60 F.4th 119
4th Cir.2023Background
- dmarcian, Inc. (dInc), a North Carolina–based Delaware corporation, orally licensed its software to dmarcian Europe BV (dBV) in 2016 to sell in Europe and Africa; the parties collaborated for years and dInc shared source code, customer leads, and technical support.
- Relations soured in 2019–2020 after disputes over code ownership; Dutch proceedings (Enterprise Chamber and Rotterdam Court) followed and a Dutch manager was appointed for dBV.
- dInc filed suit in the Western District of North Carolina in March 2021 asserting copyright, Lanham Act (trademark), trade-secret (DTSA and state) and tortious-interference claims, and sought interim relief.
- The district court denied dismissal for lack of personal jurisdiction and for forum non conveniens, granted a preliminary injunction restricting dBV’s use of dInc’s IP (including required disclaimers), and later found dBV in civil contempt for noncompliance.
- The district court imposed a $5,000-per-day contempt sanction (totaling $335,000 for 67 days). dBV appealed; the Fourth Circuit affirmed jurisdiction, forum non conveniens denial, and the injunction, but vacated and remanded the sanction amount.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction | dInc: N.C. long-arm §§1‑75.4(4)(a) & (5)(b) apply because dInc performed services in NC for dBV and dBV purposefully availed itself via regular contacts and collaboration. | dBV: foreign entity with no offices in NC; contacts insufficient for specific jurisdiction. | Affirmed: long‑arm applies and due‑process purposeful‑availment, nexus, and reasonableness prongs satisfied. |
| Forum non conveniens | dInc: Dutch courts cannot adequately adjudicate/enforce U.S. trademark claims; U.S. forum necessary to protect U.S. IP rights. | dBV: Netherlands is an available, adequate, and more convenient forum. | Affirmed: district court did not abuse discretion; Dutch forum inadequate for U.S. trademark remedies. |
| Preliminary injunction (merits) | dInc: likely to prevail on copyright, Lanham Act, DTSA, and tortious‑interference claims because dBV exceeded license scope and directed harmful conduct at U.S. commerce/customers. | dBV: extraterritoriality bars U.S. law; Dutch litigation and alleged license limit U.S. relief. | Affirmed: dInc likely to succeed on those claims; injunction narrowly tailored and not an abuse of discretion. |
| Contempt & sanctions | dInc: dBV violated injunction by using the “dmarcian” mark/websites without required disclaimers; damages result from consumer confusion. | dBV: believed it complied (domain use), injunction ambiguous, and $5,000/day sanction is excessive and unjustified. | Mixed: contempt finding affirmed; monetary sanction affirmed as to liability but vacated/remanded for recalculation because district court failed to justify the $5,000/day compensatory measure. |
Key Cases Cited
- Grayson v. Anderson, 816 F.3d 262 (4th Cir. 2016) (plaintiff bears burden to establish personal jurisdiction when defendant contests it)
- Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553 (4th Cir. 2014) (framework for long‑arm statute and purposeful availment in forum contacts cases)
- UMG Recordings, Inc. v. Kurbanov, 963 F.3d 344 (4th Cir. 2020) (nonexhaustive factors for purposeful‑availment analysis)
- Walden v. Fiore, 571 U.S. 277 (2014) (contacts with forum must show defendant purposefully availed itself of the forum)
- Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981) (three‑part forum non conveniens framework)
- Steele v. Bulova Watch Co., 344 U.S. 280 (1952) (factors for Lanham Act extraterritorial application)
- Winter v. Nat. Res. Def. Council, 555 U.S. 7 (2008) (standard for preliminary injunctions)
- Goodyear Tire & Rubber Co. v. Haeger, 581 U.S. 101 (2017) (limits on contempt sanctions and distinction between coercive and compensatory sanctions)
- Hecht Co. v. Bowles, 321 U.S. 321 (1944) (preliminary injunctions to preserve the status quo pending trial)