Tire Engineering & Distribution, LLC v. Shandong Linglong Rubber Co.

Affirmed in part, reversed in part, and vacated in part by published PER CURIAM opinion. Judge DIAZ wrote an opinion dissenting in part.

OPINION

Alpha,1 a domestic producer of mining *298tires, sued Al Dobowi2 and Linglong,3 foreign corporations. Alpha alleged that the defendants conspired to steal its tire blueprints, produce infringing tires, and sell them to entities that had formerly purchased products from Alpha. A jury found in favor of Alpha on all claims submitted to it, awarding the company $26 million in damages. The district court upheld the damages award against the defendants’ post-trial challenges. Al Dobowi and Linglong appeal, contesting the verdict and the district court’s exercise of personal jurisdiction.

We initially hold that the district court properly exercised jurisdiction over Al Dobowi and Linglong. We affirm the district court’s judgment that Al Dobowi and Linglong are liable to Alpha under the Copyright Act and for conversion under Virginia law, but we dismiss the remaining theories of liability submitted to the jury. We affirm the jury’s damages award.4 As a final matter, we vacate the district court’s award of attorneys’ fees.

I.

A.

Because the jury returned a verdict in favor of Alpha, we view the evidence in the light most favorable to that party, giving it the benefit of all inferences. Duke v. Uniroyal Inc., 928 F.2d 1413, 1417 (4th Cir. 1991). Any factual findings made by the district court are subject to clear-error review. CFA Inst. v. Inst. of Chartered Fin. Analysts of India, 551 F.3d 285, 292 (4th Cir.2009).

Alpha develops and sells specialized tires for underground mining vehicles. Prior to 2005 and the events giving rise to this suit, Alpha flourished in the mining-tire market with its unique and effective designs. To protect its intellectual property and brand, Alpha obtained copyrights for its designs and a trademark for its “Mine Mauler” product name. Alpha also closely guarded its blueprints, as with these in hand any manufacturer could copy the company’s distinctive tires and jeopardize its market position.

In May 2005, John Canning, a former employee of Alpha, organized a meeting at a hotel in Richmond, Virginia. Canning invited Sam Vance, an employee of Alpha; and Surender Kandhari, the chairman of defendant Al Dobowi, to attend and discuss prospects for Al Dobowi’s entry into the mining-tire business. Vance offered to supply Al Dobowi with Alpha’s blueprints, customer list, and cost information. The three men discussed the possibility of Al Dobowi’s using this information to produce and sell a line of mining tires that copied Alpha’s designs and challenged its place in the tire market.

Following the meeting, Vance began working from his home in Tazewell, Virginia on a business plan, which anticipated selling tires in both the United States and abroad. Kandhari received Vance’s business plan, at which point he formally welcomed Vance to Al Dobowi. Kandhari ex*299plained that he “want[ed] [Vance] on board” and “definitely expect[ed] [him] to be full time committed in developing business.” J.A. 1367. Kandhari proposed that Vance take a position with A1 Dobowi as the “Business Development Director for an AL DOBOWI group company based in the USA.” Id. Throughout their correspondence that summer, Vance and Kandhari referred to Vance’s Virginia home as a satellite office of A1 Dobowi.

With the blueprints in their possession, Vance, Kandhari, and Canning set out to find a tire manufacturer to produce mining tires based on Alpha’s designs. They found a willing partner in Linglong, and by the end of that summer Linglong had agreed to manufacture a range of mining tires pursuant to Alpha’s blueprints. From the beginning of the relationship, Linglong knew that the blueprints had been stolen. In a September email, Vance and a Linglong representative discussed taking steps to slightly modify their tires to make it less obvious that they had copied Alpha’s designs. Linglong further recognized that Vance was performing work from his office in Virginia. Indeed, in that same email Vance noted that he had been modifying the designs from his Tazewell office.

Their relationship having been formalized, A1 Dobowi and Linglong began the manufacturing process. Linglong produced a range of mining tires based on Alpha’s designs. A1 Dobowi began to sell the tires in early 2006 under the name Infinity. A1 Dobowi convinced Sandvik, one of the largest manufacturers of underground mining equipment, to purchase tires from it instead of Alpha. By July 2006, Vance had abandoned his Virginia office and moved permanently to China.

