Jurisdiction Sought in Chinese Trade Case

     LAS VEGAS (CN) – Before entering default judgment against Chinese product counterfeiters and trademark infringers, Japan-based Toyo Tire and Rubber must show the United States is the proper jurisdiction, a federal judge ruled.
     U.S. Magistrate Judge Cam Ferenbach ruled Monday that Toyo needs to show that counterfeiting and trademark infringement by Chinese companies have sufficient impact on U.S. commerce to demonstrate clearly identifiable injury, with “interests and links to American commerce” strong enough to warrant an “extraterritorial application” of the Lanham Act.
     To extend Lanham Act protection beyond U.S. soil, Ferenbach said, Toyo must demonstrate a conflict with foreign law, the locations of the infringing companies, how compliance might be achieved, and the significance of the infringements’ effect on the United States compared to other locations.
     Toyo also must show the extent to which there is an “‘explicit'” attempt to “‘harm or affect American commerce,'” the predictability of that effect and the “relative importance” of Lanham Act violations in the United States compared to overseas.
     “An analysis of these three requirements (and the seven subfactors) may support” U.S. jurisdiction, but “they were not briefed by Toyo and the court is not in a position to determine on its own whether these factors are satisfied here,” Ferenbach wrote. (Parentheses in ruling.)
     Ferenbach ordered Toyo brief subject-matter jurisdiction and personal jurisdiction by June 29.
     Toyo and two of its U.S. subsidiaries in November sued Japan Toyomoto Tire Corp., Toyomoto (Beijing) International Trading Co. – both of China; Toyomoto Tire (US), a Delaware corporation; and Kabusikiki Tokyo Nihoon Rubber Corp., of Japan.
     Toyo seeks a permanent injunction and damages for trademark counterfeiting, infringement and dilution, cybersquatting and unfair competition.
     Toyo distributes its tires through a network of 2,000 independent tire dealerships. It says it owns a dozen registered U.S. trademarks and sells more than 4.7 million tires per year in the United States.
     It claims the defendants are piggybacking on Toyo’s name and reputation and that the Chinese companies began using the Toyo marks in 2010, on tires, website domain names and social media sites, in which Toyomoto “highlights the word Toyo, further increasing the likelihood of confusion and damage to Toyo.”
     It accused Toyomoto and its subsidiaries of planning to advertise and sell infringing products at the Equipment Market Association Show on Nov. 4-7, 2014 at Las Vegas Convention Center.
     Las Vegas trade shows have become popular venues for Chinese companies to push knockoff products. Several lawsuits have been filed for it, and injunctions issued, sometimes in the middle of the trade shows.
     U.S. District Judge Jennifer Dorsey granted Toyo’s request for an injunction in December after the defendants failed to show at a hearing.
     She order U.S. Marshals to seize specific items from Toyomoto’s booth, including banners, display and promotional items, and any products with infringing marks.
     Toyo is represented by Michael McCue with Lewis, Roca and Rothgerber, who was not immediately available for comment Tuesday.

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