Alston & Bird secured a groundbreaking jury verdict for Rockwell Automation, achieving a significant milestone for trademark owners who have long struggled to enforce their intellectual property rights against unauthorized gray market importers.
A jury in the United States District Court for the District of Delaware returned a verdict for Rockwell Automation against WiAutomation. With the Honorable Gregory B. Williams presiding, the jury found WiAutomation liable on five counts: Trademark Infringement, Counterfeiting, False Designation of Origin, Deceptive Trade Practices, and Unfair Competition.
The jury’s verdict was decisive, finding defendant’s wrongful conduct was willful. In addition to awarding the disgorgement of defendant’s profits, the jury also awarded Rockwell’s damages, statutory damages for counterfeiting, and punitive damages.
The jury was asked to find that the Rockwell-branded products sold by defendant were materially different than the genuine Rockwell products sold by Rockwell in the United States. The differences were non-physical differences, including the manufacturer’s warranty, customer support, product safety and recall notices, and other quality control differences. The application of the “Material Difference” test by the jury was a key issue in the case will provide a template for future jury trials involving gray market imports.
Notably, Rockwell was cleared to pursue its action against WiAutomation after the Supreme Court of the United States decided in the Hetronic case that federal trademark law does not apply to trademark infringement that takes place exclusively outside the US. Before the jury trial, the operators of WiAutomation had argued that the Hetronic decision meant that evidence about its trademark-infringing activities in Europe should not be considered by the court on the grounds of “extra-territoriality.” However, in one of the first tests of the Hetronic precedent, the court said that Hetronic does not prohibit Rockwell’s intended use of the foreign conduct and the parties should be prepared to proceed with the jury trial. In explaining its ruling, the court pointed to Rockwell’s intention to present information about the trademark-infringing activities as circumstantial evidence; also, the court emphasized that Rockwell did not seek damages for foreign sales or apply the Lanham Act to foreign sales at trial.
Representing Rockwell Automation in the case were Alston & Bird partners Paul Tanck, Chris McArdle, Neal McLaughlin, and Joshua Weeks, senior associate Andrew Ligotti, associate Matt Welch, and paralegal Stacy Gunder.