International Intellectual Property Disputes Arising Out of Las Vegas Trade Shows: The Important Role of Our Federal Court
04/01/2008

Article originally appeared in Communique on 4/1/08

The United States District Court for the District of Nevada in Las Vegas serves an important role in cross-border intellectual property disputes. According to the Las Vegas Convention and Visitors Authority, Las Vegas hosted more than 23,000 conventions in 2007, generating more than $8 billion in non-gaming revenue. Many of these conventions, including the Consumer Electronics Show, the World Shoe Association show, CONEXPO-CON/AGG, and the MAGIC show, draw exhibitors from around the world. Intellectual Property disputes often arise in connection with Las Vegas trade shows when exhibitors display products that allegedly infringe the trademarks, patents, or other intellectual property rights of other exhibitors. These disputes frequently result in litigation in the District of Nevada, placing our federal court in the role of deciding international disputes over intellectual property.

Emergency Relief against foreign defendants

Intellectual property owners often seek emergency injunctive relief based on infringing conduct at Las Vegas trade shows. Time is of the essence in trade shows disputes, because the shows generally last only a few days. the accused foreign infringer frequently does not have a regular presence in Las Vegas (or in the United States) apart from appearances at trade shows. If an intellectual property owner cannot obtain immediate relief against a foreign business marketing infringing products or using infringing trademarks, then the intellectual property owner may be deprived of any effective remedy. By the time the show is over, the damage has been done. the foreign infringer has marketed the infringing products or has used the infringing mark at the show. At the end of the show, the foreign infringer packs up and leaves the United States to return home to fill the orders placed at the show ot to follow up on leads generated at the show. Accordingly, during trade shows, domestic and foreign owners of US intellectual property rights must be able to obtain emergency injunctive relief against foreign infringers to have an effective remedy.

The District of Nevada serves the important role of promptly addressing requests for emergency relief in these cases. the District of Nevada generally considers motions for temporary restraining orders within one to two days of filing. In appropriate cases, the District of Nevada will enter orders authorizing cases, the District of Nevada will enter orders authorizing the seizure of infringing products, as well as evidence of the infringement. When the intellectual property owner establishes that immediate and irreparable injury will result, and there is not enough time to notify the foreign defendant to there is a risk that evidence will be concealed or destroyed, the Court may enter a temporary restraining order without prior notice to the foreign defendant.  However, in such cases, the defendant has the right to seek dissolution of the temporary restraining order upon only two days notice. Furthermore, the court usually requires the intellectual property owner to post a bond to pay any costs and damages suffered by the foreign defendant in the event that the seizure and injunction is later held unlawful.

Service of process on foreign defendants

The court must also address the issue of service of the process on the foreign defendant in connection with an emergency request for relief arising out of the defendants activities at a trade show. Federal Rule of Civil Procedure 4f provides three means for serving foreign defendants founf outside of the United States:

1. compliances with an international treaty, such as The Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents (the "Hague Convention)

2. service of "letters rogatory" in compliance with Rule 4f

3. other methods of service " as may be directed by the court."

Because service in compliance with the Hague Convention, similar international treaties, or letters rogatory may take months to accomplish, such service is impractical in cases against foreign defendants arising out of trade shows and may undermine the purpose of obtaining emergency relief. However, if the foreign defendant is present at the trade show, Rule 4f does not apply and the plaintiff need to comply with the Hauge Convention. Service upon the foreign defendants or its agents in the forum state is generally effective absent any state- specific prohibitions. ("The Hague Convention applies only where process is actually served in a foregin country. Where service is properly effected in the forum nation, the Convention is wholly inapplicable.") Alternatively, if the foreign defendant or its agents cannot be identified within the forum, upon motion, the court mat allow alternative service by other means, including email and/or facsimile. Thus, under exigent circumstances, the court is likely to order service by alternative means to ensure that the foreign defendants receive prompt and adequate notice of the action.

Personal jurisdiction over foreign defendants

The general principles for personal jurisdiction (including the dual framework of general and specific jurisdiction established in Helocopteros Nacionales de Comlumbia apply in cases against foreign defendants. This, the foreign defendants must have "substantial, continuous and systematic contacts" with the forum state or the claim against the foreign defendant must arise out of the foreign defendant's activities in the forum state

Some foreign defendants who have been sued int eh District of Nevada argue that the court cannot exercise personal jurisdiction over them based on their appearance at the trade show in Las Vegas, even when the intellectual property owners' claims arise from the forein business activities at the trade show. Notwithstaning these arguments, courts generally have exercised personal jurisdiction in such cases. "For jurisdiction to attach, it is sufficient fo rgoods to be offered in the hopes of eventual sales and for the defendant to enageg in discusssions leading to the formation of business contracts with prospective customers. The District of Nevada has recognixed that "asingle contact with the forum state... can be a sufficient basis upon which to establish [personal] jurisdiction over the defendant. The central question is whether the defendant's contracts with the forum state relate to the "subject matter of the action."

Even if the courts finds that a particular foreign defendant contacts with Nevada are insufficient to support personal jusrisdoction in a trade show case, the court may still exercise personal jursidction over the foreign defendant under Rule 4k2 of the Federal Rules of Civil Prodecure based upon the foreign defendants aggregate contacts with the United States as a whole. Rule 4k2 was intended to address the situation in which a foreign defendant in a federal question case seeks to avoid jurisdiction by claiming to have insufficient contacts with the forum state. The exercise of personal jurisdiction under Rule 4k2 is appropriate where:

1. the claim against the defendant arises under federal law

2. the defendant is not subject to the personal jurisdiction of any state court of general jurisdiction

3. the exercise of personal jurisdiction comports with Fifth Amendment principles of due process.

Finally, when the foreign defendant is personally served in the jurisdiction, such as during a trade show, this establishes personal jurisdiction over the defendant based on so-called transient or "tag" jurisdiction. In Burnham v. Superior Court of California, 495 US 604 (1990), the Supreme Court in a plurality opinion concluded that a defendant served with process while visiting California was subject to personal jurisdiction of a Calfiornia court, regardless of the extent of his contacts with California. 495 US at 610-11. Under Burnham, a court acquires personal jurisdiction over any non-resident defendant that is served in the forum, regarless of whether the defendants is resident of another state or another nation.

If the District of Nevada declines to exercise personal jurisdiction over foreign companies that exhibit at trade shows in Las vegas, the foreign companies would be free to market and sell infringing products at Las Vegas trade shows without fear of suit. Moreover, intellectual property owners seeking temporary restraining orders against such infrngers at trade shows would have no effective means of obtaining relief, because it is highly unlikely that they would have the time to seek emergency relief in a foreign country or in another state in the United States in which the foreign company may be subject to personal jurisdictions may not have any effective means of enforcing an injunction in Las Vegas involving a trade show here. Accordingly, the District of Nevada frequently and appropriately exercises personal jurisdiction over foreign defednants in such cases.

Conclusion

The District of Nevada has established an expeditious and fair process for handling international intellectual property disputes, which serves an important role in Las Vegas continuing dominance as the hose of international trade shows.

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