Filed: Jul. 11, 2012
Latest Update: Mar. 26, 2017
Summary: Filed: July 11, 2012 UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 10-2271 1:09-cv-01217-TSE-IDD 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 LINGLON
Summary: Filed: July 11, 2012 UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 10-2271 1:09-cv-01217-TSE-IDD 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..
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Filed: July 11, 2012
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 10-2271
1:09-cv-01217-TSE-IDD
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.
No. 10-2273
1:09-cv-01217-TSE-IDD
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.
No. 10-2321
1:09-cv-01217-TSE-IDD
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
2
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.
O R D E R
The Court amends its opinion filed June 6, 2012, as
follows:
On page 37, line 1, the sentence beginning “We affirm”
is changed to read “Finally, we affirm,” and the final sentence
of the majority opinion on page 37, lines 3 through 6, is
deleted.
For the Court – By Direction
/s/ Patricia S. Connor
Clerk
3
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
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, No. 10-2271
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
2 TIRE ENGINEERING v. SHANDONG LINGLONG
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
No. 10-2273
Systems, a Florida Limited
Liability Company; BCATCO
A.R.L., INCORPORATED, a Jersey
Channels Islands Corporation,
Plaintiffs-Appellees,
TIRE ENGINEERING v. SHANDONG LINGLONG 3
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.
4 TIRE ENGINEERING v. SHANDONG LINGLONG
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 No. 10-2321
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,
TIRE ENGINEERING v. SHANDONG LINGLONG 5
and
AL DOBOWI GROUP, a foreign
corporation; QINGDAO TYREX
TRADING COMPANY, LTD., a foreign
corporation; SURENDER S.
KANDHARI, an individual,
Defendants.
Appeals from the United States District Court
for the Eastern District of Virginia, at Alexandria.
T. S. Ellis, III, Senior District Judge.
(1:09-cv-01217-TSE-IDD)
Argued: December 7, 2011
Decided: June 6, 2012
Before SHEDD, DIAZ, and FLOYD, Circuit Judges.
Affirmed in part, reversed in part, and vacated in part by pub-
lished per curiam opinion. Judge Diaz wrote an opinion dis-
senting in part.
COUNSEL
ARGUED: Richard Douglas Klingler, SIDLEY AUSTIN
LLP, Washington, D.C.; Howard Marc Radzely, MORGAN
LEWIS & BOCKIUS LLP, Washington, D.C., for Shandong
Linglong Rubber Company, Ltd., Shandong Linglong Tire
Company, Ltd., Al Dobowi, Ltd., Al Dobowi Tyre Company,
LLC, TyreX International, Ltd., and TyreX International Rub-
ber Company, Ltd. William Edgar Copley, WEISBROD
6 TIRE ENGINEERING v. SHANDONG LINGLONG
MATTEIS COPLEY, PLLC, Washington, D.C., for Tire
Engineering and Distribution, LLC, Jordan Fishman, Bearcat
Tire ARL, LLC, and Bcatco ARL, Incorporated. ON BRIEF:
Peter D. Keisler, James C. Owens, Jr., Bryson Love Bachman,
SIDLEY AUSTIN LLP, Washington, D.C., for Al Dobowi,
Ltd., Al Dobowi Tyre Company, LLC, TyreX International,
Ltd., and TyreX International Rubber Company, Ltd.; R. Ted
Cruz, William S. W. Chang, Shelly M. Doggett, MORGAN
LEWIS & BOCKIUS LLP, Washington, D.C., for Shandong
Linglong Rubber Company, Ltd., and Shandong Linglong
Tire Company, Ltd. August J. Matteis, Jr., GILBERT LLP,
Washington, D.C., for Tire Engineering and Distribution,
LLC, Jordan Fishman, Bearcat Tire ARL, LLC, and Bcatco
ARL, Incorporated.
OPINION
PER CURIAM:
Alpha,1 a domestic producer of mining tires, sued Al Dobowi2
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
1
By "Alpha," we refer collectively to Tire Engineering & Distribution,
LLC; Bearcat Tire ARL, LLC; Bcatco A.R.L., Inc.; and Jordan Fishman.
2
By "Al Dobowi," we refer collectively to Al Dobowi, Ltd.; Al Dobowi
Tyre Co., LLC; TyreX International, LTD.; and TyreX International Rub-
ber Co. Ltd. Al Dobowi is domiciled in the United Arab Emirates.
3
By "Linglong," we refer collectively to Shandong Linglong Rubber
Co., Ltd.; and Shandong Linglong Tire Co., Ltd. Linglong is domiciled in
China.
TIRE ENGINEERING v. SHANDONG LINGLONG 7
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 dis-
trict 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 liabil-
ity submitted to the jury. We affirm the jury’s damages award.4
As a final matter, we vacate the district court’s award of attor-
neys’ fees.
I.
A.
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 prop-
erty 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 man-
ufacturer could copy the company’s distinctive tires and jeop-
ardize its market position.
4
Alpha noted a cross appeal challenging the dismissal of its Virginia
statutory conspiracy claim only in the event that we vacated the damages
award. In accordance with Alpha’s position, because we affirm the dam-
ages award, we do not reach its cross appeal.
8 TIRE ENGINEERING v. SHANDONG LINGLONG
In May 2005, John Canning, a former employee of Alpha,
organized a meeting at a hotel in Richmond, Virginia. Can-
ning 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 cop-
ied Alpha’s designs and challenged its place in the tire mar-
ket.
Following the meeting, Vance began working from his
home in Tazewell, Virginia on a business plan, which antici-
pated selling tires in both the United States and abroad. Kand-
hari received Vance’s business plan, at which point he
formally welcomed Vance to Al Dobowi. Kandhari explained
that he "want[ed] [Vance] on board" and "definitely ex-
pect[ed] [him] to be full time committed in developing busi-
ness." J.A. 1367. Kandhari proposed that Vance take a posi-
tion 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 Sep-
tember email, Vance and a Linglong representative discussed
taking steps to slightly modify their tires to make it less obvi-
ous that they had copied Alpha’s designs. Linglong further
recognized that Vance was performing work from his office
TIRE ENGINEERING v. SHANDONG LINGLONG 9
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 pro-
duced 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 aban-
doned 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.
B.
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 dis-
miss the action for lack of personal jurisdiction. The district
court denied the motion, stating in open court that "there is a
5
Alpha filed separate suits against Al Dobowi and Linglong, respec-
tively, but the district court consolidated the two suits soon after filing.
The consolidated suit and Alpha’s cross appeal were consolidated for pur-
poses of this appeal. Alpha in its complaint named other persons as defen-
dants, but the entities enumerated in footnotes 2 and 3 are the only
defendants that remain in the case on appeal.
10 TIRE ENGINEERING v. SHANDONG LINGLONG
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 barred by the applicable statutes
of limitations. Relevant here, the court dismissed all claims
under the Copyright Act that accrued prior to October 28,
2006. It also dismissed in its entirety Alpha’s claim under the
Virginia business-conspiracy statute, Va. Code Ann. §§ 18.2-
499 to 500, finding it barred by Virginia’s two-year statute of
limitations governing actions for personal injuries.
The parties proceeded to a jury trial. Alpha presented evi-
dence establishing that Al Dobowi and Linglong had con-
spired to steal its blueprints and use them to manufacture
infringing tires, which they then sold to Alpha’s former cus-
tomers. Alpha’s damages expert testified that the company
had suffered $36 million in damages as a result of Appellants’
unlawful acts.
The court submitted five counts to the jury: (1) violation of
the federal Copyright Act, 17 U.S.C. § 101 et seq.; (2) viola-
tion of the federal Lanham Act, 15 U.S.C. § 1051 et seq., as
to registered trademarks; (3) violation of the Lanham Act as
to unregistered trademarks; (4) common-law conversion; and
(5) common-law civil conspiracy. Important to our disposi-
tion, the court instructed the jury as follows on the Copyright
Act claim:
[C]opyright laws generally do not apply to infringe-
ment that occurs outside of the United States. How-
ever, if you find that plaintiffs proved that the
infringing acts outside of the United States were a
consequence or result of predicate infringing acts
that occurred inside the United Stated [sic], then you
may consider those infringing acts that occurred out-
side the United States.
