United States: IP Fridays - Episode 28: Interview With Annamarie A. Daley – Foreign Parties In US IP Cases – Designation Of US And JP In The Hague System Possible – Apple Fends Off Patent Case In China

Last Updated: May 18 2015
Article by Rolf Claessen and Kenneth Suzan

Podcast: Play in new window | Download (Duration: 29:58 — 17.4MB)

Ken conducted a very helpful interview with Annamarie A. Daley about foreign parties in US intellectual property cases. Designation of US and JP is now possible in the Hague System for design protection. Apple fends off patent infringement case before the Beijing Higer Court in China.

Episode 28 – May 15, 2015

RC =   Rolf Claessen

KS =    Kenneth Suzan

Hi.  This is Mark Lemley from Stanford Law School and you are listening to IP Fridays.

KS:      Hello and welcome to this episode of IP Fridays.  Our names are Ken Suzan and Rolf Claessen and this is THE podcast dedicated to Intellectual Property.  It does not matter where you are from, in-house or private practice, novice or expert, we will help you stay up-to-date with current topics in the fields of trademarks, patents, design and copyright, discover useful tools and much more.

RC:      Welcome to Episode 28 of IP Fridays.  Both Ken and I returned home safely from San Diego where the INTA meeting was held in the beginning of May.  We had a fantastic IP Fridays meet-up with listeners and also guests of the show.  We would like to find some pictures and post them when this episode is published.  During this meet-up we tried to get some ideas for topics that could be part of the future IP Fridays episodes.  We got a suggestion from our listener, Ed Timberlake, who actually was also a guest on the show a while back.  Ed suggested that listeners and guests of the show could actually conduct their own interviews with interesting people in the field of Intellectual Property and then send it to us and we would include that into future episodes.  We are very excited about this idea and maybe before you conduct an interview, let us know so that we can talk about the technical infrastructure, you know, what kind of recording devices we use to achieve the best possible audio quality.  Besides that, we are very happy to have your interviews featured on our show so feel free to think about this possibility and let us know ahead of time if you want to interview someone.

Since Ken and I both attended the INTA meeting in San Diego, we took the chance to have a photo shoot of the two of us so we are actually posting some pictures to the show notes of this episode.  If you want to see pictures of the two of us, you can head over to www.ipfridays.com and just go to the show notes of the latest episode.  I will try to work on the cover art and pictures on our different social media channels to update them with the new photos of the two of us.

Our interview guest for today's show is Annamarie Daley.  She is a partner in the Minneapolis office of Barnes & Thornburg LLP and she serves as a co-chair of the firm's Antitrust and Competition Law Practice Groups.  Since she was frequently involved in IP cases involving foreign parties, she will tell us about the specialties that have to be considered and trends with these kinds of IP lawsuits involving foreign parties.

Before we jump into the interview, I just want to let you know that the Unites States of America and Japan can now be designated in the International Design Application of the Hague System.  As you might know from the episode of two weeks ago, the Hague System administered by WIPO allows applicants from all over the world to file design applications in many countries.  So you can file one application and designate a multitude of countries and also regions like the EU.  The United States of America and Japan have ratified everything and as of May 13, 2015 it is possible to designate these two new countries which are probably quite significant for many applicants.  If you want to learn more about the particular requirements for the Hague System applications designating the U.S., you can tune into Episode 27 where I had the chance to interview Dave Gerk from the USPTO who is overseeing the efforts of the USPTO joining the Hague Agreement and in particular the specialties regarding the U.S., you can listen to Episode 27.

I also wanted to tell you about a recent case where Apple won a patent case in China.  In this case, Apple was the defendant.  Shanghai Zhizhen Network Technology Company had previously claimed that Apple's Siri had copied its own patents and the technology of this Chinese company is already used by major Chinese telecommunication companies such as China Telecom or China Unicom Hong Kong or China Mobile.  So Shanghai Zhizhen Network Technology Company sued Apple in June 2012 over infringement of their patents prompting Apple to petition China's State Intellectual Property Office asking them to invalidate Zhizhen's patent for their technology.   On the 27th of April, 2015, the Chinese High Court sided with Apple and denied the complaint of Shanghai Zhizhen Network Technology Company so now this company has appealed and probably they will meet again at the Supreme Court in China.  If you want to read more about this, you can go to www.ipfridays.com/appleinchina.

