On November 14 2022, the United States Court of Appeals for the Ninth Circuit ruled in &�Բ�����;(“Jiaxing”) that foreign parties to a trademark infringement complaint can be served by trademark owners within the U.S. because of . Statutory interpretation of s.1051(e) in this case provides a new way to serve foreign defendants via the Director of the United States Patent & Trademark Office (“USPTO”).  Specifically, Jiaxing provides that a foreign defendant may be served if they have filed an application for a conflicting trademark at the USPTO. This mitigates the traditional temporal, financial, and logistical challenges associated with preventing trademark infringement by foreign companies.

The Los Angeles-based &�Բ�����;(“San Antonio”) is known for their Stella Rosa brand that they have produced under the trademarks  since 1998. They , a Chinese company, for registering the mark “RIBOLI” for tands, containers, cocktail shakers, dishware, and other kitchen products. Jiaxing registered “RIBOLI” in 2018 for clothing and shoes and in 2020 for kitchen products. Accordingly, San Antonio filed a complaint for trademark infringement, trademark dilution, and false designation of origin. They are seeking an injunction against Jiaxing from using the “RIBOLI” mark, and an order to prohibit Jiaxing’s registrations.

The current route to service of foreign defendants is the Hague Convention, but San Antonio sought a faster and inexpensive way to serve Jiaxing. They did so under  which allows U.S. residents to serve the foreign defendant’s O agent or the USPTO director in “proceedings” that affect the mark. The provision states that if the trademark applicant is not in the U.S., they can designate a person in the U.S. who may be served on their behalf regarding the marks; and if that person is not found then the USPTO director may be served. 

Jurisprudence conflicts as to whether s.1051(e) is limited to USPTO proceedings or includes civil lawsuits. As such, the  that held the provision only applies to administrative proceedings. The Ninth Circuit reversed this by interpreting that the words “proceedings affecting a trademark” are broad enough to include civil litigation. Since , the provision must encompass serving process for disputes in district court. The Court held that the wording only requires that it’s plain and ordinary meaning be taken. Moreover, since the Lanham Act grants courts the power to affect trademarks in other ways, s.1051(e)’s use of the word “process” must apply to court proceedings. Further, the word , and thus it would have been  if it were not meant to also include civil proceedings.

Serving foreign defendants through s.1051(e)  as it governs service amongst foreign countries whereas s.1051(e) governs service within the U.S without international transmittal of documents; which means it .

Foreign infringers are increasingly popular and  on marketplaces that verify IP ownership, such as Amazon. The decision is significant, in that it may act as a deterrent — it warns foreign companies that an application at the USPTO is all that is needed to be served a U.S. lawsuit. The Court’s adoption of the plain and ordinary meaning is akin to the starting point of statutory interpretation in this context in Canada —  as adopted in Rizzo and Bell ExpressVu. This points to an expectation of similar results in Canadian courts, wherein a purposive analysis would be adopted to assess the ability of domestic trademark owners to serve foreign infringers.

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Sally Yoon is an IPilogue Writer, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law School.

, Xiaorong You, a former employee of the Coca-Cola Company and Eastman Chemical Company was sentenced to 14 years in prison and made to pay a $200,000 fine for a scheme to steal trade secrets, engaging in economic espionage and committing fraud. Matthew G. Olsen emphasized that the sentence not only reflects the gravity of the offence but also a“commitment to protect [the] nation’s security by investigating and prosecuting those who steal US companies’ intellectual property.”

Between 2012 to 2018, You worked as the Principal Engineer for Global Research at Coca-Cola in Atlanta and the packaging application development manager at Eastman Chemical Company in Kingsport, Tennessee, which granted her explicit access to valuable trade secrets related to the “formulations for bisphenol-A-free (BPA-free) coatings for the inside of beverage cans.” Several other chemical and coating companies also owned the trade secret and its development cost nearly $120 million.

You the trade secrets to set up a new BPA-free coating company in China with Weihai Jinhong Group, her Chinese corporate partner, where both parties received millions in grants from the Chinese government to support the new business. In addition to the grant money, You also received the “”, a Chinese government program aimed at attracting scientists and engineers abroad. At , You’s application for the program revealed her intentions to not only benefit her corporate partner, but also the governments of China.

, BPA is still used in the linings of the company’s beverage cans, as well as other packaging, to preserve the quality and taste of the drink. The company further maintains that for potential health risks resulting from BPA in the company’s products is based on “sound science” as there is a clear scientific consensus that the miniscule amounts of BPA in beverage cans poses no risk to the public. Nonetheless, the company has publicly stated that it is undergoing research for BPA-free alternatives in preparation to protect its consumers’ and .

