Why Chinese Companies Need to Exercise Caution When Attending Trade Shows in the United States

December 20, 2017

Over the past few years, owners of U.S. patents and trademarks have used the appearance of Chinese companies at a trade show as infringement "traps." These patent owners have commenced infringement cases against Chinese companies based on those companies' activities at the trade show. Importantly, these intellectual property owners are not just commencing lawsuits, but, before the trade show even begins, they are obtaining temporary restraining orders enjoining the Chinese company from displaying, offering and accepting orders for the accused product at the trade show.

U.S. intellectual property owners frequently make the motions for restraining orders without first giving notice to the Chinese company, thereby depriving the company of the ability to oppose the motion. The lack of an opposition can enable a U.S. intellectual property owner to obtain a temporary restraining order even though its infringement claims are not strong.

In some cases, the temporary restraining order also contained a seizure order which permits the intellectual property owner, with the assistance of U.S. marshals, to seize the accused products and all related marketing materials from the Chinese company's trade show booth. This practice appears to be particularly prevalent with respect to trade shows across all industries taking place in Las Vegas, Nevada, including CES, the International Fastener Expo, SEMA and the SupplySide West shows.

Not only do such seizures, which are carried out in public at the trade show, severely hamper or eliminate the companies' ability to market their products at the trade show, they can be embarrassing and damage the reputations of the companies. Last year, Tarter Krinsky & Drogin successfully represented a Chinese nutraceutical company that was sued and subject to a restraining order based on its planned appearance at a trade show in Nevada. That case, Aker Biomarine Antarctic, AS v. Luhua Biomarine (Shandong) Co., Ltd. and Infiniti Marketing Group, Inc. d/b/a Infiniti Nutraceuticals, Case No. 2:16-cv-2314 (D. Nev.), was handled by the firm's Intellectual Property Group.

There are several ways Chinese companies can reduce the risk of being sued at a trade show in the United States. First, if, before the trade show, the intellectual property owner puts the company on notice of its alleged infringement, the company should not ignore the notice. It should consult with a U.S. attorney regarding the best way to proceed. It may want to consider not displaying the accused product and related marketing material at the upcoming trade show. If the company is not put on notice, but believes that it will be displaying a potentially infringing product at a trade show, it should have the product evaluated by a U.S. attorney to determine whether an infringement issue exists. In addition, the company can ask that the U.S. attorney electronically monitor the court filings made in the Las Vegas courthouse. That way, the U.S. attorney and the Chinese company can learn of the filing of a motion for a temporary restraining order in close to real time and may be able to oppose the motion even though the Chinese company was not put on prior notice of the motion.

Finally, Chinese companies need to exercise caution when sending product samples to the United States. Based on our experience, law firms and their investigators request samples of the accused product directly from Chinese companies and then conduct an infringement analysis on the samples. This can be done in several ways, such as emailing the Chinese company and requesting a sample, obtaining a sample at a trade show or by leaving a business card at the Chinese company's booth at a trade show. Before distributing a sample or sending a sample to the United States, the Chinese company should try to ascertain the purpose of the request.

By putting these precautions in place and consulting with U.S. lawyers who are well versed in this area of law, Chinese companies can still have strong presences at U.S. trade shows.

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Rosenberg, Mark J. Partner and Chair of Reputation Management Practice Partner and Chair of Reputation Management Practice 212.216.1127 VCard
Xia, Jing Partner and Co-Chair of Pharmaceutical and Biologics Practice and China Practice Partner and Co-Chair of Pharmaceutical and Biologics Practice and China Practice 212.216.1158 VCard

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