In the beginning I promised you a really cool interview with Annamarie Daley so without further ado, let's jump right in.

KEN SUZAN'S INTERVIEW WITH ANNAMARIE DALEY:

KS:      Rolf, I am joined today by Annamarie Daley who is a partner in the Minneapolis office of Barnes & Thornburg LLP where she serves as co-chair of the firm's Antitrust and Competition Law Practice Groups and is a member of the Litigation and Intellectual Property Law Departments. Annamarie focuses her practice on complex commercial litigation, federal regulatory and intellectual property law matters.  She has experience with numerous different industries and areas of the law, and she has defended her clients' legal rights in jurisdictions across the United States.

Over several decades, Annamarie has represented clients in federal and state antitrust, consumer protection, deceptive trade practice, and data privacy matters, as well as nationwide class action and intellectual property litigation. She has helped clients secure high-profile verdicts and summary judgments in numerous cases.

Ms. Daley received her J.D. cum laude from the University of Minnesota Law School in 1984, where she was a Truman Scholar and completed a judicial externship with the Honorable Suzanne Sedgewick of the Minnesota Court of Appeals.  Annamarie has decades of experience as an intellectual property attorney and we are honored to have her on this program.  Welcome Annamarie to IP Fridays.

AD:     Thank you very much Ken.  I am excited to be here.

KS:      Excellent.  Annamarie, in connection with the intellectual property cases that you have litigated, can you tell me if you have seen any trends in the Federal Court's exercise of jurisdiction over foreign defendants?

AD:     Well, I had the opportunity to be involved in a number of intellectual property cases involving foreign companies as defendants or co-defendants or even as plaintiffs and what we are seeing is that the United States Supreme Court has been moving really to restrict the jurisdiction of U.S. Courts when it comes to exercising their power to make legal decisions and obtain judgments against foreign corporations.  When it comes to intellectual property cases, you think about it from the U.S. perspective, a lot of times products are manufactured abroad by a foreign corporation and then they might be imported by a distributor or a dealer or even a subsidiary of that foreign corporation and if you are thinking about filing, for instance, a patent infringement lawsuit, you are interested in trying to gain access to the information about the invention process, the design process and that information may be held in the hands of that foreign corporation and so you need to think about the jurisdictional issues and whether or not you will be able to get a U.S. Court to exercise jurisdiction over a foreign manufacturer if you decide to bring a lawsuit.  You may not be able to just use an argument that the U.S. subsidiary that is the marketing arm provides you with sufficient activities in the home state to have the Court exercise jurisdiction over a foreign corporation.

About a year ago the U.S. Supreme Court unanimously entered a decision in a case entitled, Daimler AG v. Bauman.  In that case, the U.S. Supreme Court restricted the jurisdiction of U.S. Courts to hear cases brought by foreign plaintiffs against foreign defendants for conduct occurring outside of the U.S. and that decision was consistent with prior decisions where the U.S. Court was restricting the jurisdiction of our U.S. Courts to exercise jurisdiction.  In particular, the U.S. Supreme Court was concerned about the principals of comity — whether or not U.S. Courts should be exercising that jurisdiction.  The decision in the Daimler case was consistent with the Court's prior decision in 2011 in the Goodyear Dunlop Tires v. Brown case where the U.S. Supreme Court stated that for the exercise of general personal jurisdiction over a defendant to be valid, the defendant must be essentially at home in that forum and that Courts should be careful in exercising jurisdiction over foreign corporate defendants.  So as you are thinking about whether or not you want to add that foreign entity as another defendant to your case, you need to carefully consider whether or not, under the recent Supreme Court decisions, you are going to be able to obtain jurisdiction over the foreign corporation.  The mere fact that a subsidiary has sizable sales in a particular form will not be sufficient to justify the exercise of general jurisdiction.  You are going to need to have a situation where that particular corporation's contacts with the state are still continuous and systematic as the Court has said as to render it essentially at home in that state.

KS:      Let's talk about service of process, Annamarie.  How do you go about serving a foreign defendant with process?  Are there any challenges let's say that litigators face?

AD:     Well, there are a number of challenges and, of course, given the global economy that we live in today, it's not uncommon for us to have a foreign entity, a foreign corporation, or even a foreign individual involved in a claim that we want to bring here in the U.S.  Under our U.S. laws, of course, we are required to affect what is called Service of Original Process against all defendants.  People may not necessarily pay attention to this but it is very important, especially if you are facing any kind of statute of limitation or latches or estoppel issues.

