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Washington state creates new law making the unauthorized use of software and hardware by product manufacturers an act of unfair competition and requiring product sellers to police their supply chain to avoid imposition of remedies

21 June 2011

IP Alert

On June 22, 2011, a new law will go into effect in Washington state that makes it an act of unfair competition for product manufacturers to use "stolen or misappropriated IT" in their business operations. As many product manufacturers are outside the jurisdiction of Washington state, the law also provides plaintiffs with a cause of action for damages from third parties that sell such products in Washington state and who have $50 million or more in annual sales and a direct contract with the manufacturer (Product Sellers). In addition, the law provides for an in rem action against certain of the offending products. The good news is that the law does provide several safe harbors for Product Sellers if they are able to satisfy one of the enumerated statutory affirmative defenses.



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