Spin Master Ltd. v. Aganv

Background

Spin Master Ltd. and Spin Master Toys UK Limited applied without advance notice for emergency relief against Aganv and numerous named online stores and companies. The application concerned alleged counterfeit products bearing or using marks associated with Rubik’s Cube products. The opinion defines the relevant “Master Defendants,” online marketplace accounts and storefronts, financial accounts, financial institutions, and third-party service providers.

The court reviewed the application, declarations from Sachin Kanabar and Gabriela N. Nastasi, exhibits, and other supporting evidence. It found that the defendants had offered for sale or sold substandard counterfeit products in the United States that infringed the Rubik’s Cube marks. The court further found that consumers and the plaintiffs were likely to suffer immediate and irreparable harm, including consumer confusion, disappointment, injury to reputation and goodwill, and lost sales. It also found a risk that notice would lead the defendants to conceal or dispose of counterfeit products, records, and proceeds, or to open new accounts under different names.

Court’s Findings

The court found that the plaintiffs were likely to prevail on their claims under the federal trademark statute, known as the Lanham Act. It determined that the potential harm to the plaintiffs and the public outweighed the harm to the defendants from being prevented from continuing the alleged infringing activities. The court also found that the public interest favored temporary relief to protect consumers from being misled about counterfeit products.

The court concluded that electronic alternative service was justified under Federal Rule of Civil Procedure 4(f)(3). Although the defendants were believed to be in China, the court found that the urgency of the alleged ongoing infringement and the anticipated delay in service through China’s designated authority supported electronic service. The court also found that electronic service was reasonably calculated to provide notice.

Orders

The court granted the plaintiffs’ application. The temporary restraining order barred the defendants, in the United States except where the order specified worldwide application, from manufacturing, importing, exporting, advertising, marketing, distributing, displaying, offering for sale, selling, or otherwise dealing in counterfeit products or products bearing the Rubik’s Cube marks or confusingly similar marks. It also barred infringement, unauthorized use of the marks, false designations or descriptions, and conduct likely to confuse the public about affiliation, origin, sponsorship, or approval.

The order separately prohibited the defendants and persons acting with them who received actual notice from concealing, transferring, disposing of, withdrawing, encumbering, or paying the defendants’ assets from or to their financial accounts. Within five days after service, the financial institutions were ordered to locate and attach the defendants’ financial accounts and confirm that action to the plaintiffs’ counsel. Within five days after service, third-party service providers were ordered to identify the defendants’ user accounts and merchant storefronts. The order also required certain storefront restrictions and prohibited assistance that would allow continued operation in violation of the order.

The defendants were ordered to show cause at a hearing on August 22, 2024, why a preliminary injunction should not issue. The court authorized service of the order, summons, complaint, and supporting materials by electronic means, including specified email addresses for the defendants and certain service providers and financial institutions. It authorized expedited discovery, including interrogatories and document requests to the defendants, and required financial institutions and third-party service providers to produce specified account, contact, transaction, storefront, sales, and business records within the stated deadlines.

The plaintiffs were required to post a $10,000 security bond to cover damages that might be recoverable from an improper or wrongful restraint. The complaint, its exhibits, the ex parte application, the supporting declarations and exhibits, and the order were to remain sealed until August 19, 2024, subject to any timely request to extend the sealing period. The order was signed by Judge Gregory H. Woods on August 9, 2024.