TIRE ENGINEERING v. SHANDONG LINGLONG 11
J.A. 1107–08. If the jury found in favor of Alpha on the copy-
right claim, the court instructed it to award damages equal to
Appellants’ total profit attributable to the infringement.
The jury returned a verdict in favor of Alpha on all counts,
awarding it $26 million in damages. Because the jury found
that Appellants were engaged in a conspiracy, Appellants
were adjudged jointly liable for the total damages award.
Appellants first contested the verdict in a Rule 50(b)
renewed motion for judgment as a matter of law. The district
court upheld the verdict in part and sustained the damages
award. First, the court reiterated that it properly exercised per-
sonal jurisdiction over Appellants. Moving to the merits, it
found unavailing Appellants’ challenges to liability under the
conversion, conspiracy, and Copyright Act claims. Appel-
lants’ contentions regarding the validity of the Lanham Act
claims fared better. Holding that Alpha presented insufficient
evidence to support a finding of liability on the majority of its
trademark claims, the court dismissed Alpha’s registered-
trademark claim in its entirety and upheld its unregistered-
trademark claim as to only two of eleven marks. Finally, the
court ruled that the jury’s damages award was reasonable.
Appellants then filed a Rule 59 motion for a new trial,
arguing principally that the damages award was unsustainable
in view of the court’s dismissal of the majority of Alpha’s
trademark claims, on which the jury may have relied in calcu-
lating damages. The district court denied the motion. The
court reasoned that the measure of damages was the same for
all counts, and dismissal of some claims did not disturb the
overall award because the remaining claims supported the
award in full.
In a later order, the court awarded Alpha $632,377.50 in
attorneys’ fees, concluding that Appellants’ violation of the
Lanham Act provided the sole basis for the award.
12 TIRE ENGINEERING v. SHANDONG LINGLONG
This appeal followed.
II.
We first consider Appellants’ challenge to the district
court’s exercise of personal jurisdiction over them. We review
de novo whether the district court possessed jurisdiction,
though the court’s factual findings are reviewed for clear
error. CFA Inst., 551 F.3d at 292. Characterizing their con-
tacts with the forum state as negligible, Appellants contend
that the Fourteenth Amendment’s Due Process Clause pro-
tects them from being forced to litigate in Virginia.
Appellants’ argument is unavailing. Evidence presented at
trial and the district court’s factual findings establish specific
jurisdiction over Appellants.6 Both Al Dobowi and Linglong
possessed sufficient contacts with Virginia such that the dis-
trict court’s exercise of personal jurisdiction was consistent
with the demands of due process.
A.
A lawful assertion of personal jurisdiction over a defendant
requires satisfying the standards of the forum state’s long-arm
statute and respecting the safeguards enshrined in the Four-
teenth Amendment’s Due Process Clause. CFA Inst., 551 F.3d
at 292. If a potential exercise of jurisdiction comports with the
state’s long-arm statute, the Constitution "requires that the
defendant have sufficient minimum contacts with the forum
state." Id. Because Virginia’s long-arm statute extends per-
sonal jurisdiction to the outer bounds of due process, the two-
6
On December 19, 2011, Alpha submitted a motion to supplement the
appellate record with documents purportedly relevant to our jurisdictional
analysis. Because we conclude that the evidence presented at trial supports
the district court’s assertion of personal jurisdiction, we need not consider
any materials included in the filing. We accordingly deny the motion as
moot.
TIRE ENGINEERING v. SHANDONG LINGLONG 13
prong test collapses into a single inquiry when Virginia is the
forum state. Id. at 293. A Virginia court thus has jurisdiction
over a nonresident defendant if the exercise of such jurisdic-
tion is consonant with the strictures of due process.
The Due Process Clause contemplates that a court may
assert jurisdiction over a nonresident defendant through either
of two independent avenues. First, a court may find specific
jurisdiction "based on conduct connected to the suit." ALS
Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707,
711 (4th Cir. 2002). "If the defendant’s contacts with the State
are also the basis for the suit, those contacts may establish
specific jurisdiction." Id. at 712. Second, a court may exercise
personal jurisdiction under the theory of general jurisdiction,
which requires a more demanding showing of "continuous
and systematic" activities in the forum state. Id. Alpha argues
only that the court possessed specific jurisdiction over Appel-
lants, so our analysis is confined to that model.
Fairness is the touchstone of the jurisdictional inquiry, and
the " ‘minimum contacts’ test is premised on the concept that
a corporation that enjoys the privilege of conducting business
within a state bears the reciprocal obligation of answering to
legal proceedings there." CFA Inst., 551 F.3d at 293. In the
context of specific jurisdiction, "the relevant conduct [must]
have [only] such a connection with the forum state that it is
fair for the defendant to defend itself in that state." Id. at 292
n.15. We do more than formulaically count contacts, instead
taking into account the qualitative nature of each of the defen-
dant’s connections to the forum state. In that vein, "a single
act by a defendant can be sufficient to satisfy the necessary
‘quality and nature’ of such minimal contacts, although
‘casual’ or ‘isolated’ contacts are insufficient to trigger" an
obligation to litigate in the forum. Id. at 293 (quoting Int’l
Shoe Co. v. Washington,
326 U.S. 310, 317–18 (1945)).
We consider three factors when determining whether a
court has personal jurisdiction over a nonresident defendant:
14 TIRE ENGINEERING v. SHANDONG LINGLONG
(1) the extent to which the defendant purposefully availed
itself of the privilege of conducting activities in the forum
state; (2) whether the plaintiff’s claims arise out of those
activities; and (3) whether the exercise of personal jurisdiction
is constitutionally reasonable. Id. at 294.
First, we must conclude that a nonresident defendant pur-
posefully availed itself of the privilege of conducting activi-
ties in the forum state to authorize the exercise of personal
jurisdiction over the defendant. The purposeful-availment test
is flexible, and our analysis proceeds on a case-by-case basis.
Through our recent decisions we can glean a basic outline of
the doctrine.
We have found purposeful availment where a defendant
substantially collaborated with a forum resident and that joint
enterprise constituted an integral element of the dispute. In
CFA Institute, we noted that the defendant contacted the
plaintiff, which "sparked ongoing business transactions, by
which [defendant] repeatedly reached into Virginia to transact
business with [plaintiff], invoking the benefits and protections
of Virginia law." Id. at 295. In particular, a representative of
the defendant visited the plaintiff’s office in the forum state,
after which the parties substantially corresponded and collab-
orated from afar. Id. at 294–95. Where such minimum con-
tacts are present, that the defendant did not initiate the
contacts does not bar a judicial finding of purposeful avail-
ment. Christian Science Bd. of Dirs. v. Nolan,
259 F.3d 209,
216 (4th Cir. 2001).
In contrast, we have determined that purposeful availment
was lacking in cases in which the locus of the parties’ interac-
tion was overwhelmingly abroad. We dismissed both defen-
dants from the action in Consulting Engineers Corp. v.
Geometric Ltd.,
561 F.3d 273 (4th Cir. 2009), finding that
neither had purposefully availed itself of the privilege of con-
ducting activities in Virginia, the forum state. One defendant
maintained no offices, conducted no ongoing business, and
TIRE ENGINEERING v. SHANDONG LINGLONG 15
made no in-person contact with the plaintiff in the forum
state. Id. at 279–80. Though the defendant discussed entering
an agreement with a Virginia resident, any work contemplated
would have been performed in India and no agreement was
ever executed. Id. at 280. Moreover, the activity giving rise to
the claim occurred in India, not Virginia. Id. "On these facts,"
we wrote, "[defendant’s] contact with Virginia was simply too
attenuated to justify the exercise of personal jurisdiction." Id.
The second defendant similarly lacked sufficient contacts
with the forum state. It, too, maintained no offices in Virginia,
and none of its employees had ever traveled there. Id. at 281.
The activity complained of took place in India, and the
alleged conspiracy was hatched outside of the forum state. Id.
at 282. Although this defendant exchanged four brief emails
and had several phone conversations with the Virginia-based
plaintiff about contractual negotiations, we concluded that
these contacts were qualitatively insufficient to show purpose-
ful availment. Id. at 281–82.
