NOT PRECEDENTIAL UNITED STATES COURT OF APPEAL FOR THE THIRD CIRCUIT Nos. 02-4385 v. Jim Chang

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEAL
FOR THE THIRD CIRCUIT
Nos. 02-4385 and 03-1043
SCANVEC AMIABLE LIMITED;
SCANVEC AMIABLE INC.
v.
JIM CHANG; YUAN CHANG,
also known as CHARLIE CHANG;
RANDY R. NEPOMUCENO; LUCIANA CHANG;
AMICA SOFTWARE, INC., also known as
AM IABLE SOFTW ARE, INC.;
AMICA CHINA, INC.; AMICA CHINA CO., LTD.
Amica Software, Inc.,
Jim Chang and Luciana Chang,
Appellants
(Amended in accordance with Court’s Order dated 4/10/03)
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 02-cv-06950)
District Judge: Hon. Petrese B. Tucker
Argued: September 16, 2003
BEFORE: MCKEE, SMITH and COWEN, Circuit Judges
(Filed: October 15, 2003)

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Francis P. Newell, Esq.
Leonard A. Busby, Esq. (Argued)
Montgomery, McCracken, Walker & Rhoads
123 South Broad Street
Philadelphia, PA 19109
Counsel for Appellants
Michael W. McTigue, Jr., Esq. (Argued)
Drinker, Biddle & Reath
18th & Cherry Streets
One Logan Square
Philadelphia, PA 19103
Counsel for Appellees
OPINION
COWEN, Circuit Judge.
Amica Software, Inc., Jim Chang and Luciana Chang (together “Amica”) appeal
two orders of the District Court concerning a temporary restraining order and a
preliminary injunction entered in favor of appellees Scanvec Amiable Limited and
Scanvec Amiable, Inc. (together “Scanvec”). Amica argues that the Court erred by
declining to impose retroactive security for the TRO after the order was dissolved by the
entry of the preliminary injunction. In a separate appeal, Amica challenges the District
Court’s decision to expand the preliminary injunction without conducting an evidentiary
hearing, or increasing the amount of the security bond. As part of this second appeal,
Amica also argues that the District Court’s findings concerning civil conspiracy,

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misappropriation of trade secrets, and unfair competition are erroneous, and that the
District Court exceeded its jurisdiction under the Lanham Act. We find no abuse in the
District Court’s discretionary determinations, and no reversible errors of law in either
order. Accordingly, we will affirm .
I.
This case arises from the establishment of a computer software company by former
officers, directors, and employees of Scanvec. Scanvec develops computer programs sold
throughout the world. Scanvec’s premier product is PhotoPRINT, a program that creates
computer images for printing on wide format digital printers (“WFPs”). Approximately
one-third of Scanvec’s PhotoPRINT sales are made to original equipment manufacturers
(“OEMs”) of WFPs, including Hewlett-Packard and Roland DG Corporation. Scanvec
designed private-label versions of PhotoPRINT for these OEMs by, in part, customizing
the International Color Consortium Color Profiles (“ICC Profiles”) needed to produce
accurate digital reproductions on WFPs.
PhotoPRINT was originally designed and sold by Amiable Technologies, a
company owned by Defendants Jim Chang and Yuan Chang. In 1998, Amiable merged
into Scanvec, and Jim and Yuan became shareholders in, and board members of, the new
company. The Changs’ employment agreements prohibited both from competing with
Scanvec for two years after their departure. In July 1999, Jim Chang was fired from his

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position as President of Scanvec. In November 2001, Jim and Yuan resigned from
Scanvec’s board.
In May 2001, prior to their resignation, the Changs launched a new software
company in China called Amica. Yuan Chang was listed as Amica’s legal representative,
and Amica used Scanvec’s Beijing office as its company address. In the fall of 2001, Jim
Chang’s wife Luciana brokered an agreement that terminated all of Scanvec’s Chinese
distributors in favor of an exclusive contract with a company called SunPack. SunPack,
however, shared the same office space as Amica (which, as noted, was also Scanvec’s
space). In November 2001, SunPack changed its name to Jia Peng Si Hai, which was
essentially Amica’s Chinese trade name. Scanvec’s representative to SunPack, Kevin
Sun, clandestinely worked for Amica through the end of 2001.
In early 2002, Amica hired several of Scanvec’s former software engineers and
began marketing ColorPRINT, a program (like PhotoPRINT) for printing images on
WFPs. Early versions of ColorPRINT, and a similar product called ImaRIP, incorporated
hundreds of Scanvec’s ICC Profiles.
Finally, Jim Chang entered into a contract with Roland DG to produce a private-
label version of ColorPRINT (called Roland Select Color, or “RSC”) for Roland’s new
line of WFPs. One of Roland’s requirements for RSC was the creation of a customized
rendering intent similar to the one used by Scanvec in PhotoPRINT known as
“SpotColor.” Pursuant to this agreement, ColorPRINT’s source code included references