During the winter of 2006, Jordan Fish-man, founder and CEO of Alpha, began to suspect that Vance had stolen Alpha’s blueprints and given them to A1 Dobowi. Fishman saw an Infinity tire catalogue, which featured products almost identical to Alpha’s. He confirmed his suspicions at a trade show in the fall of 2006, where he saw the Infinity tires up close and was struck by their similarity to Alpha’s line of tires.

B.

On October 28, 2009, Alpha filed suit against A1 Dobowi and Linglong.5 Alpha’s amended complaint included nine counts arising out of A1 Dobowi and Linglong’s conversion of its blueprints and sale of infringing tires.

A1 Dobowi and Linglong (“Appellants”) first moved to dismiss the action for lack of personal jurisdiction. The district court denied the motion, stating in open court that “there is a prima facie basis for showing personal jurisdiction.” J.A. 143. Appellants then moved for summary judgment on all claims. The district court granted the motion as to four of the nine claims raised by Alpha. With regard to the remaining counts, the court dismissed all claims barred by the applicable statutes of limitations. Relevant here, the court dismissed all claims under the Copyright Act that accrued prior to October 28, 2006. It also dismissed in its entirety Alpha’s claim under the Virginia business-conspiracy statute, Va.Code Ann. §§ 18.2-499 to 500, finding it barred by Virginia’s two-*300year statute of limitations governing actions for personal injuries.

The parties proceeded to a jury trial. Alpha presented evidence establishing that Al Dobowi and Linglong had conspired to steal its blueprints and use them to manufacture infringing tires, which they then sold to Alpha’s former customers. Alpha’s damages expert testified that the company had suffered $36 million in damages as a result of Appellants’ unlawful acts.

The court submitted five counts to the jury: (1) violation of the federal Copyright Act, 17 U.S.C. § 101 et seq.; (2) violation of the federal Lanham Act, 15 U.S.C. § 1051 et seq., as to registered trademarks; (3) violation of the Lanham Act as to unregistered trademarks; (4) common-law conversion; and (5) common-law civil conspiracy. Important to our disposition, the court instructed the jury as follows on the Copyright Act claim:

[CJopyright laws generally do not apply to infringement that occurs outside of the United States. However, if you find that plaintiffs proved that the infringing acts outside of the United States were a consequence or result of predicate infringing acts that occurred inside the United Stated [sic], then you may consider those infringing acts that occurred outside the United States.

J.A. 1107-08. If the jury found in favor of Alpha on the copyright claim, the court instructed it to award damages equal to Appellants’ total profit attributable to the infringement.

The jury returned a verdict in favor of Alpha on all counts, awarding it $26 million in damages. Because the jury found that Appellants were engaged in a conspiracy, Appellants were adjudged jointly liable for the total damages award.

Appellants first contested the verdict in a Rule 50(b) renewed motion for judgment as a matter of law. The district court upheld the verdict in part and sustained the damages award. First, the court reiterated that it properly exercised personal jurisdiction over Appellants. Moving to the merits, it found unavailing Appellants’ challenges to liability under the conversion, conspiracy, and Copyright Act claims. Appellants’ contentions regarding the validity of the Lanham Act claims fared better. Holding that Alpha presented insufficient evidence to support a finding of liability on the majority of its trademark claims, the court dismissed Alpha’s registered-trademark claim in its entirety and upheld its unregistered-trademark claim as to only two of eleven marks. Finally, the court ruled that the jury’s damages award was reasonable.

Appellants then filed a Rule 59 motion for a new trial, arguing principally that the damages award was unsustainable in view of the court’s dismissal of the majority of Alpha’s trademark claims, on which the jury may have relied in calculating damages. The district court denied the motion. The court reasoned that the measure of damages was the same for all counts, and dismissal of some claims did not disturb the overall award because the remaining claims supported the award in full.

In a later order, the court awarded Alpha $632,377.50 in attorneys’ fees, concluding that Appellants’ violation of the Lanham Act provided the sole basis for the award.

This appeal followed.

II.

We first consider Appellants’ challenge to the district court’s exercise of personal jurisdiction over them. We review de novo whether the district court possessed jurisdiction, though the court’s factual findings are reviewed for clear error. *301CFA Inst., 551 F.3d at 292. Characterizing their contacts with the forum state as negligible, Appellants contend that the Fourteenth Amendment’s Due Process Clause protects them from being forced to litigate in Virginia.

