Intellectual Property Issues at Trade Shows
Trade shows play a vital role in conducting business effectively, but it pays to do the homework first to see how to protect your intellectual property and to avoid conflicts with the intellectual property rights of others.
by Y. Jae Kim
IF YOU WORK in any industry, chances are good that you have attended, displayed at, or worked at a trade show for that industry. And while trade shows are invaluable sources of exposure, education, contacts, and business deals, certain intellectual property (IP) issues can arise at trade shows that anyone involved should keep in mind. While your specific job function – be it engineering, marketing, or manufacturing – may not be related to the law, you would be surprised by the various IP issues that can arise at trade shows and that could directly impact you and your company.
IP can broadly be defined as subject matter that covers patents, trademarks, trade secrets, and copyright. While trademarks, trade secrets, and copyright issues may certainly come up at trade shows, this article focuses primarily on patent issues. In extreme cases, certain actions conducted at trade shows could cause your company to lose patent rights or may negatively impact your company's ability to protect its new and unpatented invention(s).
So what type of patent issues can arise at trade shows and how would they affect you or your company? For starters, your goods can be raided by the police if they believe you are displaying an allegedly infringing product. Further, your company may be sued for patent infringement by selling or offering to sell allegedly infringing products at a trade show. (For purposes of patent infringement, it does not matter where the sale or offer for sale occurs in the U.S. But trade shows are particularly of interest because of their general nature and purpose: to show and market goods.) And, if that is not enough, your company may be sued for merely bringing allegedly infringing products to a trade show.
What Constitutes Patent Infringement?
In general, you can be held liable for patent infringement in the U.S. if you, without the proper authorization:
1. Manufacture or make any patented product within the U.S.;
2. Use any patented product within the U.S;
3. Sell or offer to sell any patented product within the U.S.; or
4. Import, i.e., bring into, the U.S. any patented product.
For example, assume that you are a non-U.S. company, "Anywhere Co.," attending the annual Widget Expo as an exhibitor. Let's also assume that this is your first and only contact within the U.S. for which you are exhibiting, for the first time, your new Display Widget (DW). Lastly, let's assume that Acme Display Co. holds a valid and enforceable U.S. patent for a display widget that your DW infringes.
In this scenario, since the DW is an infringing product, Anywhere Co. can potentially be liable for patent infringement merely by bringing the DW into the U.S.; i.e., Anywhere Co. imported into the U.S., without authorization, a product covered by a U.S. patent held by Acme Display Co. This appears to fall within the letter of the law for patent infringement. But it may seem a little unfair to Anywhere Co. Can Anywhere Co. actually be hauled into a U.S. court and be forced to litigate a costly patent infringement case merely because it brought its DW product into the U.S.?
Apparently so, and that is essentially what happed to one Brazilian company by the name of G.M. Reis. G.M. Reis has no offices, employees, or assets in the U.S. and had only episodic contacts with the U.S. prior to being sued by Synthes, a U.S.-based company. In 2007, G.M. Reis purchased a booth at an orthopedic trade show in San Diego, California, to display (not sell or offer for sale in the U.S.) several of its bone-plate products that it brought into the U.S. At the trade show, Synthes served a complaint on G.M. Reis for patent infringement at its booth. The case went all the way to the United States Court of Appeals for the Federal Circuit, where the Court held that, yes, even with G.M. Reis's very minimal contacts with the U.S., jurisdiction by a U.S. District Court is reasonable and fair.1
Consider also the fairly recent raids and confiscation of goods from trade show exhibitors by the police in Germany. In March of 2008, more than 180 German police officers, customs officials, and prosecutors raided 55 exhibitors' booths for allegedly displaying infringing products at the CeBIT trade show.
Protecting Your Own IP in Public
Besides patent infringement issues, patent issues also arise at trade shows in the context of public disclosure. If your company is like most, you will be displaying some of your latest and greatest products at a trade show. However, by doing so without initially taking the proper measures, you may potentially forfeit your patent rights in any such disclosed product. This can occur because an invention can become publicly disclosed by being merely displayed as a device that embodies the invention at a trade show or is discussed with a potential customer at a trade show. This public disclosure starts a 1-year clock running on a statutory bar in the U.S. in which to file for patent protection on the invention. Outside the U.S., your patent rights can even be forfeited entirely by your public disclosure.
Your Trade Show To-Do List
Here are a few things to keep in mind before going to a trade show:
(1) If you are a foreign entity bringing products into the U.S. for a trade show, remember that such actions can constitute importation of the product. Do your homework and be mindful of the patent landscape in your industry. Defending a patent litigation is potentially very expensive.
(2) Assuming you are not importing a product into the U.S., patent infringement can also arise when there is a "use," a "sale," or an "offer for sale" of an allegedly infringing product without the proper authorization of the patent holder. However, there is some good news in that the Courts have held that "the mere demonstration or display of an accused product, even in an obviously commercial atmosphere"2 does not give rise to an act of patent infringement. Further, in order for there to be an offer for sale of an allegedly infringing product, such activity must include pricing terms. Thus, to avoid falling under the realm of an "offer for sale," you should avoid discussing pricing as much as possible. As for a sale of an allegedly infringing product, that is pretty straight forward; no sale, no act of infringement.
(3) While you may not be directly involved in protecting your company's intellectual property at a trade show, speak to your company's IP representative or IP counsel to confirm that your activities and the products you are showing will not jeopardize any potential intellectual property rights. If you are displaying or would like to display a new product, discuss it with your IP counsel and take the proper measures. For example, your company may want to file a patent application to cover any new product designs before a public disclosure is made. An ounce of prevention can be worth several million dollars when it comes to patent rights and patent litigation.
(4) Trade shows are often a venue in which violations of IP rights are discovered. Since enforcement of IP rights is a self-policing activity, you should keep an eye out for what may be a violation of your company's patent, trademark, copyright, and even trade secret rights.
(5) If you come across potential infringement of your company's product at a trade show, you must also be mindful of declaratory judgment actions; i.e., if a party is threatened or believes that it may be sued for infringement, that party may have the right to file suit first, which may provide it with certain advantages in litigation, such as choice of forum (i.e., where the suit will be tried). Thus, it is best to discuss the potential infringement with your company's IP representative or IP counsel before confronting a potential infringer at a trade show.
(6) Lastly, if you are a U.S. entity attending or displaying at a trade show outside the U.S., remember that your U.S. patent and other U.S. intellectual property rights are only valid in the U.S. Someone else, or nobody, may own intellectual property rights that cover your products outside of the U.S. So again, do your homework and work with your IP counsel or IP representative to see what measures need to be taken to avoid conflicts with the IP rights of others. The U.S. Department of Commerce also provides valuable information and strategies for handling IP issues outside the U.S. And do not forget that international trade shows offer excellent opportunities for monitoring international infringement of your IP rights.
Be Forewarned and Forearmed
None of the above is meant to discourage anyone from attending or exhibiting at trade shows. As you are likely aware, trade shows represent an opportunity for companies to see and be seen, to share information and discover synergies, that is really unparalleled by any other platform. But it is a good idea to be aware of the potential pitfalls before you or your company sets foot on the trade-show floor. Armed with all the pertinent facts and necessary prep work regarding your IP and the IP of others, you can then relax and enjoy all that the show has to offer.
1Synthes (U.S.A.) v. G. M. dos Reis Jr. Ind. Com. De Equip. Medico, No. 2008-1279 (Fed. Cir. April 17, 2009).
2Medical Solutions, Inc. v. C Change Surgical LLC, 541 F.3d 1136 (Fed. Cir. 2008). •