IP Law Daily, COPYRIGHT NEWS: High Court Asked to Review $26 Million Damage Award Against Chinese Company for Foreign Tire Sales, (Oct 12, 2012)
By Cheryl Beise, J.D.
A Chinese tire manufacturer and affiliated foreign companies have asked the Supreme Court to review a Fourth Circuit decision upholding a jury’s $26 million damage award for copyright infringement occurring abroad (Shandong Linglong Rubber Co. Ltd. v. Tire Engineering & Distribution, LLC, No. 12-444, filed October 9, 2012).
A jury found the tire manufacturer’s foreign sales of mining vehicle tires that were almost identical to tires manufactured by Alpha Tyre Systems constituted trademark and copyright infringement. The U.S. Court of Appeals for the Fourth Circuit reversed the jury’s trademark infringement verdict on the ground of lack significant enough effect on U.S. commerce to support Lanham Act liability. However, the appeals court upheld the jury’s copyright infringement verdict for foreign sales that occurred within the Copyright Act’s three year statute of limitations period. The court also upheld the jury’s $26 million general damages award, reasoning that the full award was recoverable under the Copyright Act (Tire Engineering and Distribution dba Alpha Tyre Systems, LLC v. Shandong Linglong Rubber Co., Ltd., June 6, 2012, Per Curiam).
Judge Diaz dissented from the majority’s opinion regarding the damage award, arguing that it was contrary to Fourth Circuit precedent. Judge Diaz maintained that because the trademark infringement liability theory was rejected, the damage award should have been vacated and a new trial on damages ordered.
The petition asks the Supreme Court to decide two questions:
(1) Where one or more theories of recovery are set aside after trial, must a court vacate the jury’s general verdict (as this Court and five courts of appeals have held) or does the court apply a “harmless error” exception (as seven courts of appeals, including the court below, have held)? If such an exception exists, what is the standard for determining whether the error is harmless?
(2) Whether the Copyright Act permits recovery for damages for extraterritorial conduct where no predicate act of domestic infringement occurred during the limitations period.
News: Copyright