Due To The Reasonable Application Of The Hague Convention On Service Of Service, The Defendant’s Defense Was Successful

Case Introduction

Company A is a large Chinese e-commerce enterprise that has accumulated a large number of customers and a high reputation through years of operation. In early 2018, a well-known eyewear brand in the United States sued Company A for patent infringement in the Northern District of Illinois Federal Court, demanding that Company A immediately stop selling counterfeit products. In April 2018, a federal court issued a temporary injunction (TRO) in this case, requiring online platforms to immediately remove and stop selling sunglasses suspected of infringement, and freeze the account assets of Company A.
The freezing of funds has had a significant impact on the normal operation of Company A, and Company A immediately entrusted a US lawyer to represent the case. After accepting the commission, the lawyer sought a settlement from the plaintiff, but the plaintiff demanded a high settlement amount, which Company A could not accept and had no choice but to respond to the lawsuit. During multiple communications with Company A regarding the specific details of the case, the lawyer learned that the relevant documents were only served to Company A via email. Therefore, in September 2018, the lawyer explicitly proposed a motion to the court to dismiss the plaintiff’s complaint, stating that the method of service of official documents did not comply with the relevant provisions of the Hague Convention. The court held that the plaintiff failed to fulfill its due diligence obligations on the premise of obtaining the detailed address of defendant A company under certain conditions. The final judgment dismissed the plaintiff’s lawsuit and immediately unfrozen A company’s account.
The Hague Convention on Service of Service, also known as the Convention on the Service of Judicial and Extrajudicial Documents in Civil or Commercial Matters Abroad, stipulates the obligation of service of process, which is currently recognized by the international community. At present, the convention has 79 contracting states. The United States has been a party to the convention since 1965, and China joined the convention in 1991.

The prerequisite for applying the Hague Convention on Service of Service is that the recipient’s valid address can be obtained through effective means. In this case, Company A’s online store page was able to retrieve their actual contact address and conduct tracking, but the plaintiff still chose electronic delivery and did not fulfill their responsibility of researching the defendant’s actual address. Therefore, the court found that the plaintiff’s use of email to serve documents without making reasonable efforts to confirm the defendant’s actual address did not comply with the provisions of the Hague Service of Service Convention.

Experience insights

In recent years, cross-border e-commerce in China has often suffered from similar intellectual property lawsuits abroad. Due to the low amount involved and the high cost of litigation, most companies usually choose to settle out of court. Winning through procedural defense in this case is relatively rare.
The US federal civil litigation rules require that when a plaintiff (whether a US company or not) files a lawsuit in US federal court, the plaintiff must serve a copy of the complaint and subpoena on the defendant. If the defendant is located within the United States or has a place of business within the United States, service of the complaint is usually easy to complete. Delivery may be difficult when the defendant is not within the United States. Many American plaintiffs will bypass actual document delivery and choose electronic delivery methods. At present, the Chinese government has not officially recognized the delivery of overseas legal documents through email. The United States is a case law country, and previously successfully defended cases have guiding significance for similar cases in the future. When companies encounter such situations, they can invoke previous precedents for defense. Therefore, merchants should actively respond to lawsuits and accurately utilize relevant laws and regulations to safeguard their legitimate rights and interests.

Information source: Shanghai Intellectual Property Protection Center
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Shanghai Bulu Intellectual Property Agency LLP

 

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