Tire Eng'g & Distribution, LLC v. Shandong Linglong Rubber Co.
| Decision Date | 06 June 2012 |
| Docket Number | Nos. 10–2271,10–2273,10–2321.,s. 10–2271 |
| Citation | 682 F.3d 292,103 U.S.P.Q.2d 1183,2012 Copr.L.Dec. P 30263 |
| Parties | TIRE ENGINEERING AND DISTRIBUTION, LLC, d/b/a Alpha Tyre Systems, d/b/a Alpha Mining Systems, a Florida Limited Liability Corporation; Jordan Fishman, an individual; Bearcat Tire ARL, LLC, d/b/a Alpha Tire Systems, d/b/a Alpha Mining Systems, a Florida Limited Liability Company; Bcatco A.R.L., Incorporated, a Jersey Channels Islands Corporation, Plaintiffs–Appellees, v. SHANDONG LINGLONG RUBBER COMPANY, LTD., a foreign company; Shandong Linglong Tire Company, Ltd., f/k/a Zhaoyuan Leo Rubber Products Company, Ltd., a foreign company, Defendants–Appellants, and Al Dobowi, Ltd., a foreign limited liability company; Al Dobowi Tyre Company, LLC, a foreign limited liability company; Al Dobowi Group, a foreign corporation; TyreX International, Ltd., a foreign limited liability company based in Dubai; TyreX International Rubber Company, Ltd., a foreign corporation; Qingdao TyreX Trading Company, Ltd., a foreign corporation; Surender S. Kandhari, an individual, Defendants. Tire Engineering and Distribution, LLC, d/b/a Alpha Tyre Systems, d/b/a Alpha Mining Systems, a Florida Limited Liability Corporation; Jordan Fishman, an individual; Bearcat Tire ARL, LLC, d/b/a Alpha Tire Systems, d/b/a Alpha Mining Systems, a Florida Limited Liability Company; Bcatco A.R.L., Incorporated, a Jersey Channels Islands Corporation, Plaintiffs–Appellees, v. Al Dobowi, Ltd., a foreign limited liability company; Al Dobowi Tyre Company, LLC, a foreign limited liability company; TyreX International, Ltd., a foreign limited liability company based in Dubai; TyreX International Rubber Company, Ltd., a foreign corporation, Defendants–Appellants, and Shandong Linglong Rubber Company, Ltd., a foreign company; Shandong Linglong Tire Company, Ltd., f/k/a Zhaoyuan Leo Rubber Products Company, Ltd., a foreign company; Al Dobowi Group, a foreign corporation; Qingdao TyreX Trading Company, Ltd., a foreign corporation; Surender S. Kandhari, an individual, Defendants. Tire Engineering and Distribution, LLC, d/b/a Alpha Tyre Systems, d/b/a Alpha Mining Systems, a Florida Limited Liability Corporation; Jordan Fishman, an individual; Bearcat Tire ARL, LLC, d/b/a Alpha Tire Systems, d/b/a Alpha Mining Systems, a Florida Limited Liability Company; Bcatco A.R.L., Incorporated, a Jersey Channels Islands Corporation, Plaintiffs–Appellants, v. Al Dobowi, Ltd., a foreign limited liability company; Al Dobowi Tyre Company, LLC, a foreign limited liability company; TyreX International, Ltd., a foreign limited liability company based in Dubai; TyreX International Rubber Company, Ltd., a foreign corporation; Shandong Linglong Tire Company, Ltd., f/k/a Zhaoyuan Leo Rubber Products Company, Ltd., a foreign company; Shandong Linglong Rubber Company, Ltd., a foreign company, Defendants–Appellees, and Al Dobowi Group, a foreign corporation; Qingdao TyreX Trading Company, Ltd., a foreign corporation; Surender S. Kandhari, an individual, Defendants. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Before SHEDD, DIAZ, and FLOYD, Circuit Judges.
Affirmed in part, reversed in part, and vacated in part by published PER CURIAM opinion. Judge DIAZ wrote an opinion dissenting in part.
OPINION
Alpha,1 a domestic producer of mining tires, sued Al Dobowi 2 and Linglong,3 foreign corporations. Alpha alleged that the defendants conspired to steal its tire blueprints, produce infringing tires, and sell them to entities that had formerly purchased products from Alpha. A jury found in favor of Alpha on all claims submitted to it, awarding the company $26 million in damages. The district court upheld the damages award against the defendants' post-trial challenges. Al Dobowi and Linglong appeal, contesting the verdict and the district court's exercise of personal jurisdiction.