Appellants’ argument is unavailing. Evidence presented at trial and the district court’s factual findings establish specific jurisdiction over Appellants.6 Both Al Dobowi and Linglong possessed sufficient contacts with Virginia such that the district court’s exercise of personal jurisdiction was consistent with the demands of due process.

A.

A lawful assertion of personal jurisdiction over a defendant requires satisfying the standards of the forum state’s long-arm statute and respecting the safeguards enshrined in the Fourteenth Amendment’s Due Process Clause. CFA Inst., 551 F.3d at 292. If a potential exercise of jurisdiction comports with the state’s long-arm statute, the Constitution “requires that the defendant have sufficient minimum contacts with the forum state.” Id. Because Virginia’s long-arm statute extends personal jurisdiction to the outer bounds of due process, the two-prong test collapses into a single inquiry when Virginia is the forum state. Id. at 293. A Virginia court thus has jurisdiction over a nonresident defendant if the exercise of such jurisdiction is consonant with the strictures of due process.

The Due Process Clause contemplates that a court may assert jurisdiction over a nonresident defendant through either of two independent avenues. First, a court may find specific jurisdiction “based on conduct connected to the suit.” ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 711 (4th Cir.2002). “If the defendant’s contacts with the State are also the basis for the suit, those contacts may establish specific jurisdiction.” Id. at 712. Second, a court may exercise personal jurisdiction under the theory of general jurisdiction, which requires a more demanding showing of “continuous and systematic” activities in the forum state. Id. Alpha argues only that the court possessed specific jurisdiction over Appellants, so our analysis is confined to that model.

Fairness is the touchstone of the jurisdictional inquiry, and the “ ‘minimum contacts’ test is premised on the concept that a corporation that enjoys the privilege of conducting business within a state bears the reciprocal obligation of answering to legal proceedings there.” CFA Inst., 551 F.3d at 293. In the context of specific jurisdiction, “the relevant conduct [must] have [only] such a connection with the forum state that it is fair for the defendant to defend itself in that state.” Id. at 292 n. 15. We do more than formulaically count contacts, instead taking into account the qualitative nature of each of the defendant’s connections to the forum state. In that vein, “a single act by a defendant can be sufficient to satisfy the necessary ‘quality and nature’ of such minimal contacts, although ‘casual’ or ‘isolated’ contacts are insufficient to trigger” an obligation to litigate in the forum. Id. at 293 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 317-18, 66 S.Ct. 154, 90 L.Ed. 95 (1945)).

We consider three factors when determining whether a court has personal *302jurisdiction over a nonresident defendant: (1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the forum state; (2) whether the plaintiffs claims arise out of those activities; and (3) whether the exercise of personal jurisdiction is constitutionally reasonable. Id. at 294.

First, we must conclude that a nonresident defendant purposefully availed itself of the privilege of conducting activities in the forum state to authorize the. exercise of personal jurisdiction over the defendant. The purposeful-availment test is flexible, and our analysis proceeds on a case-by-case basis. Through our recent decisions we can glean a basic outline of the doctrine.

We have found purposeful availment where a defendant substantially collaborated with a forum resident and that joint enterprise constituted an integral element of the dispute. In CFA Institute, we noted that the defendant contacted the plaintiff, which “sparked ongoing business transactions, by which [defendant] repeatedly reached into Virginia to transact business with [plaintiff], invoking the benefits and protections of Virginia law.” Id. at 295. In particular, a representative of the defendant visited the plaintiffs office in the forum state, after which the parties substantially corresponded and collaborated from afar. Id. at 294-95. Where such minimum contacts are present, that the defendant did not initiate the contacts does not bar a judicial finding of purposeful availment. Christian Science Bd. of Dirs. v. Nolan, 259 F.3d 209, 216 (4th Cir.2001).