A similarly overpowering foreign nexus to the dispute in
Foster v. Arletty 3 Sarl, 278 F.3d 409 (4th Cir. 2002), mili-
tated against a finding of purposeful availment. As in Consult-
ing Engineers, we found it important that the defendants in
Foster had no offices or employees in the forum state. Id. at
415. Fairness also factored into our decision, and we reasoned
that the dispute’s close connection to France—all of the par-
ties to the contracts at issue were French citizens; the con-
tracts were negotiated, drafted, and executed in France; and
performance was to take place in France—rendered us unable
to conclude that the defendants "should reasonably anticipate
being haled into court in South Carolina." Id. Given France’s
centrality to the case, "some fleeting communication by tele-
phone and fax" between the plaintiff and defendants while the
plaintiff was in South Carolina was "insufficient, standing
alone, to establish jurisdiction." Id.; see also J. McIntyre
Mach., Ltd. v. Nicastro,
131 S. Ct. 2780, 2785, 2790 (2011)
(plurality) (concluding that court lacked personal jurisdiction
over British corporate defendant that "had no office in [the
16 TIRE ENGINEERING v. SHANDONG LINGLONG
forum state]; . . . neither paid taxes nor owned property there;
. . . neither advertised in, nor sent any employees to, the State"
and had never "in any relevant sense targeted the State").
Second, with purposeful availment established, we require
that the plaintiff’s claims arise out of activities directed at the
forum state. The analysis here is generally not complicated.
Where activity in the forum state is "the genesis of [the] dis-
pute," this prong is easily satisfied. See CFA Inst., 551 F.3d
at 295. A plaintiff’s claims similarly arise out of activities
directed at the forum state if substantial correspondence and
collaboration between the parties, one of which is based in the
forum state, forms an important part of the claim. See id. at
295–96.
Third, exercise of personal jurisdiction must be constitu-
tionally reasonable. This prong of the analysis "ensures that
litigation is not ‘so gravely difficult and inconvenient’ as to
place the defendant at a ‘severe disadvantage in comparison
to his opponent.’ " Id. at 296 (quoting Nolan, 259 F.3d at
217). The burden on the defendant, interests of the forum
state, and the plaintiff’s interest in obtaining relief guide our
inquiry. Id. A corporate defendant’s domicile abroad, standing
alone, does not render domestic exercise of jurisdiction
unduly burdensome. Id. In CFA Institute, we acknowledged
that the defendant’s location in India "may present unique
challenges" but nevertheless determined that its ability to
secure counsel in the forum state and its choice to do business
with a forum resident—which also made the prospect of liti-
gation in the state foreseeable—counseled that defending the
suit would not be particularly burdensome. Id. Virginia more-
over maintained a "substantial interest" in resolving the griev-
ances of its businesses, particularly when Virginia law
informed some of the claims. Id. at 296–97. Finally, the plain-
tiff had a substantial interest in protecting its intellectual prop-
erty after having "carved out a market niche by cultivating"
its distinctive mark and products. Id. at 297.
TIRE ENGINEERING v. SHANDONG LINGLONG 17
B.
Though domiciled abroad, both Al Dobowi and Linglong
have sufficient contacts with Virginia such that the district
court’s assertion of personal jurisdiction over them complied
with the Fourteenth Amendment’s mandate. We examine each
defendant’s contacts in turn.
1.
By hatching the conspiracy to unlawfully copy Alpha’s
tires while in Virginia and substantially corresponding with an
employee based in Virginia, Al Dobowi purposefully availed
itself of the privilege of conducting activities in the forum
state. Indeed, Al Dobowi’s contacts with Virginia are similar
to those deemed sufficient to establish personal jurisdiction in
CFA Institute. Kandhari, as the chairman of Al Dobowi,7 met
with Vance in Virginia. The conspiracy to copy Alpha’s blue-
prints and sell infringing tires was entered into at this same
7
Al Dobowi maintains that we must establish an independent basis for
the lawful exercise of personal jurisdiction over each of the Al Dobowi
entities sued in this case. It further suggests that Kandhari’s activities were
on behalf of only TyreX International, Ltd. and cannot be considered con-
tacts between the other entities and Virginia. We reject Al Dobowi’s
attempts to convert, for the purpose of this litigation, its freewheeling cor-
porate structure into a rigidly defined set of semi-autonomous bodies.
Kandhari considers himself the chairman of all ten or twelve companies
within the Al Dobowi Group. The record reflects that there are no hard-
and-fast divisions between the various entities. For instance, when asked
to describe the structure of Al Dobowi, Kandhari’s son testified as fol-
lows: "It’s a family business, so you work for the family and you help out
wherever is necessary, so whenever you’re required to do something, you,
you work for the family, so you are plugging gaps wherever required
whenever required." J.A. 647. He further testified that he is not employed
by any particular entity, but instead by "the family." Id. Importantly, Al
Dobowi pays its employees by drawing a check from whichever entity has
available cash. Id. 660. We are thus not dealing with independent entities
having "discrete status[es] as subsidiaries," Goodyear Dunlop Tires Oper-
ations, S.A. v. Brown, 131 S. Ct. 2846, 2857 (2011), and compartmental-
ized analysis is inappropriate.
18 TIRE ENGINEERING v. SHANDONG LINGLONG
meeting in Virginia. As was the case with the defendant’s vis-
its to the forum state in CFA Institute, which sparked a con-
tractual relationship between the defendant and plaintiff, 551
F.3d at 295, Al Dobowi and Vance’s relationship originated
in Virginia. And like the defendant in CFA Institute, Al
Dobowi "repeatedly reached into Virginia to transact business
. . . , invoking the benefits and protections of Virginia law,"
id. Al Dobowi employed Vance, a resident of Virginia who
maintained an office in Virginia and wielded significant
authority within the company. It substantially corresponded
with Vance while he was in Virginia, developing a business
plan and exchanging thoughts on designs for the Infinity line
of tires.
Al Dobowi’s contacts with the forum state are far more
extensive than those found lacking in Consulting Engineers
and Foster. Whereas the acts giving rise to the disputes in
those cases occurred almost exclusively abroad, a substantial
nexus exists here between Virginia and Alpha’s claims.
Unlike the defendants in Consulting Engineers, Al Dobowi
had an office and employee in the forum state, its representa-
tives traveled to the forum state, and a critical part of the
activity of which the plaintiffs complain—conspiring to
infringe its intellectual property rights—took place in the
forum state. And in contrast to the defendants in Foster, Al
Dobowi had an office and employee in the forum state, forged
an agreement in the forum state, and worked closely with a
U.S. citizen. Upon joining the conspiracy and hiring Vance,
Al Dobowi thus should have "reasonably anticipate[d] being
haled into court in [Virginia]," Foster, 278 F.3d at 415.
Alpha’s claims moreover arise out of Al Dobowi’s contacts
directed at Virginia. Again, CFA Institute is illustrative. As in
that case, Al Dobowi’s visit to Virginia "was the genesis of
this dispute," CFA Inst., 551 F.3d at 295. And correspondence
between Vance, a Virginia resident working in Virginia, and
Al Dobowi forms an important part of Alpha’s claim, another
factor central to our analysis in CFA Institute.
TIRE ENGINEERING v. SHANDONG LINGLONG 19
Finally, exercise of personal jurisdiction over Al Dobowi is
constitutionally reasonable. Al Dobowi, based out of the
United Arab Emirates, certainly faced a greater disadvantage
litigating in Virginia than do Virginia residents. But this is not
dispositive. See id. at 296. Al Dobowi, like the defendant in
CFA Institute over whom jurisdiction was deemed constitu-
tionally reasonable, was able to secure able counsel and
should have foreseen the possibility of being forced to litigate
in the forum state. Thus Al Dobowi’s defense of a suit in Vir-
ginia is not particularly burdensome. See id. Although the
entities that compose Alpha are not Virginia companies, the
state has an interest in ensuring that the nation’s copyright and
trademark laws are not violated within its borders. And, as
was the case in CFA Institute, Virginia has a particular inter-
est in this dispute because some of the claims are based on the
state’s law. Alpha, too, has a substantial interest in obtaining
relief. Indeed, the jury’s award of damages reveals the signifi-
cant harm visited on Alpha by Al Dobowi’s unlawful activi-
ties. Like the plaintiff in CFA Institute, Alpha has "carved out
a market niche by cultivating" a distinctive mark and product
line and was entitled to use Virginia’s judicial system "to pro-
tect and vindicate its intellectual property and other legal
rights," id. at 297.
2.
