Navigating the Complexities of Serving Legal Documents to Chinese Defendants in IP Litigation

Introduction.

In today's globalized economy, intellectual property (IP) disputes increasingly involve parties from different countries. For U.S. companies protecting their IP rights against infringement by Chinese entities, one of the first hurdles is properly serving legal documents on defendants located in China. This process, while seemingly straightforward, can be fraught with complexities due to international agreements, differing legal systems, and potential delays. This article aims to guide IP practitioners through the intricacies of serving defendants in China, with a focus on copyright and DMCA-related litigation.

1. The Hague Service Convention: The Foundation for International Service

The primary framework for serving legal documents internationally is the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, commonly known as the Hague Service Convention. Both the United States and China are signatories to this treaty, which means that service of process in China must generally comply with its provisions.

Key points about the Hague Service Convention:

• Purpose: To provide a simpler way to serve process abroad and ensure defendants in foreign jurisdictions receive actual and timely notice of suits.
• Scope: Applies to all civil and commercial matters where there is a need to transmit judicial or extrajudicial documents for service abroad.
• Mechanism: Establishes a system of Central Authorities in each member country to receive and process service requests.

2. The Process of Serving Documents in China

Step 1: Hire an International Process Server

The first crucial step is to engage an international process server with experience in handling service under the Hague Convention, particularly in China. This expertise is vital given the complexities involved and the potential consequences of improper service.

Step 2: Prepare the Legal Documents

All legal documents, including the complaint, summons, and any supporting documents, must be prepared and then translated into Chinese. The translation must be certified by a Chinese translator or the Chinese Embassy to ensure its accuracy and admissibility.

Step 3: File the Legal Documents with the U.S. Court

Once prepared, the documents must be filed with the appropriate U.S. court, which will issue a summons for service on the Chinese defendant.

Step 4: Submit Documents to the Chinese Central Authority

Under the Hague Convention, service in China must be carried out through the designated Chinese Central Authority, which is the Bureau of International Judicial Assistance, Ministry of Justice of the People's Republic of China.

The process involves:

a) Completing a Request for Service form (USM-94) b) Submitting the form along with: - Original English versions of all documents (summons must bear the court seal) - Certified Chinese translations of all documents - Photocopies of all the above

Step 5: Service by the Chinese Central Authority

The Chinese Central Authority will forward the documents to the appropriate local court or authority for service on the defendant in accordance with Chinese law.

Step 6: Follow-up and Proof of Service

After service is completed, the process server should obtain proof of service, including an affidavit detailing the date, time, and manner of service. This proof is crucial for establishing proper jurisdiction in U.S. courts.

3. Challenges and Considerations

Time Delays

One of the most significant challenges in serving Chinese defendants is the potential for lengthy delays. While the Chinese Ministry of Justice has stated that it typically takes 3-6 months to execute service requests, in reality, some requests have been pending for up to two years due to backlogs. IP litigators must factor these potential delays into their overall litigation strategy and timelines.

Exclusivity of the Hague Convention

Most U.S. courts have concluded that when applicable, the Hague Service Convention must be used exclusively, preempting other service mechanisms authorized by the Federal Rules of Civil Procedure or state laws. This interpretation is based on the Constitution's Supremacy Clause and the Convention's mandatory language.

China's position on the exclusivity of the Convention is not entirely clear, but it appears that China will not recognize non-Convention methods when dealing with countries that have a treaty relationship with China. This stance is supported by Chapter 29, Article 263 of the Civil Procedure Law of the People's Republic of China.

Alternative Service Methods

The Hague Convention does provide for some alternative service methods in Articles 8 and 10, but these are subject to objections by member states. Importantly, China has objected to the alternative methods outlined in Article 10, including:

• Service by mail
• Direct service through judicial officers, officials, or other competent persons

These methods should not be used when serving defendants in China, as they may invalidate jurisdiction in U.S. courts and create enforcement problems in China.

Service through U.S. Diplomatic or Consular Agents

While China allows service directly through U.S. diplomatic or consular agents when the document is to be served upon a U.S. national, this method is generally not available to U.S. litigants. U.S. Consular Regulations prohibit U.S. diplomatic or consular officers from serving legal process on behalf of U.S. litigants except when expressly authorized.