In contrast, we have determined that purposeful availment was lacking in cases in which the locus of the parties’ interaction was overwhelmingly abroad. We dismissed both defendants from the action in Consulting Engineers Corp. v. Geometric Ltd., 561 F.3d 273 (4th Cir.2009), finding that neither had purposefully availed itself of the privilege of conducting activities in Virginia, the forum state. One defendant maintained no offices, conducted no ongoing business, and made no in-person contact with the plaintiff in the forum state. Id. at 279-80. Though the defendant discussed entering an agreement with a Virginia resident, any work contemplated would have been performed in India and no agreement was ever executed. Id. at 280. Moreover, the activity giving rise to the claim occurred in India, not Virginia. Id. “On these facts,” we wrote, “[defendant’s] contact with Virginia was simply too attenuated to justify the exercise of personal jurisdiction.” Id. The second defendant similarly lacked sufficient contacts with the forum state. It, too, maintained no offices in Virginia, and none of its employees had ever traveled there. Id. at 281. The activity complained of took place in India, and the alleged conspiracy was hatched outside of the forum state. Id. at 282. Although this defendant exchanged four brief emails and had several phone conversations with the Virginia-based plaintiff about contractual negotiations, we concluded that these contacts were qualitatively insufficient to show purposeful availment. Id. at 281-82.

A similarly overpowering foreign nexus to the dispute in Foster v. Arletty 3 Sarl, 278 F.3d 409 (4th Cir.2002), militated against a finding of purposeful availment. As in Consulting Engineers, we found it important that the defendants in Foster had no offices or employees in the forum state. Id. at 415. Fairness also factored into our decision, and we reasoned that the dispute’s close connection to France — all of the parties to the contracts at issue were French citizens; the contracts were negotiated, drafted, and executed in France; and performance was to take place in France — rendered us unable to conclude *303that the defendants “should reasonably anticipate being haled into court in South Carolina.” Id. Given France’s centrality to the case, “some fleeting communication by telephone and fax” between the plaintiff and defendants while the plaintiff was in South Carolina was “insufficient, standing alone, to establish jurisdiction.” Id.; see also J. McIntyre Mach., Ltd. v. Nicastro, — U.S.-, 131 S.Ct. 2780, 2785, 2790, 180 L.Ed.2d 765 (2011) (plurality) (concluding that court lacked personal jurisdiction over British corporate defendant that “had no office in [the forum state]; ... neither paid taxes nor owned property there; ... neither advertised in, nor sent any employees to, the State” and had never “in any relevant sense targeted the State”).

Second, with purposeful availment established, we require that the plaintiffs claims arise out of activities directed at the forum state. The analysis here is generally not complicated. Where activity in the forum state is “the genesis of [the] dispute,” this prong is easily satisfied. See CFA Inst., 551 F.3d at 295. A plaintiffs claims similarly arise out of activities directed at the forum state if substantial correspondence and collaboration between the parties, one of which is based in the forum state, forms an important part of the claim. See id. at 295-96.

Third, exercise of personal jurisdiction must be constitutionally reasonable. This prong of the analysis “ensures that litigation is not ‘so gravely difficult and inconvenient’ as to place the defendant at a ‘severe disadvantage in comparison to his opponent.’ ” Id. at 296 (quoting Nolan, 259 F.3d at 217). The burden on the defendant, interests of the forum state, and the plaintiffs interest in obtaining relief guide our inquiry. Id. A corporate defendant’s domicile abroad, standing alone, does not render domestic exercise of jurisdiction unduly burdensome. Id. In CFA Institute, we acknowledged that the defendant’s location in India “may present unique challenges” but nevertheless determined that its ability to secure counsel in the forum state and its choice to do business with a forum resident — which also made the prospect of litigation in the state foreseeable— counseled that defending the suit would not be particularly burdensome. Id. Virginia moreover maintained a “substantial interest” in resolving the grievances of its businesses, particularly when Virginia law informed some of the claims. Id. at 296-97. Finally, the plaintiff had a substantial interest in protecting its intellectual property after having “carved out a market niche by cultivating” its distinctive mark and products. Id. at 297.

B.

Though domiciled abroad, both A1 Dobowi and Linglong have sufficient contacts with Virginia such that the district court’s assertion of personal jurisdiction over them complied with the Fourteenth Amendment’s mandate. We examine each defendant’s contacts in turn.

1.

