What happened
A Fourth Circuit panel on Friday kept in place a preliminary injunction against Dutch software company DMARC Advisor BV in a cross-border intellectual property fight with North Carolina-based dmarcian Inc., holding that the U.S. Supreme Court's Abitron decision did not defeat the injunction because the alleged misconduct included domestic conduct.
Judge J. Harvie Wilkinson III wrote for a unanimous published panel that Abitron shifted the Lanham Act territoriality analysis from domestic effects to domestic conduct, but that the result did not change for DMARC Advisor BV. The court said that, although its earlier ruling had applied an effects-focused test, "the bottom line remains the same under Abitron’s conduct-focused test."
The dispute stems from what the Fourth Circuit described as a broken business relationship between dmarcian, an American company headquartered in North Carolina, and DMARC Advisor BV, a Dutch company accused of stealing dmarcian's brand name, software code and customers. The district court had found dmarcian likely to succeed on trademark infringement, trade secret misappropriation and tortious interference claims after dismissing the copyright claim for unrelated reasons.
The panel said DMARC Advisor BV's alleged conduct went beyond a merely passive foreign website accessible in the United States. It pointed to allegations that the company used dmarcian's mark as a domain name on a website similar to dmarcian's, made the site accessible in the U.S., targeted customers in the Americas, sent U.S. customer messages promoting its product and persuaded at least one U.S. company to switch providers.
The court also dismissed DMARC Advisor BV's interlocutory appeal of separate correction and civil contempt orders tied to proceedings in the Netherlands, saying it lacked jurisdiction at this stage. But the panel stressed that leaving the orders in place was not a stamp of approval, noting that the foreign-directive issues raised by the correction order would require careful review if appealed after final judgment.
The Fourth Circuit rejected DMARC Advisor BV's request to move the case to a new district judge, saying reassignment was not warranted after more than five years of proceedings before the same judge. The panel denied a stay of the injunction pending appeal, lifted the administrative stay of trial and said the parties may proceed to the main events in the litigation.