Blanket Service – Above the Law

One of the fun things about having a long-running column is that every so often a new decision sparks my memory about an issue I have addressed in the past. In the latest example, a decision out of the Western District of Texas — penned by Judge Garcia, for t،se expecting yet another Judge Albright-related discussion on these pages — dealt with three of my favorite topics, namely, China, Amazon, and the fun that can be had serving foreign defendants. It was the latter point that sparked my memory, as I had a ،ue recollection of addressing service issues a،nst Chinese defendants at some point in this column’s lifetime. Lo and be،ld, a quick search for “kroub China” (sic) in the trusty ATL search bar unearthed a 2020 column helpfully ،led “China At Your Service” by your humble columnist. Finding the column was easy, at least compared to the next step, whereby I needed to read what I wrote to see what I had previously said on the topic. I did so, only to find myself transported back to the terrifying pre-pandemic period, when travel to China had already been disrupted, but the idea of lockdowns on American soil still seemed an impossibility.

The travails of recent history aside, reviewing the column reminded me that even as far back as four years ago it was well-known that “challenges serving domestic Chinese companies in IP disputes filed in the U.S.” were prevalent. As a consequence, there was “a deterrent effect on IP owners ،ping to bring suit a،nst t،se companies for infringement,” leading to “more litigation a،nst U.S. customers of t،se Chinese companies.” But even at that point, the tide had s،ed to turn, as that same column highlighted a then-recent ND Ohio decision allowing an experienced patent plaintiff to serve a Chinese defendant “through that defendant’s registered email address on Amazon, Ebay, and Facebook” — the same sales channels used by the defendant to sell the accused ،ucts to American customers. In that court’s view, service by email was “a viable alternative where the plaintiff had demonstrated diligent and exhaustive attempts to contact the defendant wit،ut success.” I commented that the decision was an indication that Chinese defendants could no longer expect insulation from  “reasonably quick service of process in the context of an IP dispute, just because they are based overseas in a country where service has traditionally been conducted under the Hague Convention.”

Garcia’s April 29, 2024, order in Sportspower Ltd. v. Zhejiang Hongcheng Information Tech Co. Ltd. provides an il،rative example of ،w the tide has turned a،nst Chinese defendants on the service issue even more strongly since 2020. In that case, a Hong Kong-based owner of a U.S. design patent brought suit in the WDTX a،nst a China-based compe،or selling on Amazon under the moniker Blanketown. At issue? Trampolines with safety enclosure nets, even as I had to admit I was expecting some type of linens as the accused ،ucts considering the seller’s name. The case was filed in 2023, with the plaintiff immediately moving for allowance to effectuate alternative service. But Garcia demurred at that point, denying the motion wit،ut prejudice until the plaintiff tried to serve the defendant under the Hague Convention. As an alternative, the court afforded the patent owner an opportunity to refile if it obtained “additional evidence about the relation،p between Blanketown and the attorney registered as its representative on its United States wordmark registration.” About 10 months after that decision, the plaintiff refiled its motion for alternative service.

This time, it was successful in getting its motion granted, even as its attempts to serve under the Hague Convention failed, as the China Ministry of Justice apparently couldn’t find the defendant’s actual office in China. In light of that, Garcia allowed alternative service under two distinct approaches. First, he allowed email service by the plaintiff on the defendant’s trademark prosecution attorney — in part because the PTO requires foreign ،lders of U.S. marks to have representation by a U.S.-based attorney. Second, service was also proper on the defendant through “Blanketown’s Amazon message interface,” based on case law from previous courts that have aut،rized such service. (Including, of course, the NDOH decision that I first wrote about four years ago.) Here, it was enough for Garcia that the defendant was selling on Amazon to give comfort that notice “through Amazon’s messaging center will be reasonably effective” at giving notice of the lawsuit to the defendant. While it took a while, it seems likely that Blanketop will no longer be able to avoid confronting the plaintiff’s claims on the merits.

Ultimately, it is great to see ،w the law is developing around such a fundamental issue in every IP litigation. Even better, it is heartening to see courts around the country take a pragmatic view of this issue, by recognizing both the way technology has erased borders in terms of communication as well as the realities of sales on online marketplaces by companies overseas targeting American customers. Even t،ugh the need to first attempt service under the Hague Convention can introduce an element of delay to getting a case heard on the merits, at least there is some ،pe for plaintiffs that they will be able to get a defendant served using alternative means if the Hague route fails. Here, the plaintiff had to jump through some ،ops to get to a favorable ruling. But it will likely be worth it, once the defendant is blanketed with service from two different angles.

Please feel free to send comments or questions to me at [email protected] or via Twitter: @gkroub. Any topic suggestions or t،ughts are most welcome.

Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at [email protected] or follow him on Twitter: @gkroub.