The Fourth Circuit Court of Appeals has adopted the predicate-act doctrine “which posits that a plaintiff may collect damages from foreign violations of the Copyright Act so long as the foreign conduct stems from a domestic infringement.” Tire Eng’g & Distrib. v. Shandong Linglong Rubber Co., Ltd., Nos. 10-2271, -2273, -2321 (4th Cir., decided June 6, 2012). So ruling, the court declined to limit the doctrine’s application “to cases where a domestic violation is not time barred” and also decided that the Lanham Act did not apply to the extraterritorial acts alleged by the plaintiff, because the defendants’ “trademark infringement lacks a sufficient effect on U.S. commerce.”
The Second and Ninth Circuits have also adopted the doctrine, while the Sixth and Federal Circuits have, according to the court, recognized its validity. The Fourth Circuit found that “[t]he doctrine strikes the appropriate balance between competing concerns, protecting aggrieved plaintiffs from savvy defendants while also safeguarding a defendant’s freedom from stale claims. Absent the predicate-act doctrine, a defendant could convert a plaintiff’s intellectual property in the United States, wait for the Copyright Act’s threeyear statute of limitations to expire, and then reproduce the property abroad with impunity. Such a result would jeopardize intellectual property rights and subvert Congress’s goals.”
Upholding the jury’s $26-million damages award, the court found that activities occurring in the United States were sufficient under the predicateact doctrine to constitute a violation of the Copyright Act. According to the court, former and current employees of the plaintiff, a domestic producer of mining tires, held a meeting in Virginia with a foreign company representative to discuss prospects for its entry into the mining-tire business. The current employee stole the plaintiff’s blueprints and provided them to the foreign company. He also worked from his home in Virginia on a business plan to sell infringing tires and was offered employment with the foreign company. The Virginia home was referred to in correspondence as “a satellite office” of the foreign company. The tires were then manufactured by a China-based company and sold to the plaintiff’s former customers. Based on this evidence, unlawful conversion of the blueprints in the United States and their unauthorized reproduction, the court found a domestic violation of the Copyright Act as well as damages from extraterritorial exploitation of this infringing conduct.