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to SpotColor, although, as discussed further below, the functionality of the rendering
intent remains unclear.
Scanvec commenced this action on August 27, 2002 by filing a complaint and an
ex parte motion for a temporary restraining order. On the same day Judge Berle M.
Schiller, sitting as emergency judge, entered the requested TRO without requiring the
posting of a security bond, or making any findings as to why a bond was unnecessary.
The case was then assigned to Judge Petrese B. Tucker, who conducted a six-day hearing
on the requested preliminary injunction between September 6 and September 13. Amica
did not object to the continuation of the TRO during the hearing, and pending a ruling on
the preliminary injunction.
On October 3, 2002, the District Court granted Scanvec’s application for a
preliminary injunction in part, enjoining Amica from using certain trademarks, trade
secrets, and goodwill. The District Court solicited the parties’ recommendations on the
amount of security, and following their response, set a bond requirement of $390,000 on
November 4, 2002. The District Court also determined that no security requirement
would be imposed for the period during which the TRO was in place.
On October 18, 2002, Scanvec filed an emergency motion for reconsideration of
the October 3 order citing newly discovered evidence demonstrating that the Amica
defendants had made material misrepresentations during the injunction hearing. On
November 12, 2002, following opening and opposition briefs, Scanvec filed a motion for

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1 Appeal number 02-4385.
6
leave to file a reply brief, attaching the proposed brief to the new motion. On November
15, Scanvec sought leave to file an additional supplement. On December 17, 2002, the
District Court granted Scanvec leave to file the supplemental materials, and directed that
Amica file any opposing materials by December 19. Amica timely filed its response, but
argued that it did not have sufficient time to address all of the allegations raised in
Scanvec’s supplements.
On December 23, 2002, the District Court granted Scanvec’s motion for
reconsideration and expanded the preliminary injunction to prevent Amica from selling
ColorPRINT, and its derivative products. The District Court’s order stated that the
security of $350,000 previously posted by Scanvec was sufficient to support the expanded
injunction.
Amica filed a motion to stay the expanded injunction on December 30, which the
District Court denied on January 6, 2003. On January 10, 2003, Amica filed a motion to
stay pending appeal with this Court, which this Court denied on January 27, 2003.
II.
Amica first appeals1 the District Court’s Novem ber 4, 2002 order declining to
impose a security bond for the TRO period between August 27 and October 3. We agree
that the District Court’s failure to justify the waiver of a security bond is erroneous, but
conclude that we cannot retroactively increase the amount of security imposed during the

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2 Amica argues we may exercise jurisdiction over the November 4 order under the
collateral order doctrine. We need not consider this argument, because jurisdiction is also
proper under 28 U.S.C. § 1292(a)(1), which governs interlocutory orders “granting,
continuing, modifying, refusing, or dissolving injunctions . . . .” The November 4 order
modified the October 3 order by imposing a security requirement of $390,000 not
previously required. Compare App. at 1544-1549 (October 3 order), with App. at 33-39
(November 4 order); see Sprint Communications Co. v. Cat Communications Int’l, 335
F.3d 235, 239 n.3 (3d Cir. 2003).
7
period of the now-expired TRO. Accordingly, the District Court’s November 4 order will
be affirmed.2
Federal Rule of Civil Procedure 65(c) states that “[n]o restraining order or
preliminary injunction shall issue except upon the giving of security by the applicant, in
such sum as the court deems proper.” We have strictly interpreted the bond requirement
of Rule 65(c), noting that “[w]hile there are exceptions, the instances in which a bond
may not be required are so rare that the requirement is almost mandatory.” Frank’s GMC
Truck Center, Inc. v. Gen. Motors Corp., 847 F.2d 100, 110 (3d Cir. 1988). In some
instances, strict application of the security requirement may be inappropriate, and “at least
in noncom mercial cases, the court should consider the possible loss to the enjoined party
together with the hardship that a bond requirement would impose on the applicant.”
Temple Univ. v. White, 941 F.2d 201, 219 (3d Cir. 1991) (quoting Crowley v. Local No.
82 Furniture & Piano, 679 F.2d 978, 1000 (1st Cir. 1982)). This exception, however,
remains narrow and may only be invoked by the District Court upon specific findings
“regarding the relative hardships to each party.” Elliott v. Kiesewetter, 98 F.3d 47, 60 (3d