Although fewer in number, Linglong’s contacts with Vir-
ginia are qualitatively significant and demonstrate that it, too,
purposefully availed itself of the privilege of conducting busi-
ness in the forum state. As with Al Dobowi, we find that CFA
Institute controls our jurisdictional inquiry here. To be sure,
Linglong lacks some of the contacts found in CFA Insti-
tute—it has neither offices nor employees in Virginia, and no
representative visited Virginia to forge or further the conspir-
acy. But those contacts were not deemed dispositive in that
case. Rather, the defendant’s "repeatedly reach[ing] into Vir-
ginia to transact business with [plaintiff], invoking the bene-
20 TIRE ENGINEERING v. SHANDONG LINGLONG
fits and protections of Virginia law" constituted the core of
our jurisdictional holding. CFA Inst., 551 F.3d at 295.
As was the case in CFA Institute, Linglong’s reaching into
the forum state affords a sufficient basis to conclude that the
purposeful-availment prong is satisfied. Linglong engaged in
extensive collaboration with Vance while he was working
from his Virginia office. Vance and a representative from
Linglong exchanged ideas about the tire manufacturing pro-
cess—and, in particular, how best to alter Alpha’s designs to
make it appear less obvious that they had copied Alpha’s
blueprints. Vance worked on the drawings from his Virginia
office, incorporating Linglong’s ideas and responding to its
concerns, and ultimately submitting them to Linglong from
Virginia. The district court moreover concluded that Linglong
knew through its correspondence with Vance "that acts in fur-
therance of the conspiracy would occur in Virginia," J.A.
1247, and we find no reason to disturb this factual finding on
clear-error review. Given its substantively weighty communi-
cations with Vance while he was operating out of his Virginia
office—covering details of the manufacturing process that
forms the gravamen of this dispute—Linglong should have
"reasonably anticipate[d] being haled into court in [Virginia],"
Foster, 278 F.3d at 415.
The qualitative significance of Linglong’s contacts sets this
case apart from Consulting Engineers and Foster. That the
activity giving rise to the suit took place abroad bolstered our
conclusion in Consulting Engineers that the court lacked per-
sonal jurisdiction over the defendants. Here, in contrast,
Vance and Linglong’s manipulation of Alpha’s blueprints and
development of a production plan—which forms a critical
part of Alpha’s claims—took place while Vance was working
in Virginia. And unlike Foster, where the defendants had only
"fleeting communication" with a resident of the forum state,
id., Linglong engaged in substantive deliberations with Vance
about the design and manufacturing process. In sum, in con-
trast to the defendants in Consulting Engineers and Foster,
TIRE ENGINEERING v. SHANDONG LINGLONG 21
Linglong "repeatedly reached into Virginia to transact busi-
ness with [Vance], invoking the benefits and protections of
Virginia law," CFA Inst., 551 F.3d at 295.
Having established that Linglong purposefully availed itself
of the privilege of conducting activities in the forum state, we
have no trouble concluding that Alpha’s claims arise out of
Linglong’s activities directed at the state. Linglong’s corre-
spondence with the Virginia-based Vance was substantial and
forms a central part of Alpha’s claims, a factor convincing us
that this prong of the inquiry is satisfied, see id. at 295–96.
Finally, for the same reasons outlined with respect to Al
Dobowi, exercise of jurisdiction over Linglong comports with
notions of constitutional reasonableness.
III.
Turning to the merits, Appellants challenge the validity of
the jury’s verdict on Alpha’s copyright, trademark, conver-
sion, and conspiracy claims. We review de novo the district
court’s rejection of Appellants’ arguments. Sloas v. CSX
Transp., Inc., 616 F.3d 380, 392 (4th Cir. 2010).
We hold that Alpha has presented an actionable claim
under the Copyright Act, and we sustain the jury’s liability
verdict on that count. Likewise, we sustain the jury’s liability
determination on Alpha’s conversion claim. However, we dis-
miss Alpha’s trademark and conspiracy claims, finding that
each lacks merit.
A.
Appellants first argue that the Copyright Act has no extra-
territorial reach. Because the only claims raised by Alpha
involve conduct abroad, Appellants maintain that the Copy-
right Act affords Alpha no remedy. Alternatively, even if the
Copyright Act sometimes reaches foreign conduct that flows
22 TIRE ENGINEERING v. SHANDONG LINGLONG
from a domestic violation, Appellants urge us to consider that
foreign conduct only where, unlike here, the domestic viola-
tion is not barred by the Copyright Act’s three-year statute of
limitations.
We hold that Alpha has presented a cognizable claim under
the Copyright Act and therefore uphold the jury’s finding of
liability on that count. We adopt the predicate-act doctrine,
which posits that a plaintiff may collect damages from foreign
violations of the Copyright Act so long as the foreign conduct
stems from a domestic infringement. No court applying the
doctrine has ascribed significance to the timeliness of domes-
tic claims, and we decline to endorse Appellants’ proposal
that we limit its application to cases where a domestic viola-
tion is not time barred.
1.
As a general matter, the Copyright Act is considered to
have no extraterritorial reach. E.g., Nintendo of Am., Inc. v.
Aeropower Co., 34 F.3d 246, 249 n.5 (4th Cir. 1994). But
courts have recognized a fundamental exception: "when the
type of infringement permits further reproduction abroad," a
plaintiff may collect damages flowing from the foreign con-
duct. Update Art, Inc. v. Modin Publ’g, Ltd.,
843 F.2d 67, 73
(2d Cir. 1988).
This predicate-act doctrine traces its roots to a famous Sec-
ond Circuit opinion penned by Learned Hand. See Sheldon v.
Metro-Goldwyn Pictures Corp.,
106 F.2d 45, 52 (2d Cir.
1939). The Second Circuit in Sheldon was confronted with an
undisputed domestic Copyright Act violation. The defendant
had converted the plaintiff’s motion picture while in the
United States and then exhibited the picture abroad. Id. The
court was required to decide whether the damages award
could include profits made from foreign exhibition of the
film. Id. Answering the question in the affirmative, Judge
Hand articulated the framework of the predicate-act doctrine:
TIRE ENGINEERING v. SHANDONG LINGLONG 23
The Culver Company made the negatives in this
country, or had them made here, and shipped them
abroad, where the positives were produced and
exhibited. The negatives were ‘records’ from which
the work could be ‘reproduced,’ and it was a tort to
make them in this country. The plaintiffs acquired an
equitable interest in them as soon as they were made,
which attached to any profits from their exploitation,
whether in the form of money remitted to the United
States, or of increase in the value of shares of foreign
companies held by the defendants. . . . [A]s soon as
any of the profits so realized took the form of prop-
erty whose situs was in the United States, our law
seized upon them and impressed them with a con-
structive trust, whatever their form.
Id. Once a plaintiff demonstrates a domestic violation of the
Copyright Act, then, it may collect damages from foreign vio-
lations that are directly linked to the U.S. infringement.
The Second Circuit has reaffirmed the continuing vitality of
the predicate-act doctrine. Update Art, 843 F.2d at 73. In
Update Art, the plaintiff owned the rights to distribute and
publish a certain graphic art design. Id. at 68. Without autho-
rization from the plaintiff, the defendant published the image
in an Israeli newspaper. Id. at 69. The court reasoned that "the
applicability of American copyright laws over the Israeli
newspapers depends on the occurrence of a predicate act in
the United States." Id. at 73. "If the illegal reproduction of the
poster occurred in the United States and then was exported to
Israel," the court continued, "the magistrate properly could
include damages accruing from the Israeli newspapers." Id.
But if the predicate act of reproduction occurred outside of the
United States, the district court could award no damages from
newspaper circulation in Israel. Id.