The main international way to obtain service of process is through The Hague Convention on the service abroad of judicial and extrajudicial documents which generally gets referred to, and is commonly known, as The Hague Convention.  That is a treaty that was formulated back in 1964, and the U.S. ratified it in 1967, so it has been around a long time.  The purpose of The Hague Convention was to establish a process whereby documents being served abroad could be served under our U.S. rules and to insure that defendants that were in foreign jurisdictions would receive actual and timely notice of the lawsuit.  There are currently about 63 signatories to The Hague Convention and, although not all of the countries that have agreed to The Hague Convention have agreed to all parts of The Hague Convention, so if you have a foreign corporation in a particular country, you will want to check to determine whether or not the country in which that foreign corporation is located is actually a signatory to The Hague Convention.  If so, then you will be able to attain service under The Hague Convention.  There are many very specific requirements to obtain service under The Hague Convention.  You need to check the specific rules for each country and make sure you dot your I's and cross your T's to make sure that you have complied with them.  For instance, in a number of countries, you are going to be required to translate the Complaint and the documents attached to your Complaint into the official language of the country in which service is to be attained.  You then will provide that document to the designated central authority for that particular country.  The central authority then is the entity in that country that would arrange for service in whatever manner is deemed appropriate within that country and then the Certificate of Service will actually be provided back to you from that central authority and you then can file that Certificate of Service from that particular country's central authority with the U.S. Court as proof of your service of process.

KS:      Very interesting.  Now, with respect to discovery, once the case...

AD:     Can I go back?  There is one more thing that I think is very important to think about when it comes to service of process and I apologize because I meant to mention this before.  If you have a particular company that exists and can be found in several different countries, you will want to look at the particular rules for service of process to determine which one might be easiest to obtain.  But you are also going to want to consider another aspect as you are thinking about which country to obtain service in and that is the issue of, if you are successful and you end up with a judgment, but the assets of that foreign corporation or most of the assets of that foreign corporation are located in another country, you may want to think about whether you should accept your service of process in the particular country where the assets are located, or most of the assets are located, and also the country that will allow you the easiest ability to enforce the judgment.  It is very important.  You have to think about what is your objective in the case from the very beginning and you can't wait until the very end because you could end up with that proverbial worthless piece of paper in the form of a judgment from a U.S. Court that becomes completely unable to obtain any assets to enforce the judgment against.

KS:      Ok.  Now with respect to discovery, can a party get the same type of broad discovery that is permitted in the U.S. Courts against a foreign defendant?

AD:     Well, if the foreign defendant has representatives here in the U.S., then you should be able to obtain discovery against those individuals in the U.S. under our U.S. rules.  However, if the foreign corporation has employees in another country, you may be restricted.  There are a number of things to take into consideration in terms of obtaining discovery against foreign corporations and you need to start planning your discovery efforts early on in the case in order to be able to obtain that information.  For instance, if you have former employees of a foreign corporation that are important to obtain discovery from, your ability to obtain that information will be restricted in a number of ways.  First, you will need to obtain permission from the U.S. Court to obtain a discovery through something that is called a Letters Rogatory or a Letter of Request.  You will want to work with lawyers in the country where that individual is located or that company is located so that you can insure that the Court Order you receive from the U.S. Court will be honored by the Court in that foreign country because you will need to obtain assistance, and I put assistance in its legal manner, from that foreign Court in order to obtain the discovery from that foreign individual or from that foreign corporation in the foreign country.  These rules can vary in many different ways.  The types of questions that you can ask the witness may have to be approved in advance by the Court in the foreign country.  I've been in matters involving discovery from a Japanese companies third parties and you can be required to provide all of your questions in advance and those questions then would be asked by a Japanese judge in a Japanese court.  The particular Japanese judge may or may not feel restricted to the list of questions that are provided and may go off script and ask additional questions or ask follow on questions.  If you are in the UK, the deposition may be conducted or monitored by what we would considered to be a special master in the U.S. and that special master or judge may ask additional questions and may be there to actually monitor the process.  In addition, in terms of these restrictions, the foreign corporations may have the opportunity to challenge the request from the U.S. Court to the foreign court for assistance in obtaining the discovery so you can end up with a discovery battle in the U.S. in the first instance to obtain the Order from the U.S. Court permitting the deposition to proceed with the assistance of the foreign court and then a separate battle in the foreign court about whether or not that U.S. Court Order will even be honored or if it is honored in what form it will be honored.  So it can take months if not a year process to obtain all of the court proceedings that are necessary in order to proceed forward with what we would consider to be pretty standard depositions in the U.S.  As a result, of course, as you are thinking about your trial, you are going to need to want to make sure that whatever information you obtain is going to be admissible and most useful for your ultimate trial in the U.S. and so videotaping the depositions can be a very useful tool.  You may need to obtain special permission from the foreign court in order to videotape.  Additionally, the kind of discovery that we could have in terms of the documents can be very restricted in a number of foreign countries.  You are not likely to be able to have a broad range of document requests accompanying the deposition order, the Court Order, and there may be limits on the amount of time that can be taken for the deposition as well.