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Cir. 1996). Waiver of the bond requirement without such findings necessitates a remand
for reconsideration. Id.; Temple, 941 F.2d at 220.
Nonetheless, reversal of the November 4 order and remand for imposition of an
increased security amount is not appropriate. The decisions in both Elliott and
Temple involved appeals from then-existing injunctions. In this case, the August 27 TRO
has expired, and been replaced by a preliminary injunction. Amica concedes this point,
explaining that it seeks to obtain “a retroactive bond in order to satisfy a damages award.”
Blue Br. at 42. However, we have recently held that “[a] retroactive increase in the
amount of an injunction bond on dissolution or reversal is generally improper.” Sprint
Communications Co. v. Cat Communications Int’l, 335 F.3d 235, 241 (3d Cir. 2003).
In Sprint, the district court entered a preliminary injunction secured by a $250,000
bond. Id. at 238. More than one-year later, the restrained party had accrued significant
costs complying with the injunction, and sought to terminate the restraint. Id. at 239. The
district court dissolved the injunction, and simultaneously increased the amount of the
bond to 4.95 million dollars. Id.
We held that the retroactive increase was improper, explaining that the security
requirement of Rule 65(c) informs the applicant “the price it can expect to pay if the
injunction was wrongfully issued.” Id. at 240 (quoting Instant Air Freight Co. v. C.F. Air
Freight, Inc., 882 F.2d 797, 805 (3d Cir. 1989)). In this manner, the applicant may base
its decision to accept the injunction “on whether it wants to expose itself to liability up to

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the bond amount.” Id. In contrast, “[i]f a retroactive increase is permissible, the
injunction bond is no longer cabined; the bond no longer fixes exposure nor caps liability.
A retroactive increase subjects the successful applicant to an unexpected and
unanticipated liability.” Id. at 240-41; accord Mead Johnson & Co. v. Abbott Labs., 209
F.3d 1032 (7th Cir. 2000).
Sprint dictates the same result in this case. Increasing the amount of the security
required for the August 27 TRO, albeit set at zero, after that injunction had been
dissolved by the October 3 order would retroactively increase Scanvec’s potential
liability. Scanvec accepted the injunctive relief ordered by the District Court on the belief
that it was not required to post any security; imposing a retroactive increase now would
“subject[] the successful applicant to an unexpected and unanticipated liability.” Sprint,
335 F.3d at 241.
We note, of course, that unlike Sprint the District Court here failed to require any
security. However, this error persisted because of Amica’s own delay in challenging the
TRO. App. at 34 n.3, 233, 441, 679, 1033 (consenting to continuations of the TRO
without bond). Amica could have withheld its consent to the TRO extensions, filed an
interlocutory appeal after the expiration of twenty days, and argued that the failure to
require security was erroneous. Nutrasweet Co. v. Vit-Mar Enters., Inc., 112 F.3d 689,
692 (3d Cir. 1997) (noting that if a TRO is continued for more than twenty days, “[t]he
most prevalent view” is that the order will be “treated as the equivalent of a preliminary