More recently, the Ninth Circuit embraced the predicate-act
doctrine. L.A. News Serv. v. Reuters Television Int’l, Ltd., 149
24 TIRE ENGINEERING v. SHANDONG LINGLONG
F.3d 987, 990–92 (9th Cir. 1998). The court endorsed Second
Circuit precedent, which it construed as holding that
"[r]ecovery of damages arising from overseas infringing uses
was allowed because the predicate act of infringement occur-
ring within the United States enabled further reproduction
abroad." Id. at 992. To invoke the predicate-act doctrine,
according to the Ninth Circuit, damages must flow from "ex-
traterritorial exploitation of an infringing act that occurred in
the United States." Id. The court distinguished a previous
decision, Subafilms, Ltd. v. MGM-Pathe Commc’ns Co., 24
F.3d 1088 (9th Cir. 1994), as controlling only a narrow class
of cases dealing with the Copyright Act’s "authorization" pro-
vision, in which a plaintiff alleges merely a domestic authori-
zation of infringing conduct that otherwise takes place wholly
abroad. L.A. News, 149 F.3d at 991–92. Such a case presents
concerns not relevant to disputes in which a predicate act of
infringement—going beyond mere authorization—occurred in
the United States. Id. at 992. The Ninth Circuit further noted
that the predicate-act doctrine does not abrogate a defendant’s
right to be free from stale claims. Id.
At least two other circuits have recognized the validity of
the predicate-act doctrine, even if they have not had occasion
to squarely apply it to the facts before them. Litecubes, LLC
v. N. Light Prods., Inc.,
523 F.3d 1353, 1371 (Fed. Cir. 2008)
(endorsing principle that "courts have generally held that the
Copyright Act only does not reach activities ‘that take place
entirely abroad’ " (quoting Subafilms, 24 F.3d at 1098)); Lib-
erty Toy Co. v. Fred Silber Co.,
149 F.3d 1183,
1998 WL
385469, at *3 (6th Cir. 1998) (unpublished table decision)
("[I]f all the copying or infringement occurred outside the
United States, the Copyright Act would not apply. However,
as long as some act of infringement occurred in the United
States, the Copyright Act applies." (citations omitted)).
We join our sister circuits that have adopted the predicate-
act doctrine. The doctrine strikes an appropriate balance
between competing concerns, protecting aggrieved plaintiffs
TIRE ENGINEERING v. SHANDONG LINGLONG 25
from savvy defendants while also safeguarding a defendant’s
freedom from stale claims. Absent the predicate-act doctrine,
a defendant could convert a plaintiff’s intellectual property in
the United States, wait for the Copyright Act’s three-year stat-
ute of limitations to expire, and then reproduce the property
abroad with impunity. Such a result would jeopardize intellec-
tual property rights and subvert Congress’s goals as engrafted
on to the Copyright Act. But lest the doctrine lead to a wind-
fall for plaintiffs and force a defendant to face liability for
stale claims, plaintiffs may collect only those damages "suf-
fered during the statutory period for bringing claims, regard-
less of where they may have been incurred," L.A. News, 149
F.3d at 992.
2.
Applying the predicate-act doctrine to this case, we con-
clude that Alpha has presented a valid claim under the Copy-
right Act. Accordingly, we sustain the jury’s finding of
liability on that count.
Distilling applicable case law, we find that a plaintiff is
required to show a domestic violation of the Copyright Act
and damages flowing from foreign exploitation of that
infringing act to successfully invoke the predicate-act doc-
trine. Alpha has shown both. Appellants concede on appeal
that Alpha has established a domestic violation of the Copy-
right Act. While in the United States, Vance and Al Dobowi
unlawfully converted Alpha’s blueprints and reproduced them
absent authorization. These acts constitute infringing conduct
under the Copyright Act. See Update Art, 843 F.2d at 73 (con-
cluding there would be an actionable violation if defendant
illegally reproduced image while in the United States). And
Alpha has demonstrated damages flowing from extraterritorial
exploitation of this infringing conduct. Al Dobowi and
Linglong used the converted blueprints to produce mining
tires almost identical to those of Alpha. They then sold these
tires to former customers of Alpha, causing Alpha substantial
26 TIRE ENGINEERING v. SHANDONG LINGLONG
damage. See Sheldon, 106 F.2d at 52 (finding damages flow-
ing from foreign exploitation of infringing act where defen-
dant converted negatives of motion picture in United States
and exhibited the film abroad).
Effectively granting the validity of the above analysis,
Appellants contend that the predicate-act doctrine may not be
employed when recovery of damages from a domestic viola-
tion of the Copyright Act is barred by the three-year statute
of limitations. Because the statute of limitations bars Alpha
from collecting damages for activities within the United
States, Appellants assert that the jury’s Copyright Act verdict
may not stand.
We are not persuaded by Appellants’ creative interpretation
of applicable case law. It may be true that, in each of the cases
in which a court has invoked the predicate-act doctrine, the
plaintiff would have been eligible to receive a damages award
based solely on a domestic infringement. But courts ascribed
no relevance to this observation, never discussing the statute
of limitations and its effect on the predicate-act doctrine.
Quite the opposite, at least the Ninth Circuit anticipated that
a plaintiff may collect damages from extraterritorial conduct,
even if the statute of limitations bars an award based on
domestic infringement. L.A. News, 149 F.3d at 992
("Defendants’ argument that adoption of the Second Circuit
rule would permit plaintiffs to circumvent the statute of limi-
tation by recovering damages for distribution abroad occur-
ring many years after the infringing act in the United States
is without merit. An action must be ‘commenced within three
years after the claim accrued.’ . . . A plaintiff’s right to dam-
ages is limited to those suffered during the statutory period for
bringing claims, regardless of where they may have been
incurred." (emphasis added)). That Alpha may not collect
damages from Appellants’ domestic activities is thus of no
moment to the analysis, as the district court accurately
instructed the jury.
TIRE ENGINEERING v. SHANDONG LINGLONG 27
B.
The Appellants next argue that the district court incorrectly
denied their Rule 50 motion as to Alpha’s Virginia state-law
conversion claim because that claim is preempted by the
Copyright Act. Conversion under Virginia law requires a
showing of "any act of dominion wrongfully exerted over
property in denial of, or inconsistent with, the owner’s rights."
Simmons v. Miller, 544 S.E.2d 666, 679 (Va. 2001). Relevant
here, the Copyright Act states:
[A]ll legal or equitable rights that are equivalent to
any of the exclusive rights within the general scope
of copyright as specified by section 106 [of the
Copyright Act] in works of authorship that are fixed
in a tangible medium of expression and come within
the subject matter of copyright as specified by sec-
tions 102 and 103 . . . are governed exclusively by
this title.
17 U.S.C.A. § 301(a). Section 301’s "broad preemptive
scope," Trandes Corp. v. Guy F. Atkinson Co., 996 F.2d 655,
658 (4th Cir. 1993), serves "to insure that the enforcement of
these rights remains solely within the federal domain," Com-
puter Assocs. Int’l Inc. v. Altai, Inc.,
982 F.2d 693, 716 (2d
Cir. 1992). We use a two-part test to determine if a claim is
preempted by the Copyright Act, looking at (1) whether the
claim "falls within the subject matter of copyright" and (2)
whether the claim "protects rights that are equivalent to any
of the exclusive rights of a federal copyright." Carson v.
Dynegy, Inc.,
344 F.3d 446, 456 (5th Cir. 2003) (internal quo-
tation marks omitted). "[B]oth prongs of [this] two-factor test
must be satisfied for preemption to occur." Id.
In applying the "equivalency" prong, we have explained
that "reference must be made to the elements of the state
cause of action." Rosciszewski v. Arete Associates, Inc.,
1
F.3d 225, 229 (4th Cir. 1993). A state cause of action is not
28 TIRE ENGINEERING v. SHANDONG LINGLONG
"equivalent" and avoids preemption if the action requires an
"extra element [that] transform[s] the nature of the action,"
Laws v. Sony Music Entm’t Inc.,
448 F.3d 1134, 1144 (9th
Cir. 2006), making it "qualitatively different from a copyright
infringement claim," Altai, 982 F.2d at 716 (internal quotation
marks omitted). See also Rosciszewski, 1 F.3d at 230 (same).
Applying this standard, we have concluded that claims under
the Virginia Computer Crimes Act are preempted, see Ros-
ciszewski, 1 F.3d at 230, while claims for misappropriation of
trade secrets under Maryland law are not, see Trandes, 996
F.2d at 660. Importantly, in Trandes, we explained that the
focus under § 301 is not on the "conduct" or "facts pled," but
on the "elements" of the causes of action. Id. at 659.
Most relevant to this case, in United States ex. rel Berge v.
Bd. of Trustees of the University of Alabama,
104 F.3d 1453
(4th Cir. 1997), we held that the Copyright Act preempted a
claim for conversion under Alabama law when no tangible
objects embodying the intellectual property were converted.
