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Shoe Maker Given Home Court Lawsuit Advantage

(CN) - An Arkansas store that allegedly sold Chinese knockoffs of children's rain boots designed by a Washington shoemaker must face copyright claims, the 9th Circuit ruled Monday.

The case could go forward in Washington because the "known impact" of the alleged copyright infringement occurred there, even though the act itself allegedly occurred in Arkansas, according to the 21-page ruling.

Seattle-based Washington Shoe Co. sold its products to A-Z Sporting Goods in Arkansas from 2007 to 2009 through a salesman. The salesman visited the store regularly, and noticed on one trip that the store was stocking two of Washington Shoe's popular rain boot designs for children, Ditsy Dots and Spider boots - only Washington Shoe had not made the boots.

A-Z admitted that it got the boots from a company in China, leading Washington Shoe's attorneys to send A-Z a few cease-and-desist letters. A-Z eventually sold its remaining inventory to a thrift store, the court said.

Unsatisfied, Washington Shoe filed a federal complaint against A-Z for copyright infringement, trade dress infringement and unfair competition in Seattle.

A-Z moved to dismiss for lack of jurisdiction, claiming that it had no connection to the state of Washington. U.S. District Judge Robert Lasnik agreed and dismissed the case, but a three-judge panel in Seattle reversed on Monday.

"Particularly in the case of a willful copyright infringement, the intentional act constituting the violation may occur solely within one state while the known impact of that copyright infringement is directed at another state," Judge Jay Bybee wrote for a three-judge panel (emphasis in original).

"Here, the question is whether an intentional infringement of Washington Shoe's copyright in its shoes is expressly aimed at the state of Washington, where Washington Shoe has it headquarters and from which it controls its exclusive rights in its copyright," Bybee wrote. "The intentional acts infringing Washington Shoe's copyright likely took place in Arkansas, where A-Z received the infringing boots from a Chinese manufacturer, displayed them for sale, and then - after having been advised that they were knock-offs - sold them to a thrift store. Even if A-Z was not aware of the infringing boots at the outset, A-Z made a bulk sale of the infringing boots after receiving two cease-and-desist letters from Washington Shoe's corporate counsel in Washington. A-Z's intentional acts were expressly aimed at the copyright held by Washington Shoe because A-Z knew that its intentional acts would impact Washington Shoe's copyright by virtue of the cease-and-desist letters it had received. Where A-Z knew or should have known that Washington Shoe is a Washington company, A-Z's intentional acts were expressly aimed at the

state of Washington."

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