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3 Appeal number 03-1043.
10
injunction and thus subject to appellate review”); see also Prof’l Plan Examiners of New
Jersey, Inc. v. Lefante, 750 F.2d 282, 288 (3d Cir. 1984). Indeed, Amica could have
simply informed the District Court that the TRO would not take effect without a
determination under Rule 65(c). We have long held that the posting of adequate security
is a “condition precedent” to injunctive relief. Hopkins v. Wallin, 179 F.2d 136, 137 (3d
Cir. 1949); see also Sprint, 335 F.3d at 239 (“Generally, a bond is a condition of
preliminary injunctive relief.” ); Frank’s GMC, 847 F.2d at 103 (noting Rule 65(c)
“mandates” that the successful applicant post adequate security). Amica thus had ample
authority with which to immediately argue to the District Court that the TRO would not
commence until the court determined, and Scanvec posted, adequate security. Amica’s
failure to challenge the security determination, and its decision to accept continued
extensions of the TRO without adequate security, do not justify a departure from Sprint’s
disapproval of retroactive bond increases. Accordingly, the District Court’s decision was
not erroneous.
III.
Amica separately appeals3 the District Court’s December 23, 2002 order granting
Scanvec’s motion to reconsider the October 3 order, and expanding the preliminary
injunction to prohibit all production of ColorPRINT and its derivatives.
A. Failure to Conduct a Hearing on the Motion for Reconsideration

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Amica first argues that the District Court abused its discretion by issuing an
expanded injunction without first conducting an evidentiary hearing on the motion for
reconsideration. W e review this decision only for an abuse of discretion. Elliott, 98 F.3d
at 53. A district court cannot issue a preliminary injunction that depends upon the
resolution of disputed issues of fact without first holding an evidentiary hearing. Elliott,
98 F.3d at 53; Prof’l Plan Examiners, 750 F.2d at 288. In contrast, an injunction may
issue on the basis of affidavits and other docum entary evidence “if the facts are
undisputed and the relevant factual issues are resolved.” Bradley, 910 F.2d at 53-54.
The District Court’s decision to expand the injunction without a second hearing
was not an abuse of discretion. The Court’s decision arose from a motion for
reconsideration, and after a six-day hearing on the merits of Scanvec’s application.
Therefore, the District Court did not issue its order without any hearing, or record
testimony. Rather, the District Court’s opinion indicates that the documentary evidence
offered by Scanvec undermined the credibility of Amica’s witnesses, and supported an
inference of conspiracy.
Amica responds that a hearing would have resolved the inconsistencies in the
witnesses’ testimony. However, as the District Court reasonably noted:
“Amica Defendants’ responses to Plaintiffs . . . do not even attempt to mount a
defense against these serious allegations, contending only that the [new evidence] is
‘irrelevant’ and a ‘peripheral issue’. The only inference that can be drawn from this
evidence is that Plaintiffs are correct . . . .” App. at 28.

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Amica then attempts to argue that the District Court’s briefing schedule allowed
insufficient time to respond to the new evidence. This argument ignores the fact that
Amica had the supplemental materials for some two months prior to the District Court’s
decision to accept the materials as filed. More significantly, Amica has never identified
what it would have demonstrated with more briefing time or a hearing. See Elliott, 98
F.3d at 54-55 (rejecting conclusory challenge to district court’s failure to hold hearing).
The District Court’s six-day hearing was a sufficient evidentiary background on
which to evaluate the supplemental documentary evidence. Further, Amica has not
demonstrated what evidence it would have offered in reply. Accordingly, the District
Court’s decision to enter the expanded December 23 injunction was not an abuse of
discretion.
B. Denial of Request to Increase the Security Bond
Closely related to Amica’s argument in appeal number 02-4385 is the claim that
the District Court abused its discretion by failing to increase Scanvec’s security bond
when it granted the motion for reconsideration, and expanded the scope of the preliminary
injunction. Amica essentially argues that it is an abuse of discretion not to raise the
amount of security when an injunction becomes drastically more restrictive.
Amica’s argument is without merit. The amount of security required for an
injunction under Rule 65(c) is left to the discretion of the district court. Frank’s GMC,
847 F.2d at 103. The December 23 order states that the District Court considered whether

