Guest Post by Prof. Trimble: The False Sense of Victory in Bypassing The Hague Convention on Service of Process

Guest Post by Professor Marketa Trimble, Samuel S. Lionel Professor of Intellectual Property Law, University of Nevada, Las Vegas William S. Boyd School of Law.  Professor Trimble specializes in international intellectual property law, and is the author of Global Patents: Limits of Transnational Enforcement (Oxford Univ. Press 2021) and co-author with Paul Goldstein of International Intellectual Property Law, Cases and Materials (Foundation Press 5th ed. 2019).

On September 10, 2021, the U.S. Court of Appeals for the Federal Circuit denied mandamus in In re OnePlus Tech. (Shenzhen) Co., confirming that the plaintiff may bypass Article 5 of the Hague Convention on the Service of Process and serve the Chinese defendant through alternative service to attorneys located in California who had represented the defendant in the past. Commentators heralded the decision as an important improvement in the enforcement of patent rights against foreign, and in particular Chinese, defendants (Law360). However, in many IP cases involving foreign defendants, this sense of victory might be premature.

What ultimately matters is whether a judgment resulting from a U.S. dispute is enforceable—either in the United States or abroad. If a foreign defendant has assets in the United States and a U.S. judgment can be enforced in the United States, bypassing The Hague Convention does not matter. But if a foreign defendant has no assets in the United States and a plaintiff must seek enforcement of a U.S. judgment abroad, bypassing the Convention—even if the end run is sanctioned by a U.S. court and is legal under U.S. law—might be for naught. Once a plaintiff requests recognition and enforcement of a U.S. judgment abroad, a foreign court may deny recognition and enforcement of the judgment if a defendant was not served in accordance with The Hague Convention. Avoiding recognition and enforcement abroad is not always possible; the August 2021 decision in Next Investments, LLC v. Bank of China shows that seizing a defendant’s foreign accounts by using the U.S. branches of Chinese banks might not work.

Countries entered into The Hague Convention to ensure that documents would be served on their citizens in a manner that comports with the countries’ sense of due process. The Convention (the full title is Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters) allows countries to permit easier and faster alternative means of service if they wish to do so, but China is one of the countries that filed a declaration opposing the use of such alternative means. Therefore, in China the only service that is compliant with the Convention is through the Convention’s Article 5 mechanism via the Central Authority.

The penalty for not using the Convention’s Article 5 mechanism can be high. Not surprisingly, countries that are parties to the Convention (currently, 79 countries) want to ensure that the Convention is being followed, and courts in these countries may therefore deny recognition and enforcement to a foreign judgment that stems from a proceeding in which a defendant (who is foreign to the court that issued the judgment) was not served in accordance with the Convention. Courts in some countries are willing to recognize and enforce a foreign judgment even if service was not compliant with the Convention if proof of actual service abroad exists from the original court proceeding. A defendant’s voluntary acceptance of alternative service might also satisfy a court’s expectations of due process, and apparently the Supreme Court of the People’s Republic of China has also made such a decision in a case when a Chinese court permitted an alternative means of service on a defendant outside of China.

The Hague Convention’s age of 56 years raises legitimate questions about its utility in today’s world. However, the likelihood that countries will replace it with an updated convention seems remote; the negotiations of the new Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (not yet in force) proved that an agreement by countries on conflict-of-laws issues in transnational disputes remains difficult, and the new Convention was achieved only when IP disputes were excluded from the scope of the Convention. With the anti-suit injunction war raging in SEP cases and Chinese courts being more assertive in transnational litigation, the U.S. IP bar’s view might finally evolve in favor of an international convention on transnational conflict-of-laws matters in IP disputes. Some models exist in academic projects that have developed principles and guidelines for such matters; the latest and most international of the projects resulted in the Kyoto Guidelines that the International Law Association adopted in December 2020.

3 thoughts on “Guest Post by Prof. Trimble: The False Sense of Victory in Bypassing The Hague Convention on Service of Process

  1. 2

    With respect, this comment from the post makes very little sense to me in the context of judgment enforcement in China:

    > Once a plaintiff requests recognition and enforcement of a U.S. judgment
    > abroad, a foreign court may deny recognition and enforcement of the
    > judgment if a defendant was not served in accordance with
    > The Hague Convention.

    Let’s me a little more realistic here, guys; if you’re trying to enforce a U.S. judgment in China based on patent infringement, compliance with the Hague Convention is not really going to help you.

    Courts in China will almost certainly not enforce a patent infringement judgment issued by a U.S. court, period, regardless of the manner of service. Chinese courts to date have only recognized a handful of U.S.-based judgments (like fewer than five–ever), and those were straightforward commercial disputes. And given the broader conflicts between U.S. and Chinese courts when it comes to patents (as you’re seeing with multinational FRAND disputes), it’s hard to imagine that a U.S. judgment for patent infringement wouldn’t be completely DOA in a Chinese court.

  2. 1

    Thanks for this guest post. When the OnePlus mandamus decision came out, I was somewhat troubled by the fact that alternative service could be ordered so easily simply because complying with the Hague Convention would be too much of a “burden.”

    If anyone is interested in this, you should read the amicus brief filed by TP-Link in connection with OnePlus’s mandamus petition. It appears Judge Albright has yet another magnet for getting patent cases filed in Waco — granting requests for alternative service to avoid the Hague Convention.

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