By hatching the conspiracy to unlawfully copy Alpha’s tires while in Virginia and substantially corresponding with an employee based in Virginia, A1 Dobowi purposefully availed itself of the privilege of conducting activities in the forum state. Indeed, Al Dobowi’s contacts with Virginia are similar to those deemed sufficient to establish personal jurisdiction in CFA Institute. Kandhari, as the chairman of A1 Dobowi,7 met with Vance in Virginia. The *304conspiracy to copy Alpha’s blueprints and sell infringing tires was entered into at this same meeting in Virginia. As was the case with the defendant’s visits to the forum state in CFA Institute, which sparked a contractual relationship between the defendant and plaintiff, 551 F.3d at 295, Al Dobowi and Vance’s relationship originated in Virginia. And like the defendant in CFA Institute, Al Dobowi “repeatedly reached into Virginia to transact business ..., invoking the benefits and protections of Virginia law,” id. Al Dobowi employed Vance, a resident of Virginia who maintained an office in Virginia and wielded significant authority within the company. It substantially corresponded with Vance while he was in Virginia, developing a business plan and exchanging thoughts on designs for the Infinity line of tires.

Al Dobowi’s contacts with the forum state are far more extensive than those found lacking in Consulting Engineers and Foster. Whereas the acts giving rise to the disputes in those cases occurred almost exclusively abroad, a substantial nexus exists here between Virginia and Alpha’s claims. Unlike the defendants in Consulting Engineers, Al Dobowi had an office and employee in the forum state, its representatives traveled to the forum state, and a critical part of the activity of which the plaintiffs complain — conspiring to infringe its intellectual property rights — took place in the forum state. And in contrast to the defendants in Foster, Al Dobowi had an office and employee in the forum state, forged an agreement in the forum state, and worked closely with a U.S. citizen. Upon joining the conspiracy and hiring Vance, Al Dobowi thus should have “reasonably anticipate^] being haled into court in [Virginia],” Foster, 278 F.3d at 415.

Alpha’s claims moreover arise out of Al Dobowi’s contacts directed at Virginia. Again, CFA Institute is illustrative. As in that case, Al Dobowi’s visit to Virginia “was the genesis of this dispute,” CFA Inst., 551 F.3d at 295. And correspondence between Vance, a Virginia resident working in Virginia, and Al Dobowi forms an important part of Alpha’s claim, another factor central to our analysis in CFA Institute.

Finally, exercise of personal jurisdiction over Al Dobowi is constitutionally reasonable. Al Dobowi, based out of the United Arab Emirates, certainly faced a greater disadvantage litigating in Virginia than do Virginia residents. But this is not dispositive. See id. at 296. Al Dobowi, like the defendant in CFA Institute over whom jurisdiction was deemed *305constitutionally reasonable, was able to secure able counsel and should have foreseen the possibility of being forced to litigate in the forum state. Thus Al Dobowi’s defense of a suit in Virginia is not particularly burdensome. See id. Although the entities that compose Alpha are not Virginia companies, the state has an interest in ensuring that the nation’s copyright and trademark laws are not violated within its borders. And, as was the case in CFA Institute, Virginia has a particular interest in this dispute because some of the claims are based on the state’s law. Alpha, too, has a substantial interest in obtaining relief. Indeed, the jury’s award of damages reveals the significant harm visited on Alpha by Al Dobowi’s unlawful activities. Like ' the plaintiff in CFA Institute, Alpha has “carved out a market niche by cultivating” a distinctive mark and product line and was entitled to use Virginia’s judicial system “to protect and vindicate its intellectual property and other legal rights,” id. at 297.

2.

Although fewer in number, Ling-long’s contacts with Virginia are qualitatively significant and demonstrate that it, too, purposefully availed itself of the privilege of conducting business in the forum state. As with Al Dobowi, we find that CFA Institute controls our jurisdictional inquiry here. To be sure, Linglong lacks some of the contacts found in CFA Institute — it has neither offices nor employees in Virginia, and no representative visited Virginia to forge or further the conspiracy. But those contacts were not deemed dis-positive in that case. Rather, the defendant’s “repeatedly reaching] into Virginia to transact business with [plaintiff], invoking the benefits and protections of Virginia law” constituted the core of our jurisdictional holding. CFA Inst., 551 F.3d at 295.