We explained it was "hornbook law that a state law action for
conversion will not be preempted if the plaintiff can prove the
extra element that the defendant unlawfully retained the phys-
ical object embodying plaintiff’s work." Id. at 1463. (internal
quotation marks omitted). "However, § 301(a) will preempt a
conversion claim where the plaintiff alleges only the unlawful
retention of its intellectual property rights and not the unlaw-
ful retention of the tangible object embodying its work." Id.
(internal quotation marks omitted).
Applying this framework, we conclude that the district
court correctly denied the Appellants’ Rule 50 motion. In
doing so, the district court concluded that Alpha presented
sufficient evidence that the Appellants "unlawfully obtained
copies" of Alpha’s blueprints and retained those copies, thus
denying Alpha the "right to control" them. J.A. 1217. Specifi-
cally, Alpha proved that "Vance ‘took’ the blueprints without
authorization." J.A. 1217-18. Accordingly, because Alpha
was able to "prove the extra element that the defendant
TIRE ENGINEERING v. SHANDONG LINGLONG 29
unlawfully retained the physical object embodying plaintiff’s
work," the Copyright Act does not preempt the conversion
claim. Berge, 104 F.3d at 1463; see also Seng-Tiong Ho v.
Taflove, 648 F.3d 489, 501-02 (7th Cir. 2011) (finding con-
version claim under Illinois law preempted where plaintiff
alleged only "unauthorized publishing, not possession"); Car-
son, 344 F.3d at 456-57 (finding conversion claim under
Texas law was not preempted where complaint alleged physi-
cal retention of tangible forms).
C.
Appellants further challenge the jury’s finding of liability
under the Lanham Act, arguing that the statute’s sweep does
not extend to the extraterritorial acts alleged by Alpha. We
agree. Because Appellants’ trademark infringement lacks a
sufficient effect on U.S. commerce, we find that the Lanham
Act does not reach the conduct complained of by Alpha.
Although the Lanham Act applies extraterritorially in some
instances, only foreign acts having a significant effect on U.S.
commerce are brought under its compass. Nintendo, 34 F.3d
at 250. Confining the statute’s scope thusly ensures that judi-
cial application of the Act will hew closely to its "core pur-
poses . . . , which are both to protect the ability of American
consumers to avoid confusion and to help assure a trade-
mark’s owner that it will reap the financial and reputational
rewards associated with having a desirable name or product."
McBee v. Delica Co., 417 F.3d 107, 120–21 (1st Cir. 2005).
With these aims in mind, we have reasoned that the arche-
typal injury contemplated by the Act is harm to the plaintiff’s
"trade reputation in United States markets." See Nintendo, 34
F.3d at 250.
Other circuits have posited that the Lanham Act’s
significant-effect requirement may be satisfied by extraterrito-
rial conduct even when that conduct will not cause confusion
among U.S. consumers. Under this diversion-of-sales theory,
30 TIRE ENGINEERING v. SHANDONG LINGLONG
courts find a significant effect on U.S. commerce where sales
to foreign consumers would jeopardize the income of an
American company. E.g., McBee, 417 F.3d at 126. The doc-
trine is narrowly applied, however, because the injury in this
context—harm to a U.S. business’s income absent confusion
among U.S. consumers—"is less tightly tied to the interests
that the Lanham Act intends to protect, since there is no
United States interest in protecting [foreign] consumers." Id.
Thus courts invoking the diversion-of-sales theory have
required the defendants to be U.S. corporations that conducted
operations—including at least some of the infringing activi-
ty—within the United States. Ocean Garden, Inc. v. Mark-
trade Co.,
953 F.2d 500, 504 (9th Cir. 1991); Am. Rice, Inc.
v. Ark. Rice Growers Coop. Ass’n,
701 F.2d 408, 414–15 (5th
Cir. 1983). Only in such instances is there a sufficient nexus
between U.S. commerce and the infringing activity.
Recognizing that it has not alleged confusion among U.S.
consumers, Alpha grants that its Lanham Act claims can pre-
vail only if we adopt, for the first time, the diversion-of-sales
theory. Although we find compelling the reasons underpin-
ning use of the doctrine in other cases, we decline to apply it
to the facts before us. Courts upholding liability under the
Lanham Act based solely on harm to a U.S. company’s
income from foreign infringement have stressed that the
defendants in those cases were U.S. companies that conducted
substantial domestic business activity. Ocean Garden, 953
F.2d at 504; Am. Rice, Inc., 701 F.2d at 414–15. Here, in con-
trast, Appellants are not U.S. corporations and they lack a per-
vasive system of domestic operations. Thus we cannot
conclude that the extraterritorial conduct—exclusively foreign
sales of infringing tires—has a significant effect on U.S. com-
merce as required by the dictates of the Lanham Act, see Nin-
tendo, 34 F.3d at 250. We accordingly hold that the Lanham
Act does not afford Alpha relief, and we dismiss its claims
under that statute.8
8
We also vacate the district court’s award of attorneys’ fees to Alpha.
The court premised the award solely on Alpha’s successful Lanham Act
claims. Because we dismiss those claims, we must also vacate the award
of attorneys’ fees.
TIRE ENGINEERING v. SHANDONG LINGLONG 31
D.
Appellants finally contend that the jury’s verdict on
Alpha’s common-law civil conspiracy claims must be set
aside and those claims dismissed. We find this argument con-
vincing. Alpha’s common-law civil conspiracy claims alleged
that the Defendants conspired to infringe Alpha’s trademarks
and copyrights and to convert Alpha’s property. "A common
law claim of civil conspiracy" under Virginia law "generally
requires proof that the underlying tort was committed." Almy
v. Grisham, 639 S.E.2d 182, 188 (Va. 2007). If the underlying
tort is dismissed for any reason, so, too, must the correspond-
ing conspiracy claim be dismissed. Accordingly, because we
have dismissed the Lanham Act claim—the underlying tort
for the conspiracy to infringe trademarks claim—the corre-
sponding conspiracy claim must be dismissed as well.
We further conclude that Alpha’s claim for conspiracy to
infringe its copyrights is preempted by the Copyright Act. As
discussed previously, a state-law cause of action is not pre-
empted so long as it requires an element additional to the
showing required under the Copyright Act and that element
"‘changes the nature of the action so that it is qualitatively dif-
ferent from a copyright infringement claim,’" Rosciszewski, 1
F.3d at 230 (quoting Computer Assocs., 982 F.2d at 716).
We conclude that the additional elements required to prove
conspiracy to infringe copyrights are not sufficient to escape
the Copyright Act’s ambit of preemption. Under Virginia law,
"‘[t]he gist of the civil action of conspiracy is the damage
caused by the acts committed in pursuance of the formed con-
spiracy and not the mere combination of two or more persons
to accomplish an unlawful purpose or use an unlawful
means.’" Almy, 639 S.E.2d at 189 (quoting CaterCorp, Inc. v.
Catering Concepts, Inc.,
431 S.E.2d 277, 281–82 (Va. 1993)).
Thus the core of the claim for conspiracy to infringe copy-
rights is identical to that under the Copyright Act, and the
extra element of agreement or combination does not make it
32 TIRE ENGINEERING v. SHANDONG LINGLONG
otherwise. Brown v. McCormick,
23 F. Supp. 2d 594, 608 (D.
Md. 1998) ("[W]hile the formulation for civil conspiracy adds
the element of agreement to the elements that copyright
infringement requires, the right protected by such a cause of
action in this case would serve merely to vindicate the same
right as under the Copyright Act."). Alpha’s claim for con-
spiracy to commit copyright infringement must therefore be
dismissed as preempted by the Copyright Act.
Turning to Alpha’s final conspiracy claim—conspiracy to
convert—we find this claim should not be dismissed. First, in
contrast to the conspiracy to infringe trademarks, we have
upheld the jury’s liability finding on the conversion claim.
Second, in contrast to the conspiracy to infringe copyrights,
the conspiracy to convert claim is not subject to preemption
for the same reasons the underlying conversion claim was not.
Accordingly, although we find that the conspiracy to
infringe trademarks and copyrights claims must be dismissed,
the conspiracy to convert claim remains meritorious. We are
thus faced with the question of whether the jury’s verdict on
the civil conspiracy claim may stand given these conclusions.