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additional security was required, but declined to increase the bond. App. at 10 (stating
“that security of $390,000 already posted by plaintiffs is sufficient”). Moreover, the
District Court’s November 4, 2002 order calculated the security requirement to include
$240,000 in expenses identified by Amica, and an additional $150,000 in recognition of
“significant additional losses” at risk in the litigation. App. at 39. The District Court’s
written decision that this combined amount was sufficient to support the expanded
injunction is not an abuse of discretion.
C. Basis for the Expanded Preliminary Injunction
The substantive heart of Amica’s appeal argues that the District Court’s findings
concerning civil conspiracy, misappropriation of trade secrets and unfair competition are
erroneous, or an abuse of discretion. Amica essentially argues that taken separately, each
of these three allegations do not sustain the broad injunction entered by the District Court.
1. Civil Conspiracy
Under Pennsylvania law, a civil conspiracy requires an agreement with intent to
participate in an unlawful act. Scully v. US Watts, Inc., 238 F.3d 497, 516 (3d Cir. 2001)
(quoting Thompson Coal Co. v. Pike Coal Co., 412 A.2d 466, 472 (Pa. 1979)). This
showing “may be proved by acts and circumstances sufficient to warrant an inference that
the unlawful combination had been in point of fact formed for the purpose charged.” Id.
(quoting Fife v. Great Atl. & Pac. Tea Co., 52 A.2d 24, 27 (Pa. 1947)).

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Here, the District Court found a likelihood of a civil conspiracy based on Amica’s
role in cancelling Scanvec’s Chinese distribution, Amica’s usurpation of Scanvec’s
Chinese office, Amica’s recruitment and hiring of Scanvec programmers, and SunPack’s
summary termination of its agreement with Scanvec after only two months. The Court
concluded that this chain of events demonstrated that Scanvec was fraudulently induced
into terminating its distribution network so that Amica could fill the void created by
Scanvec’s exit from the market. The District Court found that Amica did “not even
attempt to mount a defense against these serious allegations,” a conclusion supported by
the record. App. at 28. Accordingly, the District Court’s finding of a likelihood of
success on this point is correct.
2. Misappropriation
Amica argues that the District Court erred in relying on evidence of source code
copying in finding a likelihood of success on the merits of Scanvec’s state law
misappropriation claim. Citing the Declaration of a former Scanvec employee, the
District Court found that “[t]he ColorPRINT source code lists “SpotColor” as one of the
software’s rendering intents.” App. at 21. In response to this testimony, the Court found
that “Jim Chang did not explain how Scanvec’s SpotColor rendering intent was
incorporated into the ColorPRINT source code, particularly since the ColorPRINT does
not use the feature.” App. at 21.

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4 Adobe is a third-party software manufacturer that sells some of the most widely-used
software for text and image processing. See www.adobe.com (last visited Aug. 25,
2003).
15
Amica argues that this finding of source code copying is based on an erroneous
understanding of the technology used in RIP software. Amica concedes that ColorPRINT
contained “references” to the term SpotColor. However, Amica argues that these
references were merely placeholders inserted by the programers to indicate where
Amica’s own rendering intent would be constructed. In other words, Amica contends that
the SpotColor references were not code at all, but merely “notes” to indicate where the as-
yet unwritten code would be placed. Jim Chang’s declaration explains that:
Roland specifically requested from Amica a rendering intent in order to print “spot
colors” correctly. Amica included reference to a fifth rendering intent of
“SpotColor” in preparation for adding this feature at a later date, when it was
intended that ColorPRINT would be adapted to process images in Adobe’s
Postscript format4. . . . Because the ColorPRINT version analyzed by [Scanvec]
was not ready to process Adobe Postscript, no fifth rendering intent was ever used
in the ColorPRINT beta version created at that time.
App. at 1691. This, Amica argues, entirely explains why “non-functioning code” was
included in ColorPRINT: because it wasn’t code at all, merely a reference to a feature that
would be added at a later time.
The District Court’s analysis of this issue is problematic. Under Pennsylvania law,
the tort of misappropriation of trade secrets requires the disclosure or use of a trade secret.
Advanced Power Sys. v. Hi-Tech Sys., 801 F. Supp. 1450, 1454 (E.D. Pa. 1992) (citing
Den-Tal-Ez, Inc. v. Siemens Capital Corp., 566 A.2d 1214, 1228-29 (Pa. Super. Ct.