KS:      Annamarie, I know that e-mails often play a key role is discovery; a review of the e-mails as part of the case.  What about text messages?  We see everyone texting these days.  Do the same rules apply or are there any challenges in getting text messages or social media chats?

AD:     Well, if a foreign corporation is a defendant in the case, it would be jurisdiction over the foreign corporation and serve them with appropriate process appropriately before the U.S. Court, then you should be able to get discovery of the documents that exist in that foreign corporation's files except in situations where you may have restrictions in the particular country regarding particular types of information.  There are data privacy acts in various countries, including places like Austria, that could perhaps limit your ability to get access to information and so you will, again, want to check with a local lawyer in that country to find out whether or not there are going to be any particular restrictions that apply.  You will also want to make sure that you address the issue of whether a foreign corporation is going to provide you with a broad discovery in the context of any of the discovery conferences that you have with U.S. counsel for that foreign corporation in your U.S. case.

KS:      Great.  Are there any special considerations that one should evaluate as you develop and implement your trial strategy?

AD:     We are lucky, I believe, in the U.S. because of our diverse population and in many locations the jury pools come from very diverse groups of people and so as our citizens become more global I think the concern that some foreign corporations may have about biases against foreign entities should be abated.  On the other hand, I had the opportunity to try a case where the co-defense, actually two co-defendants were foreign corporations at the same time that the Timothy McVeigh case was being tried back in the late 90's in Denver Federal Court and it was a time, as you can imagine, where there was a lot of pro-American sentiment and concern about anti-American sentiment was going on in the courthouse.  So it is just something that you need to take into consideration the various effects and various activities that are going on inside and outside of the courtroom as you prepare for your trial.

KS:      Then, finally, as we draw to a close of this interview, can you tell me once you get the judgment in a U.S. Court, how do you actually enforce that judgment if the assets needed to satisfy the judgment are located in a foreign country?

AD:     It can be very difficult.  You will want to determine whether or not the country that has the assets of the foreign corporation has signed a treaty with the U.S. to allow for the enforcement of the judgment.  You will want to make sure that ultimately the judgment that you obtain from the U.S. Court is one that is set forth in a form that will be honored in that particular foreign country.  There is, unfortunately, unlike The Hague Convention, there is no one single treaty or convention that governs the international enforcement of judgments for courts so you really have to evaluate the enforceability of a judgment on a case-by-case basis.  You will be surprised by the various countries in which we, the U.S., has many foreign trade partners with it, you would think that there would be an agreement between that country and the U.S. to enforce a judgment and you go out and you do the research and you find out that there is no such agreement.  So, doing that research at the very beginning of the case, is going to be critical and should be part of your overall evaluation of whether or not you are going to bring the lawsuit in the first instance.

KS:      Annamarie, thanks so much for joining us today on IP Fridays.  This has been a wonderful interview and we look forward to speaking with you in the future.

AD:     Thanks so much Ken.

KS:      Thank you Annamarie.

KS:      That's it for this episode.  If you liked what you heard, please show us your love by visiting http://ipfridays.com/love and tweet a link to this show.  We would be so grateful if you would do that.  It would help us out to get the word out.  Also, please subscribe to our podcast at ipfridays.com or on iTunes or Stitcher.com.  If you have a question or want to be featured in one of the upcoming episodes, please send us your feedback at http://ipfridays.com/feedback.  Also, please leave us a review on iTunes.  You can go to http://ipfridays.com/itunes and it will take you right to the correct page on iTunes.  If you want to get mentioned on this podcast or even have comments within the next episode, please leave us your voicemail at http://ipfridays.com/voicemail .

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