We believe it cannot. The district court instructed the jury that
"[y]ou may find defendants liable for conspiracy to commit
one, two, or all three of the underlying torts." (J.A. 1098). The
jury verdict form on this claim required the jury to find in
favor of either Alpha or the Defendants on the "Civil Conspir-
acy" claim, but did not require the jury to issue a special find-
ing of which underlying torts the Defendants conspired to
commit. In rejecting the Defendants’ Rule 50 motion on this
claim, the district court concluded that the conspiracy verdict
could stand even after it dismissed several of the trademark
infringement claims because "the jury could not have found
a conspiracy to commit trademark infringement without also
finding a conspiracy to commit copyright infringement." (J.A.
1240-41). We have now, however, also dismissed the conspir-
acy to infringe copyright claims and, under the district court’s
TIRE ENGINEERING v. SHANDONG LINGLONG 33
own rationale, we believe the proper course is to set aside the
jury’s verdict on this count.9
IV.
Finally, we turn to the jury’s damages award.10 We have
concluded that the district court properly exercised jurisdic-
tion over the Appellants. We also uphold the jury’s determi-
nation that the Appellants are liable to Alpha under the
Copyright Act and for conversion under Virginia law, but we
dismiss the remaining claims against the Defendants. The
question that remains is whether, in light of the fact that we
are reversing the jury’s verdict on some claims, a new trial for
damages is required. The Appellants raised this argument
below in a Rule 59 motion for a new trial after the district
court dismissed several of the Lanham Act claims, but the dis-
trict court rejected it. We review the district court’s refusal to
9
This conclusion comports with the Supreme Court’s recognition that
when a jury issues a general verdict on multiple theories of liability and
one of those theories is overturned on appeal, the entire verdict falls. Sunk-
ist Growers, Inc. v. Winckler & Smith Citrus Products Co., 370 U.S. 19,
30 (1962); United New York and New Jersey Sandy Hook Pilots Associa-
tion v. Halecki,
358 U.S. 613, 619 (1959). This general verdict rule is dis-
cussed in greater detail in Part IV.
10
Consistent with Virginia law, the jury’s finding of guilt on the civil
conspiracy claim meant that the Appellants were held jointly and severally
liable for the damages award. Worrie v. Boze, 95 S.E.2d 192, 198 (Va.
1957), abrogated on other grounds by Station #2, LLC v. Lynch,
695
S.E.2d 537, 541 (Va. 2010) (holding that, under Virginia law, "conspira-
tors are jointly and severally liable for all damage resulting from the con-
spiracy." ); see also Loughman v. Consol-Pennsylvania Coal Co.,
6 F.3d
88, 103 (3d Cir. 1993) (noting "the law of conspiracy establishes that
every conspirator is jointly and severally liable for all acts of co-
conspirators taken in furtherance of the conspiracy"). Although we vacate
the civil conspiracy verdict because of the dismissal of the underlying tort
of trademark infringement and the preemption of the conspiracy to
infringe copyrights claim, that action does not undercut the jury’s factual
conclusion that the Defendants undertook activities jointly. Accordingly,
we do not disturb the conclusion that the Defendants are jointly and sever-
ally liable to Alpha.
34 TIRE ENGINEERING v. SHANDONG LINGLONG
award a new damages trial for abuse of discretion. Robinson
v. Equifax Info. Servs., LLC,
560 F.3d 235, 242 (4th Cir.
2009).
The Supreme Court has recognized that when a jury issues
a general verdict on multiple theories of liability and one of
those theories is overturned on appeal, the entire verdict falls.
Sunkist Growers, Inc. v. Winckler & Smith Citrus Products
Co.,
370 U.S. 19, 30 (1962); United New York and New Jer-
sey Sandy Hook Pilots Association v. Halecki,
358 U.S. 613,
619 (1959). We have followed this rule as well, explaining
"[o]ur rule is that because of the impossibility of knowing but
what the jury’s verdict rested on the legal erroneous theory,
such a general verdict may not stand as a basis for judgment."
Flowers v. Tandy Corp.,
773 F.2d 585, 591 (4th Cir. 1985).
In this case, however, the jury completed a special verdict
form as to liability, but issued only a general verdict on the
damages award.
In Barber v. Whirlpool Corp.,
34 F.3d 1268 (4th Cir. 1994),
we addressed whether the general verdict rule extended to
such situations. There, the plaintiff brought two separate
claims (intentional infliction of emotional distress and mali-
cious prosecution) that stemmed from two separate incidents.
The verdict form "made it clear that the jury found Whirlpool
liable" for both claims, and that it issued a "global figure" for
damages—$75,000 actual and $125,000 punitive. Id. at 1278.
On appeal, we reversed the district court’s denial of Whirl-
pool’s motion for judgment as a matter of law on the emo-
tional distress claim. We then extended the Flowers rule to
the damages award, concluding that a "new trial is necessary
on the damages issue" because the jury did not "distinguish[ ]
the amount attributable to each claim." Id.
In this case, the district court concluded that a new trial is
unnecessary—even after it dismissed several of the Lanham
Act claims—because the "damages award in this case would
have been the same regardless of whether all eleven or only
TIRE ENGINEERING v. SHANDONG LINGLONG 35
two of the trademark claims were submitted to the jury." (J.A.
1237). The court based this determination on the damages
provision of the Copyright Act, 17 U.S.C. § 504(b), which
states "[t]he copyright owner is entitled to recover . . . any
profits of the infringer that are attributable to the infringe-
ment." In this case, Alpha’s expert witness testified that the
Appellants realized $36 million in sales of infringing tires,
although there was some dispute regarding whether all of the
sales were within the three-year limitations period under the
Copyright Act. The jury awarded $26 million—which the dis-
trict court noted was the amount of sales within the three-year
limitations period. The Appellants contend that, under Barber,
with some of Alpha’s theories of liability set aside, the district
court abused its discretion and a new trial on damages is nec-
essary. We disagree.
While remaining cognizant of the general verdict rule,
courts "have engrafted a sort-of harmless error gloss onto the
basic principle." Muth v. Ford Motor Co., 461 F.3d 557, 564
(5th Cir. 2006). An error is harmless in this context "‘where
it is reasonably certain that the jury was not significantly
influenced by issues erroneously submitted to it.’" Braun v.
Flynt,
731 F.2d 1205, 1206 (5th Cir. 1984) (quoting E.I. Du
Pont de Nemours v. Berkley & Co., Inc.,
620 F.2d 1247, 1258
n.8 (8th Cir. 1980)), quoted with approval by Henderson v.
Winston, No. 94-2017,
1995 WL 378602 at *5 (4th Cir., June
27, 1995). See also Davis v. Rennie,
264 F.3d 86, 105 (1st
Cir. 2001) (same).
Quigley v. Rosenthal,
327 F.3d 1044, 1073-74 (10th Cir.
2003), exemplifies this sensible approach. In Quigley, the
Tenth Circuit faced a similar situation to this case, having dis-
missed one of five claims in a case where the jury issued a
special verdict on liability but awarded a lump-sum of com-
pensatory damages. On appeal, the Tenth Circuit found that
the damages award could stand because reversal on one of the
counts "has no effect on the damages award," particularly
36 TIRE ENGINEERING v. SHANDONG LINGLONG
because the district court had noted that the damages for each
of the five claims were "the same." Id. at 1074.
In addition to this caselaw, the Federal Rules of Civil Pro-
cedure also counsel harmless error review of trial errors:
[N]o error in admitting or excluding evidence—or
any other error by the court or a party—is ground for
granting a new trial, for setting aside a verdict, or for
vacating, modifying, or otherwise disturbing a judg-
ment or order. At every stage of the proceeding, the
court must disregard all errors and defects that do
not affect any party’s substantial rights.
Fed. R. Civ. P. 61. Rule 61 "directs courts to disregard any
error or defect in the proceeding" unless the error is "‘prejudi-
cial: It must have affected the outcome of the district court
proceedings.’" Muldrow ex rel. Estate of Muldrow v. Re-
Direct, Inc., 493 F.3d 160, 168 (D.C. Cir. 2007) (quoting
United States v. Olano,
507 U.S. 725, 734 (1993)).
Applying this harmless error approach, we affirm the dis-
trict court’s denial of a new trial on damages. Unlike Barber,
but like Quigley, the claims in this case are predicated on the
same conduct, and the maximum recovery for each claim is
the "same." Quigley, 327 F.3d at 1074. To the extent the
recoveries differ, the Copyright Act offers the most generous
relief—the defendants’ profits. In sum, we are "reasonably
certain that the jury was not significantly influenced by issues
erroneously submitted to it," and that any error was therefore
harmless. Braun, 731 F.2d at 1206.