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1989)). The District Court did not determine whether the instances of SpotColor
contained in ColorPRINT were source code, or simply references to a group of source
files containing the source code for a rendering intent.
The District Court’s findings also lack sufficient factual support for an inference
that Amica copied Scanvec’s code. Federal cases addressing code copying allegations
under the Copyright Act hold that copying may be established by indirect evidence that
the defendant had access to the protected materials, and that the two programs
demonstrate “substantial similarities.” Whelan Assocs. v. Jaslow Dental Lab., Inc., 797
F.2d 1222, 1231-32 (3d Cir. 1986). The court may receive expert and lay testimony to
determine whether a substantial similarity exists. Id. at 1232-33. Here, there is no
evidence in the record that ColorPRINT’s rendering intents were substantially similar to
PhotoPRINT. Rather, the declaration submitted by Scanvec shows only that Amica
incorporated a substantially similar title reference, and not some functional program
element.
In addition, the District Court appears to have assumed that the SpotColor
reference, and perhaps all of Scanvec’s PhotoPRINT source code, was a protected trade
secret. Federal courts applying the Copyright Act have constructed an intricate
framework for determining whether source code is protected. Once the court has found
copying, either express or inferred, it considers whether the copied elements are protected
expressions. Id. at 1234-35; 17 U.S.C. § 102(b). We have explained the distinction

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between protected expressions and unprotected ideas by “reference to the end sought to
be achieved by the work in question,” distinguishing between “the purpose or function of
a utilitarian work” and “everything that is not necessary to that purpose or function.”
Whelan, 797 F.2d at 1236. The District Court did not perform a similarly rigorous
analysis of the elements of PhotoPRINT and the allegedly misappropriated portions of
ColorPRINT. Instead, the Court based its conclusion on credibility, finding that Jim
Changs’s testimony merited “little credence.” App. at 25. This finding, however, does
not explain whether Scanvec’s SpotColor was a protected trade secret, and whether
Amica used or disclosed that secret as required for an actionable claim under
Pennsylvania law. Hi-Tech Sys., 801 F. Supp. at 1444.
Similar problems attain to the District Court’s finding that Amica incorporated
“hundreds of PhotoPRINT ICC color profiles” and that this incorporation could not be
explained away as the result of reverse engineering or mistake. App. at 27. As with the
instances of SpotColor, the District Court did not determine whether Scanvec’s ICC
Profiles were protected as trade secrets, a requirement for misappropriation under
Pennsylvania law. For these reasons, the District Court erred in finding a likelihood of
success on the merits of Scanvec’s misappropriation and copying claims.
3. Unfair Competition
The District Court also entered the preliminary injunction based on a likelihood
that Scanvec would succeed on the merits of its common law unfair competition claim.

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Despite the equal importance of this finding to the District Court’s analysis, Amica has
failed to challenge this finding on appeal. We have “repeatedly emphasized that failure to
raise a theory as an issue on appeal constitutes a waiver,” by ignoring the requirement that
briefs contain “statements of all issues presented for appeal, together with supporting
arguments and citations.” Int’l Raw Materials, Ltd. v. Stauffer Chem. Co., 978 F.2d 1318,
1327 n.11 (3d Cir. 1992). Amica’s statement that it appealed “all aspects” of the District
Court’s order, and the suggestion that its opening brief cited to “the part of the District
Court’s Opinion relating to unfair competition,” falls far short of this standard. Amica’s
briefing does not address the District Court’s findings of unfair competition, and does not
explain how these findings are erroneous under Pennsylvania law. Moreover, Am ica’s
brief does not cite any authorities explaining the standards for unfair competition, and
confines its legal arguments to the issue of misappropriation. Because of these omissions,
it is impossible to determ ine the factual and legal basis for Amica’s purported appeal.
Nonetheless, even if we were to reach the merits of this issue, the District Court’s
conclusions are proper. A claim of unfair competition under Pennsylvania law requires
proof that the defendant has “passed off” the goods of one manufacturer or vendor as
those of another, thus creating confusion between his own goods, and those of the rival.
Penn. State Univ. v. Univ. Orthopedics, Ltd., 706 A.2d 863, 870-71 (Pa. Super. Ct. 1998)
(“The gist of the action lies in the deception practiced in “passing off” the goods of one
for that of another.”); see also Louis Vuitton Malletier & Oakley, Inc. v. Veit, 211 F.

