dmarcian, Inc. v. DMARC Advisor BV — Fourth Circuit Upholds Cross-Border IP Injunction Under Abitron’s Conduct Test

Background

dmarcian, Inc. (dInc), a North Carolina company, created and marketed software implementing DMARC—an email authentication protocol that helps organizations detect and block fraudulent email. dInc licensed European operations to dmarcian Europe BV, a Dutch company that has since rebranded as DMARC Advisor BV (dBV). When the business relationship broke down, dBV—in the Fourth Circuit’s words—allegedly “stole [dInc’s] brand name, software code, and customers.” dInc sued in North Carolina federal court, asserting copyright, trademark, trade secret, and other claims.

In 2023, the Fourth Circuit upheld a preliminary injunction against dBV on effects-based grounds: dBV’s conduct, even if it occurred primarily in the Netherlands, had significant effects in the United States—including targeted marketing to U.S. customers and recruiting at least one U.S. company (Clarizen) to switch platforms. That same year, the Supreme Court intervened with Abitron Austria GmbH v. Hetronic International, Inc., 600 U.S. 412 (2023), which changed the analysis for the territorial reach of U.S. trademark law. Abitron rejected the prior “effects” approach and substituted a conduct-focused test: U.S. IP law reaches only conduct occurring in the United States.

Back in the district court, dInc’s copyright claim was dismissed on unrelated grounds. The district court then issued a revised “second amended preliminary injunction” intended to conform to Abitron‘s new conduct test. dBV appealed again, arguing that under Abitron, its Netherlands-based conduct is beyond the reach of U.S. law and the injunction must fall.

The Court’s Holding

The Fourth Circuit affirmed the injunction and dismissed the rest of dBV’s appeal. Writing for the panel, Judge Wilkinson held that even under Abitron‘s conduct-focused standard, dBV engaged in substantial conduct within the United States sufficient to bring it within the reach of the Lanham Act and the Defend Trade Secrets Act (DTSA). The court identified several categories of U.S.-directed conduct by dBV: it created a website displaying dInc’s name, logo, and employee likenesses; it placed a geotargeted “Americas” button on the website directing it to U.S. customers; it actively solicited U.S. customers through direct messaging; and it successfully convinced at least one U.S. enterprise, Clarizen, to abandon dInc’s platform for dBV’s competing product.

The court declined to read Abitron as permitting foreign actors to exploit U.S. brands and trade secrets through internet-enabled, purposely U.S.-directed commercial activity simply by keeping their physical operations offshore. “In the modern world,” Judge Wilkinson wrote, “intellectual property theft often cannot be confined to a single sovereign. An actor in the Netherlands may traffic in American trademarks and trade secrets as if there were no national borders or ocean between them.” The second amended preliminary injunction, which bars dBV from serving U.S.-based customers, using dInc’s trademark for U.S.-accessible content, and making further changes to the trade secret source code, was upheld as properly tailored to dBV’s U.S.-directed conduct under the new Abitron framework.

Key Takeaways

• Abitron changed the analytical focus from effects to conduct, but it did not create a safe harbor for foreign companies that actively market to, solicit, and divert U.S. customers via the internet. U.S.-directed online activity counts as conduct in the United States.
• A foreign party’s deliberate targeting of U.S. customers—through geotargeted website features, direct messages to U.S. companies, and actual client conversions in the U.S.—satisfies the conduct-based nexus required under the post-Abitron framework for both Lanham Act trademark and DTSA trade secret claims.
• The case is the latest chapter in a long-running, multi-appeal dispute; the injunction remains in effect through the merits phase. Parties in cross-border IP disputes should expect U.S. courts to look carefully at whether digital conduct—websites, emails, targeted buttons, customer-facing portals—was directed at the U.S. market.
• The Fourth Circuit dismissed the remainder of dBV’s appeal (i.e., non-injunction issues), limiting this published opinion to the injunction analysis.

Why It Matters

The Abitron decision created significant uncertainty in cross-border IP disputes about how much U.S.-directed activity a foreign company must have before U.S. IP law applies. This case provides an early, concrete application by a circuit court: a foreign defendant cannot use internet-mediated, deliberately U.S.-targeted commercial activity as a jurisdictional escape hatch simply because its servers or offices are overseas. The decision is particularly timely for SaaS companies, open-source projects, and digital-services providers operating internationally, where product delivery, customer acquisition, and even the infringement itself often occur simultaneously across jurisdictions.

The holding also signals that the Fourth Circuit will interpret Abitron‘s conduct test functionally rather than formalistically—asking whether the defendant’s commercial activity, wherever physically hosted, was aimed at and executed in the U.S. market. Practitioners advising international technology companies on brand and trade-secret protection should note that geotargeting, direct customer solicitation, and client-conversion activity in the United States can anchor U.S. trademark and DTSA claims even when the defendant’s operations are entirely offshore.