisdiction under U.S. law. While the legislation on long-arm jurisdiction is not identical across U.S. states, it must be consistent with the principle of "due process" established by the 14th Amendment to the U.S. Constitution. Since the initial purpose of extraterritorial jurisdiction or long-arm jurisdiction is to facilitate litigation by its own nationals and to protect the interests of its nationals to the greatest extent possible through the jurisdiction of its own courts, it has traditionally been the case that United States courts have sought to find as many reasons as possible to exercise jurisdiction after receiving a complaint filed by a plaintiff. To this end, the principle of "minimum link" was gradually established. The so-called minimum link requires that the court should at least have a minimum threshold when exercising jurisdiction over the case. The standard established by the U.S. Supreme Court in relevant cases is often invoked by U.S. courts to determine the minimum link, i.e., the double review of general and specific jurisdiction. Only when both criteria are met can the court exercise jurisdiction. If a Chinese company manufactures products in China and does not have an operating entity in the United States, it can file a jurisdictional objection and ask the court to dismiss the plaintiff's lawsuit.
2.Filing a request for patent invalidation
In the U.S., there are two ways to invalidate a granted patent, either by filing a petition with the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (USPTO) or directly by filing a petition for invalidation in the federal district court where the patent infringement lawsuit is heard.
The PTAB is a new body established by the United States Patent and Trademark Office (USPTO) after the enactment of the America Invents Act (AIA) in September 2011 to replace the original "Patent Litigation and Conflict Committee (BPAI)". The PTAB has reformed the inter partes reexamination procedure, which involved patent validity examinations, and established a new inter partes review (IPR). Under the provisions of the procedure, a person other than the patentee may file a request for invalidation of the IPR proceedings with the PTAB. After studying the invalidation request and the right holder's defense, the collegial panel is required to make a decision on whether to initiate the IPR within 6 months, and once the decision is made to initiate the IPR proceedings, the PTAB needs to make a written decision within 12 months unless there are legitimate and reasonable reasons for the extension. The new time frame is significantly shorter than the original average of 2-3 years, and the cost is significantly reduced. After the establishment of the new IPR procedure, compared with the disadvantages of long court proceedings and high costs, IPR procedures have the advantages of strong professionalism, short time and low cost. As a result, the IPR procedure for the PTAB quickly became the preferred procedure for invalidating patents in the United States.
U.S. courts can hear infringement proceedings at the same time as invalidation proceedings before the U.S. Patent and Trademark Office. The alleged infringer may request the court to suspend the case, and the judge has the discretion to decide whether to suspend the litigation. Because of the speed of the inter part's reconsideration process, many judges are willing to suspend the simultaneous court proceedings in order to save litigation resources, which will also save the parties litigation costs.
3.Defenses of Non-Infringement
By analyzing and interpreting the plaintiff's claims, it can be proved that the alleged infringing product lacks the necessary technical features, or that the technical features recorded in the plaintiff's patent claims are neither the same nor the same, and it can also be proved that the plaintiff has made statements that narrow the scope of patent protection or modify or apply the principle of estoppel in the process of applying for a patent or invalidation proceedings, resulting in the non-application of equivalence. In addition, the defendant can also raise a defense of non-infringement by proving that the prior art is being implemented.
4.Patents are unenforceable
Patent inenforceability is a special regime in U.S. patent law. The patent that is judged to be inexercisable continues to be valid but cannot be exercised, and the right holder cannot exercise its rights on the basis of the patent. This can be demonstrated from the point of view of improper conduct or abuse of patent rights in the granting process.
There are many other defenses in intellectual property litigation in the United States, which need to be analyzed on a case-by-case basis, and can be jointly studied and determined with ** lawyers. I won't go into detail here.
IV. Conclusion
Chinese companies must actively prepare for the U.S. exhibition. Understand the IP landscape in your industry, especially your competitors. After professional analysis and processing, the risk of infringement is minimized. Once you encounter an intellectual property infringement dispute during the exhibition, you must consult a professional with experience in handling intellectual property disputes in a timely manner. According to the advice of professionals, formulate a good coping strategy and form a good response team. Only in this way can we change from passive to active, reduce unnecessary losses, and also reduce the cost of responding to lawsuits, so as to achieve twice the result with half the effort.
Author |
Yang Guoxu
China Council for the Promotion of International Trade Patent and Trademark Law Firm.
New York Office New York Representative Office.
(This article only represents the author's point of view and does not represent the position of intellectual property).