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Supp. 2d 567, 582 (E.D. Pa. 2002) (noting that common law cause of action for unfair
competition in Pennsylvania mirrors the requirements of section 43(a) of the Lanham
Act).
Here, the District Court found that Amica “willfully converted PhotoPRINT ICC
Profiles en masse for use in the various versions of ColorPRINT,” while “falsifying the
copyright information for the profiles to denote” Amica as the copyright holder. App. at
27. The District Court then concluded that Amica sold this misbranded product to
Scanvec’s former customers, resulting in “incalcuable damage to Plaintiffs’ reputation
and goodwill in the RIP software industry.” App. at 29. As Pennsylvania courts have
noted, “the trading on another’s business reputation by use of deceptive selling practices
or other means is enjoinable on the grounds of unfair competition.” Univ. Orthopedics,
706 A.2d at 871 (quoting Morgan’s Home Equip. Corp. v. Martucci, 136 A.2d 838, 848
(Pa. 1957)). The conduct cited by the District Court supports the conclusion that Amica
passed off ColorPRINT as Scanvec’s product, using Scanvec’s distribution network.
Hence, even if we were to address this issue, we would find no error in the District
Court’s analysis.
Accordingly, although the District Court erred in entering the December 23
injunction on the basis of Scanvec’s misappropriation claims, the injunction is soundly
supported by the findings of civil conspiracy and unfair competition. Therefore, the

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conduct enjoined by the District Court was not an abuse of discretion, error of law, or
clear mistake, and will be affirmed.
D. Lanham Act Jurisdiction
Amica argues that the District Court erred in exercising jurisdiction under the
Lanham Act to enjoin Amica’s sales in China. The Lanham Act allows federal courts to
enjoin extraterritorial conduct when necessary to prevent harm to commerce in the United
States. Steele v. Bulova Watch Co., 344 U.S. 280 (1952). A proper invocation of
extraterritorial jurisdiction under the Lanham Act depends on: 1) whether the defendant is
a United States citizen; 2) conflicts between the defendant’s trademark rights under
foreign law and the plaintiff’s rights in the United States; and 3) whether the defendant’s
conduct has a substantial or significant effect on domestic commerce. Atl. Richfield Co.
v. ARCO Globus Int’l Co., 150 F.3d 189, 192 (2d Cir. 1998); Nintendo of Am., Inc. v.
Aeropower Co., 34 F.3d 246, 250-51 (4th Cir. 1994); Am. Rice, Inc. v. Ark. Rice Growers
Co-op. Ass’n, 701 F.2d 408, 414 (5th Cir. 1983) (requiring effect on commerce to be
“more than insignificant”); and see Reebok Int’l, Ltd. v. Marnatech Enters., Inc., 970 F.2d
552, 555 (9th Cir. 1992) (expanding the conflict of laws analysis into a seven-part
inquiry); see also 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair
Competition § 29:58 (West 2003) (collecting cases). Amica has raised only the third of
these factors, arguing that Scanvec provided no evidence that the sale of ColorPRINT in
China sufficiently affected United States commerce for jurisdiction.

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The District Court considered the impact of Amica’s sales and conspiratorial
actions in finding a jurisdictionally sufficient nexus to American commerce. Amica
availed itself of business opportunities inside the Unites States. Amica solicited
customers at U.S. trade shows, suggesting plans for domestic expansion, App. at 28;
565-67. Amica developed essential elements of its ColorPRINT software, including the
disputed ICC Profiles, from Scanvec programs designed in the United States. App. at 27.
Finally, the District Court found that the confusingly similar marks and designations
contained in ColorPRINT damaged Scanvec’s goodwill and reputation within the
domestic RIP software market. App. at 29. In all, the record indicates that Amica
orchestrated its actions in China from the United States, using materials and customers
developed in this country to materially further the launch of a confusingly similar product
overseas. These facts show that Amica’s domestic activities formed an essential step in
carrying out its foreign conspiracy, resulting in the substantial impairment of Scanvec’s
business reputation in the United States. Accordingly, we are satisfied that Scanvec has
satisfied the commercial nexus requirement of Steele.
III.
For the foregoing reasons, the orders of the District Court entered on November 4,
2002 and December 24, 2002, will be affirmed.

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TO THE CLERK:
Please file the foregoing opinion.
/s/Robert E. Cowen
United States Circuit Judge

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