We initially hold that the district court properly exercised jurisdiction over Al Dobowi and Linglong. We affirm the district court's judgment that Al Dobowi and Linglong are liable to Alpha under the Copyright Act and for conversion under Virginia law, but we dismiss the remaining theories of liability submitted to the jury. We affirm the jury's damages award.4 As a final matter, we vacate the district court's award of attorneys' fees.
Because the jury returned a verdict in favor of Alpha, we view the evidence in the light most favorable to that party, giving it the benefit of all inferences. Duke v. Uniroyal Inc., 928 F.2d 1413, 1417 (4th Cir.1991). Any factual findings made by the district court are subject to clear-error review. CFA Inst. v. Inst. of Chartered Fin. Analysts of India, 551 F.3d 285, 292 (4th Cir.2009).
Alpha develops and sells specialized tires for underground mining vehicles. Prior to 2005 and the events giving rise to this suit, Alpha flourished in the mining-tire market with its unique and effective designs. To protect its intellectual property and brand, Alpha obtained copyrights for its designs and a trademark for its “Mine Mauler” product name. Alpha also closely guarded its blueprints, as with these in hand any manufacturer could copy the company's distinctive tires and jeopardize its market position.
In May 2005, John Canning, a former employee of Alpha, organized a meeting at a hotel in Richmond, Virginia. Canning invited Sam Vance, an employee of Alpha; and Surender Kandhari, the chairman of defendant Al Dobowi, to attend and discuss prospects for Al Dobowi's entry into the mining-tire business. Vance offered to supply Al Dobowi with Alpha's blueprints, customer list, and cost information. The three men discussed the possibility of Al Dobowi's using this information to produce and sell a line of mining tires that copied Alpha's designs and challenged its place in the tire market.
Following the meeting, Vance began working from his home in Tazewell, Virginia on a business plan, which anticipated selling tires in both the United States and abroad. Kandhari received Vance's business plan, at which point he formally welcomed Vance to Al Dobowi. Kandhari explainedthat he “want [ed] [Vance] on board” and “definitely expect[ed] [him] to be full time committed in developing business.” J.A. 1367. Kandhari proposed that Vance take a position with Al Dobowi as the “Business Development Director for an AL DOBOWI group company based in the USA.” Id. Throughout their correspondence that summer, Vance and Kandhari referred to Vance's Virginia home as a satellite office of Al Dobowi.
With the blueprints in their possession, Vance, Kandhari, and Canning set out to find a tire manufacturer to produce mining tires based on Alpha's designs. They found a willing partner in Linglong, and by the end of that summer Linglong had agreed to manufacture a range of mining tires pursuant to Alpha's blueprints. From the beginning of the relationship, Linglong knew that the blueprints had been stolen. In a September email, Vance and a Linglong representative discussed taking steps to slightly modify their tires to make it less obvious that they had copied Alpha's designs. Linglong further recognized that Vance was performing work from his office in Virginia. Indeed, in that same email Vance noted that he had been modifying the designs from his Tazewell office.
Their relationship having been formalized, Al Dobowi and Linglong began the manufacturing process. Linglong produced a range of mining tires based on Alpha's designs. Al Dobowi began to sell the tires in early 2006 under the name Infinity. Al Dobowi convinced Sandvik, one of the largest manufacturers of underground mining equipment, to purchase tires from it instead of Alpha. By July 2006, Vance had abandoned his Virginia office and moved permanently to China.
During the winter of 2006, Jordan Fishman, founder and CEO of Alpha, began to suspect that Vance had stolen Alpha's blueprints and given them to Al Dobowi. Fishman saw an Infinity tire catalogue, which featured products almost identical to Alpha's. He confirmed his suspicions at a trade show in the fall of 2006, where he saw the Infinity tires up close and was struck by their similarity to Alpha's line of tires.
On October 28, 2009, Alpha filed suit against Al Dobowi and Linglong. 5 Alpha's amended complaint included nine counts arising out of Al Dobowi and Linglong's conversion of its blueprints and sale of infringing tires.
Al Dobowi and Linglong (“Appellants”) first moved to dismiss the action for lack of personal jurisdiction. The district court denied the motion, stating in open court that “there is a prima facie basis for showing personal jurisdiction.” J.A. 143. Appellants then moved for summary judgment on all claims. The district court granted the motion as to four of the nine claims raised by Alpha. With regard to the remaining counts, the court dismissed all claims...
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