As was the case in CFA Institute, Ling-long’s reaching into the forum state affords a sufficient basis to conclude that the purposeful-availment prong is satisfied. Linglong engaged in extensive collaboration with Vance while he was working from his Virginia office. Vance and a representative from Linglong exchanged ideas about the tire manufacturing process— and, in particular, how best to alter Alpha’s designs to make it appear less obvious that they had copied Alpha’s blueprints. Vance worked on the drawings from his Virginia office, incorporating Linglong’s ideas and responding to its concerns, and ultimately submitting them to Linglong from Virginia. The district court moreover concluded that Linglong knew through its correspondence with Vance “that acts in furtherance of the conspiracy would occur in Virginia,” J.A. 1247, and we find no reason to disturb this factual finding on clear-error review. Given its substantively weighty communications with Vance while he was operating out of his Virginia office — covering details of the manufacturing process that forms the gravamen of this dispute — Linglong should have “reasonably anticipated being haled into court in [Virginia],” Foster, 278 F.3d at 415.

The qualitative significance of Linglong’s contacts sets this case apart from Consulting Engineers and Foster. That the activity giving rise to the suit took place abroad bolstered our conclusion in Consulting Engineers that the court lacked personal jurisdiction over the defendants. Here, in contrast, Vance and Linglong’s manipulation of Alpha’s blueprints and development of a production plan — which forms a critical part of Alpha’s claims — took place while Vance was working in Virginia. And unlike Foster, where the defendants had only “fleeting communication” with a resident of the forum state, id., Linglong en*306gaged in substantive deliberations with Vance about the design and manufacturing process. In sum, in contrast to the defendants in Consulting Engineers and Foster, Linglong “repeatedly reached into Virginia to transact business with [Vance], invoking the benefits and protections of Virginia law,” CFA Inst., 551 F.3d at 295.

Having established that Linglong purposefully availed itself of the privilege of conducting activities in the forum state, we have no trouble concluding that Alpha’s claims arise out of Linglong’s activities directed at the state. Linglong’s correspondence with the Virginia-based Vance was substantial and forms a central part of Alpha’s claims, a factor convincing us that this prong of the inquiry is satisfied, see id. at 295-96.

Finally, for the same reasons outlined with respect to Al Dobowi, exercise of jurisdiction over Linglong comports with notions of constitutional reasonableness.

III.

Turning to the merits, Appellants challenge the validity of the jury’s verdict on Alpha’s copyright, trademark, conversion, and conspiracy claims. We review de novo the district court’s rejection of Appellants’ arguments. Sloas v. CSX Transp., Inc., 616 F.3d 380, 392 (4th Cir.2010).

We hold that Alpha has presented an actionable claim under the Copyright Act, and we sustain the jury’s liability verdict on that count. Likewise, we sustain the jury’s liability determination on Alpha’s conversion claim. However, we dismiss Alpha’s trademark and conspiracy claims, finding that each lacks merit.

A.

Appellants first argue that the Copyright Act has no extraterritorial reach. Because the only claims raised by Alpha involve conduct abroad, Appellants maintain that the Copyright Act affords Alpha no remedy. Alternatively, even if the Copyright Act sometimes reaches foreign conduct that flows from a domestic violation, Appellants urge us to consider that foreign conduct only where, unlike here, the domestic violation is not barred by the Copyright Act’s three-year statute of limitations.

We hold that Alpha has presented a cognizable claim under the Copyright Act and therefore uphold the jury’s finding of liability on that count. We adopt the predicate-act doctrine, which posits that a plaintiff may collect damages from foreign violations of the Copyright Act so long as the foreign conduct stems from a domestic infringement. No court applying the doctrine has ascribed significance to the timeliness of domestic claims, and we decline to endorse Appellants’ proposal that we limit its application to cases where a domestic violation is not time barred.

1.

As a general matter, the Copyright Act is considered to have no extraterritorial reach. E.g., Nintendo of Am., Inc. v. Aeropower Co., 34 F.3d 246, 249 n. 5 (4th Cir.1994). But courts have recognized a fundamental exception: “when the type of infringement permits further reproduction abroad,” a plaintiff may collect damages flowing from the foreign conduct. Update Art, Inc. v. Modiin Publ’g, Ltd., 843 F.2d 67, 73 (2d Cir.1988).