V.
We hold that the district court properly exercised jurisdic-
tion over Appellants. Turning to the merits, we conclude that
Alpha presented an actionable claim under the Copyright Act
and for conversion under Virginia law, but that its remaining
TIRE ENGINEERING v. SHANDONG LINGLONG 37
claims must be dismissed. Finally, we affirm the jury’s
damages award in favor of Alpha, but we vacate the district
court’s award of attorneys’ fees.
AFFIRMED IN PART,
REVERSED IN PART,
AND VACATED IN PART
DIAZ, Circuit Judge, dissenting in part:
I join Parts I–III of the majority opinion. But because our
precedent squarely forecloses sustaining a general award of
compensatory damages when a theory of liability has been
dismissed postverdict, I dissent from the majority’s ruling in
Part IV. I would instead vacate the jury’s damages award and
remand the case for a limited trial on damages.
I.
A.
As the majority forthrightly recognizes, long-standing
Supreme Court precedent dictates that a general verdict be
overturned when one theory of liability is dismissed. Sunkist
Growers, Inc. v. Winckler & Smith Citrus Prods. Co., 370
U.S. 19, 30 (1962). In such a case, the jury finds the defen-
dant generally liable but does not specify which of the multi-
ple claims submitted to it supports the liability determination.
Because a general verdict "‘prevents us from perceiving upon
which plea [the jury] found’" the defendant liable, we are
required to nullify the verdict if just one of the potential
grounds for liability is overturned. Id. (quoting Maryland v.
Baldwin,
112 U.S. 490, 493 (1884)); see also Flowers v.
Tandy Corp.,
773 F.2d 585, 591 (4th Cir. 1985) ("[B]ecause
of the impossibility of knowing but what the jury’s verdict
38 TIRE ENGINEERING v. SHANDONG LINGLONG
rested on the legally erroneous theory, such a general verdict
may not stand as the basis for judgment.").
Even when dismissal of a claim does not jeopardize the
jury’s liability verdict, it might call into question the damages
award. We confronted just this situation in Barber v. Whirl-
pool Corp., 34 F.3d 1268 (4th Cir. 1994). There, two claims
were submitted to the jury, which found the defendant liable
on each count. Id. at 1271, 1278. The jury awarded the plain-
tiff $75,000 in actual damages and $125,000 in punitive dam-
ages, but it did not apportion the amounts on a per-claim
basis. Id. On appeal, we dismissed one of the successful
claims for insufficient evidence. Id. at 1276. We then vacated
the damages award, accepting the defendant’s argument that
the general award could not stand after dismissal of one of the
two claims. Id. at 1278.
Turning first to the award of actual damages, we noted that
"the liability verdict need not be disturbed because the verdict
form made it clear that the jury found [the defendant] liable
for both [claims]." Id. Concluding next that the award of
actual damages could not stand, we rejected the plaintiff’s
argument—one strikingly similar to that advanced by Alpha.
The plaintiff maintained that we could sustain the damages
verdict as long as a single upheld finding of liability sup-
ported the entire damages award. Id. We cursorily rejected
this position as a blatant contravention of Supreme Court pre-
cedent. "[W]e must apply the Flowers rule," we wrote, "and
vacate the damages award." Id.
We next considered whether we could uphold the award of
punitive damages in light of our postverdict dismissal of a
theory of liability. Under South Carolina law, which governed
the dispute, punitive damages were permissibly awarded
where the defendant’s conduct was willful, wanton, or reck-
less. Id. The jury’s general verdict precluded us from deter-
mining on which claim it based its award of punitive
damages. Id. at 1279. Because substantial evidence did not
TIRE ENGINEERING v. SHANDONG LINGLONG 39
support one of the two claims submitted to the jury and the
verdict was ambiguous, we also vacated the punitive-damages
award. Id.
Seizing on the sufficiency-of-the-evidence language from
Barber, we upheld a general award of punitive damages in the
face of postverdict dismissal of a claim in Johnson v. Wal-
Mart Stores, Inc., 178 F.3d 1284,
1999 WL 314660 (4th Cir.
1999) (per curiam) (unpublished table decision). The jury in
Johnson found for the plaintiff on two of the three claims sub-
mitted to it, awarding $19,280 in actual damages and $38,000
in punitive damages, the latter of which were not apportioned
on a per-claim basis. Id. at *2. In a post-trial motion, the dis-
trict court dismissed one of the two successful claims, reason-
ing that failure to do so could lead to an impermissible double
recovery for actual damages under state law. Id. at *3–4. On
appeal, we rejected the defendant’s argument that the
punitive-damages award must be set aside, reasoning that "the
district court’s entry of judgment as a matter of law in favor
of [the defendant] on [the plaintiff’s] slander claim created no
ambiguity in the jury’s award of punitive damages." Id. at *4.
While not disturbing Barber’s analysis of general awards of
actual damages, we limited its mandate in the punitive-
damages domain to cases in which a claim dismissed post-
verdict is "infirm due to insufficient evidence." Id. Because
sufficient evidence supported the only dismissed theory of lia-
bility in Johnson, we affirmed the punitive-damages award.
Id.
B.
Viewing this case through the prism of Barber, I am unable
to conclude that the general damages award may stand.
Rather, a straightforward application of the rule announced in
that decision compels vacating the award.
I note first that the principles enunciated in Sunkist do not
require us to overturn the verdict as to liability. Unlike the
40 TIRE ENGINEERING v. SHANDONG LINGLONG
general verdict entered by the jury in Sunkist, the jury here
enumerated a separate finding of liability for each of the five
claims submitted to it. Even taking into account that only two
of the counts submitted to the jury are actionable—those for
violation of the Copyright Act and state-law conversion—we
need not disturb the liability verdict. See Barber, 34 F.3d at
1278.
The damages award, however, does not fare so well under
our precedent. Proper disposition of the case begins and ends
with Barber. In that case, we rejected an argument identical
to that advanced by Alpha. Even if an upheld theory of liabil-
ity supports the general damages award in full, we reasoned
that we must nevertheless vacate the award when another
claim is dismissed postverdict. Id. In this case, the district
court dismissed Alpha’s registered-trademark claim post-
verdict for insufficient evidence. It moreover dismissed
Alpha’s unregistered-trademark claim as to nine of eleven
marks, also for lack of evidence. The damages award conse-
quentially may not stand under a faithful reading of Barber.
Nothing in our subsequent decisions calls into question
Barber’s treatment of general damages awards, at least
where—as here—an award of punitive damages is not at
issue. Our decision in Johnson drew on language from Barber
to conclude that a general punitive-damages award may stand
even when a claim is dismissed postverdict, so long as at least
one upheld theory of liability supports the award and the dis-
missed claim was not defective for insufficient evidence.
Johnson, 1999 WL 314660, at *4. Distinguishing a general
award of compensatory or actual damages from one of puni-
tive damages makes sense, given the comparatively loosey-
goosey nature of determining the proper amount of punitive
damages. Where actual or compensatory damages must be
tethered to the claims with some mathematical precision, a
jury may—within constitutional limits—award punitive dam-
ages on a global basis based on standards that require little
more than a subjective judgment as to what amount is suffi-
TIRE ENGINEERING v. SHANDONG LINGLONG 41
cient to deter or punish the defendant for its conduct. It comes
as no surprise, then, that dismissal of a single claim on
grounds unrelated to the sufficiency of the evidence did not
move the panel in Johnson to question the jury’s award of
punitive damages where another viable claim remained and
the evidence supporting the award was not impugned. The
general damages award in this case, however, is entirely com-
pensatory, so Johnson does not affect our analysis. Instead,
Barber controls and requires that we vacate the award.
II.
To be sure, the majority’s approach to the damages issue
holds a great deal of intuitive appeal. Its model vindicates the
will of the jury while promoting judicial economy and the
conservation of resources. Were we writing on a blank slate,
I would enthusiastically embrace its analysis. Constrained as
we are by our precedent, however, I must respectfully dissent
from Part IV of the majority opinion.
