Federal court of appeals holds that Washington shoe manufacturer can sue Arkansas retailer for copyright infringement

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by Michael Heygood

Washington Shoe manufactures a variety of foot apparel for men, women, and children. Its headquarters are in the state of Washington. A-Z is an Arkansas corporation that operates a single retail store in Alma, Arkansas, where it sells goods related to hunting, fishing, and outdoor activities. According to A-Z, it does not sell products over the Internet and does not have an interactive website that allows customers to order its products, although a different A-Z entity, with some common management, does sell some products over eBay.

Between 2007 and 2009, A-Z purchased a number of items from Washington Shoe. A Washington Shoe salesman regularly visited the A-Z store in Arkansas to determine what additional orders A-Z needed. During one of the saleman’s visits to A-Z, he noticed that “Ditsy Dots” and “Spider” boots—two of Washington Shoe’s popular children’s rain boots—were on display. The salesman knew that A-Z had never purchased these particular styles from him. He purchased a pair of the suspicious boots and sent them to Washington Shoe, who confirmed that they were infringing copies. A-Z admits that the boots in dispute were purchased from China and not from Washington Shoe, but claims that the boots had no name on them or other indication that they were subject to copyright.

In April 2009, Washington Shoe’s counsel in Seattle sent A-Z a cease-and-desist letter notifying A-Z that its boot designs were copyrighted and that A-Z’s “infringing boots are clearly illegal knock-offs.” The letter demanded that all sales of the infringing boots stop and asked for an accounting of past sales. In May 2009, counsel sent a follow-up letter, again warning A-Z that it was violating Washington Shoe’s copyright and might be liable for actual and statutory damages. After receiving these letters, A-Z removed the offending boots from its store, but sold its remaining inventory to a thrift store, whose representative traveled to Arkansas to purchase the boots.

Washington Shoe filed a lawsuit in federal court in Washington, alleging copyright infringement and other claims. A-Z moved to dismiss for lack of personal jurisdiction, arguing that it “has never sold any goods, of any kind, to any person, business or entity in the State of Washington.” The district court granted the motion and dismissed the case. However, the Ninth Circuit Court of Appeals has now reversed the dismissal.

The primary question before the court was whether A-Z’s intentional infringement of Washington Shoe’s copyright in its shoes was “expressly aimed” at the state of Washington, where Washington Shoe has it headquarters. Washington Shoe alleges there was an ongoing relationship between A-Z and Washington Shoe, during which A-Z received catalogs or brochures that included rain boots, allegedly including the copyrighted boots in this case, thus making A-Z aware of both the existence of the Ditsy Dot and Spider boots and Washington Shoe’s copyright.

Washington Shoe further alleged that A-Z purchased the boots at issue from China, and that the infringing boots were sold in the same Arkansas store as Washington Shoe’s footwear, thus placing the infringing items in direct competition with Washington Shoe’s copyrighted boots. Once Washington Shoe discovered that A- Z was selling infringing boots, it advised A-Z of the copyright infringement through cease-and-desist letters and requested proof that A-Z was no longer violating its copyright. After receiving the letters, A-Z sold the infringing boots to a thrift store. These facts, if sustained, likely constitute a willful violation of Washington Shoe’s copyright based upon A-Z’s actual awareness of its infringing activity.

The intentional acts infringing Washington Shoe’s copyright likely took place in Arkansas, where A-Z received the infringing boots from a Chinese manufacturer, displayed them for sale, and then—after having been advised that they were knock-offs—sold them to a thrift store. The court of appeals concluded that even if A-Z was not aware of the infringing boots at the outset, A-Z made a bulk sale of the infringing boots after receiving two cease-and-desist letters from Washington Shoe’s corporate counsel in Washington. Therefore, A-Z’s intentional acts were expressly aimed at the copyright held by Washington Shoe because A-Z knew that its intentional acts would impact Washington Shoe’s copyright by virtue of the cease-and-desist letters it had received. Because A-Z knew or should have known that Washington Shoe is a Washington company, A-Z’s intentional acts were expressly aimed at the state of Washington.

Similarly, A-Z’s alleged willful infringement of Washington Shoe’s copyright, and its knowledge of both the existence of the copyright and the forum of the copyright holder, was sufficient to establish that AZ knew or should have known that its conduct would cause harm likely to be suffered in the forum. As a consequence, A-Z can “reasonably anticipate being haled into court” in Washington. Because the Washington court could thus exercise personal jurisdiction over A-Z, the district court erred by dismissing the case.

Intellectual Property Law and Our Law Firm

At Heygood, Orr & Pearson, our attorneys have handled numerous patent matters including prosecuting claims for infringement, as well as for interfered-with patent rights. We have handled claims brought by a large local company for infringement of its rail car patent, claims by a local inventor for infringement of her patent for a childcare product and claims by an Israeli company against a Fortune 500 company for infringement of its wireless technology patent. Our firm has also represented a client suing a large American pharmaceutical company for interfering with its patent rights to liposome technology.

Our attorneys are capable of litigating patent infringement claims throughout the country. In addition, firm attorney John “Jay” Pate is licensed to prosecute patents before the U.S. Patent and Trademark Office.

Beyond our specific experience in the field of intellectual property, our ability to prosecute patent infringement action is aided by our extensive trial experience in general. While technical knowledge and familiarity with patent rules is a must for attorneys handling patent infringement claims, there is no substitute for courtroom experience.

At Heygood, Orr & Pearson, our seasoned litigators have the experience to take even the most complex patent case and explain it in terms a jury can understand. We have a track record of proven success representing businesses large and small. Several of our trial lawyers are board certified* and many of them have been selected as Super Lawyers in the State of Texas for several years in a row.** Our firm is AV rated, the highest legal and ethical ranking available from the leasing law firm ranking service, Martindale-Hubbell.

If you or your company is in need of representation in an intellectual property matter, contact us for a free consultation by calling toll-free at 1-877-446-9001, or by completing the free case evaluation form located on this page.

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Michael Heygood, James Craig Orr, Jr. and Eric Pearson are all Board Certified in Personal Injury Trial Law — Texas Board of Legal Specialization.

** Michael Heygood, James Craig Orr, Jr. and Eric Pearson were selected to the Super Lawyers List, a Thomson Reuters publication, for the years 2003 through 2012.