This predicate-act doctrine traces its roots to a famous Second Circuit opinion penned by Learned Hand. See Sheldon v. Metro-Goldwyn Pictures Corp., 106 F.2d 45, 52 (2d Cir.1939). The Second Circuit in Sheldon was confronted with an undisputed domestic Copyright Act violation. The defendant had converted the *307plaintiffs motion picture while in the United States and then exhibited the picture abroad. Id. The court was required to decide whether the damages award could include profits made from foreign exhibition of the film. Id. Answering the question in the affirmative, Judge Hand articulated the framework of the predicate-act doctrine:

The Culver Company made the negatives in this country, or had them made here, and shipped them abroad, where the positives were produced and exhibited. The negatives were ‘records’ from which the work could be ‘reproduced,’ and it was a tort to make them in this country. The plaintiffs acquired an equitable interest in them as soon as they were made, which attached to any profits from their exploitation, whether in the form of money remitted to the United States, or of increase in the value of shares of foreign companies held by the defendants.... [A]s soon as any of the profits so realized took the form of property whose situs was in the United States, our law seized upon them and impressed them "with a constructive trust, whatever their form.

Id. Once a plaintiff demonstrates a domestic violation of the Copyright Act, then, it may collect damages from foreign violations that are directly linked to the U.S. infringement.

The Second Circuit has reaffirmed the continuing vitality of the predicate-act doctrine. Update Art, 843 F.2d at 73. In Update Art, the plaintiff owned the rights to distribute and publish a certain graphic art design. Id. at 68. Without authorization from the plaintiff, the defendant published the image in an Israeli newspaper. Id. at 69. The court reasoned that “the applicability of American copyright laws over the Israeli newspapers depends on the occurrence of a predicate act in the United States.” Id. at 73. “If the illegal reproduction of the poster occurred in the United States and then was exported to Israel,” the court continued, “the magistrate properly could include damages accruing from the Israeli newspapers.” Id. But if the predicate act of reproduction occurred outside of the United States, the district court could award no damages from newspaper circulation in Israel. Id.

More recently, the Ninth Circuit embraced the predicate-act doctrine. L.A. News Serv. v. Reuters Television Int’l, Ltd., 149 F.3d 987, 990-92 (9th Cir.1998). The court endorsed Second Circuit precedent, which it construed as holding that “[rjecovery of damages arising from overseas infringing uses was allowed because the predicate act of infringement occurring within the United States enabled further reproduction abroad.” Id. at 992. To invoke the predicate-act doctrine, according to the Ninth Circuit, damages must flow from “extraterritorial exploitation of an infringing act that occurred in the United States.” Id. The court distinguished a previous decision, Subafilm s, Ltd. v. MGM-Pathe Commc’ns Co., 24 F.3d 1088 (9th Cir.1994), as controlling only a narrow class of cases dealing with the Copyright Act’s “authorization” provision, in which a plaintiff alleges merely a domestic authorization of infringing conduct that otherwise takes place wholly abroad. L.A. News, 149 F.3d at 991-92. Such a case presents concerns not relevant to disputes in which a predicate act of infringement — going beyond mere authorization — occurred in the United States. Id. at 992. The Ninth Circuit further noted that the predicate-act doctrine does not abrogate a defendant’s right to be free from stale claims. Id.

At least two other circuits have recognized the validity of the predicate-act doctrine, even if they have not had occasion to squarely apply it to the facts before them. *308Litecubes, LLC v. N. Light Prods., Inc., 523 F.3d 1353, 1371 (Fed.Cir.2008) (endorsing principle that “courts have generally held that the Copyright Act only does not reach activities ‘that take place entirely abroad’ ” (quoting Subafilms, 24 F.3d at 1098)); Liberty Toy Co. v. Fred Silber Co., 149 F.3d 1183, 1998 WL 385469, at *3 (6th Cir.1998) (unpublished table decision) (“[I]f all the copying or infringement occurred outside the United States, the Copyright Act would not apply. However, as long as some act of infringement occurred in the United States, the Copyright Act applies.” (citations omitted)).

We join our sister circuits that have adopted the predicate-act doctrine. The doctrine strikes an appropriate balance between competing concerns, protecting aggrieved plaintiffs from savvy defendants while also safeguarding a defendant’s freedom from stale claims. Absent the predicate-act doctrine, a defendant could convert a plaintiffs intellectual property in the United States, wait for the Copyright Act’s three-year statute of limitations to expire, and then reproduce the property abroad with impunity. Such a result would jeopardize intellectual property rights and subvert Congress’s goals as engrafted on to the Copyright Act. But lest the doctrine lead to a windfall for plaintiffs and force a defendant to f