Economic espionage has profoundly affected the US economy. In fact, the estimates that trade secret theft costs the US economy at least $180 billion annually. Despite Canada’s sizeable economic difference from the US, the maintains that its advanced and competitive economy and close economic partnership with the US makes Canada a continuing target of hostile foreign state activities. Moreover, according to the , CSIS observed an increase in the scale and scope of espionage and foreign interference threats. Often, such threats become exponentially more complex and pressing in light of , as it can be difficult to establish the nexus between an accused and a foreign government. In addition, foreign states can target members of vulnerable groups, posing a risk not only to the Canadian economy but also the overall safety of Canadians.

Both Canada and the US must continue to diligently investigate and identify the threats of espionage targeting innovation and intellectual property in its various sectors. Moreover, Canada should continue to work with and refer to its domestic and international partners to determine reasonable punishments for similar criminal acts threatening valuable IP in the country.

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Canadian telecommunications giant Research in Motion (RIM), which manufacturers the popular BlackBerry, has reportedly offered information and tools to assist India’s government in monitoring encrypted emails and messaging services ().����India, which had threatened to shut down the BlackBerry service, is the latest country to pursue access to user communications from RIM.�� Recently the governments of Saudi Arabia and the United Arab Emirates have also threatened to ban BlackBerry services unless RIM provides access to user data ().

The threat by foreign governments to ban BlackBerry services poses a serious danger to RIM.�� Competitors in North America continue to eat away at RIM’s once dominating grasp on the smart-phone market, and RIM wishes to expand in the global marketplace to further develop its customer base.�� The reported that during the last fiscal year, 37 per cent of RIM's $15 billion in revenue came from outside North America, up from 23 per cent about five years ago.�� The demand for security concessions from countries such as India may threaten to erode RIM’s customer base as smart-phone manufacturers Nokia and Apple have already lined up to move into this market.��

RIM, unlike rivals Nokia and Apple, controls its own networks, which handle encrypted messages through centres in Canada and the UK.�� Should BlackBerry service be restricted in India, Nokia and Apple would easily snatch up RIM’s market share. This is because Nokia and Apple rely on local telecommunications infrastructure to transmit their data allowing easy government oversight.�� As a result Nokia and Apple would not be subject to a similar ban, as proposed by the Indian government against RIM.��

India has suffered deadly attacks, by both home grown and foreign militants, with some regularity for years. Mohammed Ajmal Kasab, the lone surviving gunman in the 2008 Mumbai attack, told an Indian court that he and his comrades all had Nokia mobile phones ().�� India and other foreign governments are seeking access to encrypted Blackberry communication that could be used to coordinate national security threats.���� ��

In response, RIM has assured its customers ‘that it genuinely tries to be as cooperative as possible with governments in the spirit of supporting legal and national security requirements’ ().�� ��RIM stated that a foreign government’s access to BlackBerry communications should not be boundless, and ‘lawful’ access be limited by four principles.�� First, that access be restricted to the context of national security requirements as governed by the country's judicial oversight and rules of law.�� Second, government access to BlackBerry services should be no greater than regulators already impose on RIM’s competitors and other similar communications technology companies.�� Third, no changes will be made to the BlackBerry’s security architecture and finally that RIM will maintain a consistent global standard for lawful access requirements that does not include special deals for specific countries.

RIM and other companies will likely continue to work with foreign lawmakers in their respective countries to resolve national security concerns.�� However, in doing so RIM risks damaging an important aspect of its business, its reputation.

BlackBerry Messenger users have long enjoyed the secure end-to-end encryption methods used by RIM to scramble information sent from one RIM phone to another.�� However, as reported by the , RIM may have agreed to place a BlackBerry server inside Saudi Arabia and more recent reports indicate RIM may hand over the “codes” to all local BlackBerrys to the Saudi government.��Providing such information has drawn RIM into the ongoing debate of the morality and ethics of allowing foreign government access to communications that can be used to quell political dissent and imprison human rights advocates.�� The reported the comments of Ron Deibert, director of the Citizen Lab at the University of Toronto’s Munk School of Global Affairs: “These can be ruthless nasty regimes where political opposition or human rights advocates are imprisoned or worse. In colluding with them, [RIM is] assisting in that abrogation of human rights.”

Canada and the United States (U.S.) have aligned behind RIM against access to Blackberry communication, citing the need to defend consumer privacy and internet freedom ().�� The economic interests of Canada and U.S. are also at stake, which may have instigated the strong response by these countries against the proposed BlackBerry bans.�� Patrick Leblond, an expert on international economic integration and government-business relations at the University of Ottawa summarized Canada’s position “It is good business for the Canadian government to stand up for RIM, since this is one of the world's leading technological companies, and ‘what is good for RIM is good for Canada.’”������

RIM’s struggles with foreign governments to maintain its security systems and preserve its market share will likely expand to other forms of communication.�� Any concessions made by RIM may set a precedent for future negotiations between foreign governments and other communications companies.�� As reported by the , the Indian government is already considering a crackdown on Google and Skype to gain access to the information transmitted by these services. Moving forward, it will be interesting to observe the impact that RIM’s security negotiations will have on other communications based companies.

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