## Facts

- Hetronic International, Inc., a U.S. manufacturer of radio remote controls for heavy equipment, used European entities and an individual as exclusive distributors in parts of Europe for nearly a decade.
- After the distribution relationship deteriorated, the defendants asserted—based on their interpretation of an earlier R&D agreement—that they owned Hetronic’s trademarks and related intellectual property.
- Defendants began producing identical “copycat” remote controls, affixed Hetronic’s trademarks and product names to those products, and sold them primarily in Europe, including after Hetronic terminated the agreements.
- Hetronic alleged the conduct diverted tens of millions of dollars in sales and goodwill and created confusion affecting U.S. commerce; some accused products entered U.S. commerce, and defendants conceded that more than €1.7 million in sales ultimately reached the United States.
- Hetronic sued in federal court asserting Lanham Act trademark claims and related state-law claims, seeking damages and injunctive relief.
- A jury awarded Hetronic over $100 million in damages, largely tied to trademark infringement, and the district court entered a worldwide injunction barring sales of infringing products.
- Defendants appealed, contesting (among other issues) forum and jurisdiction rulings, Lanham Act coverage of foreign sales, scope of the injunction, preclusion of the IP-ownership defense, and the damages proof.

## Issues

1. Whether successor or purchasing entities were bound by a forum-selection clause in the original distribution/licensing agreements requiring litigation in Oklahoma.
2. Whether exercising personal jurisdiction over foreign owner/holding entities comported with due process.
3. Whether the Lanham Act could reach defendants’ largely foreign sales to foreign customers when the conduct had substantial effects on U.S. commerce.
4. Whether the worldwide injunction satisfied Rule 65’s specificity requirement and whether its scope was impermissibly broad.
5. Whether issue preclusion barred defendants from asserting ownership of the relevant trademarks and related IP as a defense.
6. Whether the damages expert’s opinions regarding expenses and profit offsets had an adequate evidentiary foundation.

## Decision

- Affirmed that purchasing/successor entities were bound by the forum-selection clause.
- Affirmed that exercising personal jurisdiction over the foreign owner/holding entities comported with due process.
- Affirmed application of the Lanham Act to defendants’ foreign conduct based on substantial effects on U.S. commerce.
- Affirmed that the injunction was sufficiently specific under Rule 65.
- Reversed in part because the worldwide injunction was overly broad; the court narrowed the injunction and remanded for modification.
- Affirmed issue preclusion barring defendants’ IP-ownership defense.
- Reversed in part because the damages expert’s expense/profit-offset opinions lacked foundation; remanded for reconsideration or recalculation consistent with the opinion.
- Overall disposition: affirmed in part, reversed in part, and remanded.

## Legal Principles

- Forum-selection clauses may bind purchasing or successor entities that assume contractual rights and obligations and continue to benefit from the agreement.
- Personal jurisdiction over foreign defendants is consistent with due process when they purposefully establish and maintain significant forum-directed relationships and their alleged misconduct causes forum-related harms.
- The Lanham Act may apply to foreign conduct when that conduct has a sufficiently substantial effect on U.S. commerce, including where infringing goods enter U.S. channels and cause U.S. consumer confusion or diversion of U.S.-connected goodwill.
- Injunctions must describe prohibited conduct with sufficient specificity under Rule 65, but equitable relief should not extend beyond what is justified by the governing law and the case’s U.S. commercial nexus.
- Issue preclusion prevents relitigation of previously resolved ownership questions, barring an IP-ownership defense when the ownership issue was conclusively decided against the defendants.
- Expert damages testimony must rest on an adequate evidentiary foundation; unsupported estimates of costs or offsets may require adjustment or retrial of damages-related determinations.

## Conclusion

The court largely upheld liability findings and key procedural rulings, including forum enforcement, personal jurisdiction, and Lanham Act coverage based on substantial U.S. commercial effects, but required narrowing of an overbroad worldwide injunction and correction of damages calculations lacking adequate evidentiary support.


Hetronic Int'l, Inc. v. Hetronic Germany GmbH, 10 F.4th 1016 (10th Cir. 2021)