4. Special Considerations for IP and DMCA-Related Litigation

When dealing with intellectual property disputes, particularly those involving DMCA complaints or copyright infringement, there are additional factors to consider:

• (a) Nature of IP Rights: The territorial nature of IP rights can complicate international disputes. Ensure that your claims are valid under both U.S. and Chinese law, if applicable.

• (b) Time Sensitivity: IP infringement, especially online copyright violations, can cause rapid and significant damage. The potential for lengthy service delays in China must be weighed against the urgency of stopping the infringing activity.

• (c) Interim Measures: Consider whether interim measures, such as temporary restraining orders or preliminary injunctions, may be necessary to protect your client's IP rights during the service process.

• (d) Alternative Dispute Resolution: Given the complexities and potential delays in serving Chinese defendants, explore whether alternative dispute resolution methods, such as mediation or arbitration, might be more efficient for resolving the IP dispute.

5. Potential Workarounds: The California Example

A recent California Supreme Court decision in Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Technology Co., Ltd (2020) may offer a potential workaround to the Hague Service Convention requirements in certain circumstances.

Key points from the case:

• The parties had entered into a Memorandum of Understanding (MOU) that included specific provisions about jurisdiction and notice.
• The MOU stated that the parties submitted to the jurisdiction of California courts and consented to service of process via Federal Express.
• The California Supreme Court held that this agreement constituted a waiver of formal service of process under California law, and thus there was no required transmittal abroad to which the Hague Service Convention would apply.

Implications for IP Practitioners:

While this decision is specific to California, it highlights the importance of careful contract drafting in international business relationships. When negotiating agreements with Chinese entities, consider including provisions that:

1. Explicitly submit to the jurisdiction of U.S. courts (or a specific state's courts).
2. Waive formal service of process in favor of a specified notification method (e.g., Federal Express).
3. Consent to service of process in accordance with the agreed notification method.

Such provisions could potentially streamline the process of initiating legal proceedings in the event of an IP dispute, bypassing the need for service through the Hague Convention mechanisms.

However, it's crucial to note that:

• This approach may not be recognized in all jurisdictions.
• The enforceability of such provisions in China may be questionable.
• It does not guarantee that a resulting judgment would be enforceable in China.

6. Best Practices for IP Practitioners

Given the complexities involved in serving Chinese defendants, here are some best practices for IP practitioners to consider:

• (a) Proactive Contract Drafting: When advising clients on international business agreements, especially those involving Chinese entities, include clear provisions on jurisdiction, service of process, and dispute resolution mechanisms.

• (b) Early Case Assessment: Conduct a thorough early case assessment to determine the feasibility and potential timeline of litigation against a Chinese defendant. Consider the potential for delays in service and how this might impact the overall strategy.

• (c) Explore Alternative Dispute Resolution: Given the challenges of litigating against Chinese defendants, consider whether arbitration or mediation might be more effective for resolving IP disputes.

• (d) Comprehensive Documentation: Ensure all necessary documents are meticulously prepared, accurately translated, and properly certified to avoid delays or rejections in the service process.

• (e) Engage Experienced Professionals: Work with international process servers and local counsel in China who have specific experience with the Hague Convention and Chinese legal system.

• (f) Consider Parallel Strategies: While pursuing service through the Hague Convention, explore other strategies to protect your client's IP rights, such as takedown notices to online platforms or customs seizures.

• (g) Stay Informed: Keep abreast of developments in international service of process laws and any changes in China's approach to the Hague Convention.

• (h) Client Education: Educate clients about the potential challenges and delays involved in serving Chinese defendants. Set realistic expectations about timelines and potential outcomes.

Conclusion.

Serving legal documents on Chinese defendants in IP litigation presents unique challenges that require careful navigation of international treaties, domestic laws, and practical realities. While the Hague Service Convention provides a framework for international service, its application in China can be time-consuming and complex.

IP practitioners must be prepared to deal with potential delays, understand the limitations on alternative service methods, and consider innovative approaches like those recognized in the California Rockefeller case. By adopting best practices in contract drafting, case assessment, and litigation strategy, attorneys can better position their clients for success in protecting their intellectual property rights against infringement by Chinese entities.

As the global IP landscape continues to evolve, staying informed about international service processes and maintaining flexibility in dispute resolution strategies will be crucial for effectively representing clients in cross-border IP disputes involving Chinese defendants.