King Spider LLC v. 884886 CH Store

Background

King Spider LLC, the manufacturer of apparel and other goods called “Sp5der,” moved for permission to file a Fourth Amended Complaint. The proposed pleading sought to reinstate a contributory trademark infringement claim against Alibaba.com Singapore after the court had dismissed that claim in an earlier round of this case.

The proposed claim was based mainly on King Spider’s discovery that Guangzhou Luosi International Trading Co., Ltd., one of the Merchant Defendants, was allegedly offering counterfeit products for sale on July 25, 2024. King Spider alleged that Alibaba.com Singapore had specific knowledge of Guangzhou Luosi’s earlier listings because Guangzhou Luosi had been identified in documents and orders in this case and in another case. King Spider further alleged that the new listing was Guangzhou Luosi’s fourth violation of the Alibaba Defendants’ three-strike policy.

Legal Standard

Although King Spider called its request a motion to amend under Rule 15(a)(2), the court explained that a pleading adding claims based on events occurring after the complaint is filed is more properly treated as a supplemental pleading under Rule 15(d). Because the proposed claim concerned the same defendant and related events, the court applied the same general analysis under both provisions.

A court generally should allow amendment or supplementation absent undue delay, bad faith, delaying tactics, undue prejudice, or futility. Futility means that the proposed claim could not survive a motion to dismiss under Rule 12(b)(6), which tests whether the complaint states enough factual content to make relief legally plausible. At this stage, the court considers the face of the proposed complaint and related pleading materials, accepts the allegations as true, and does not resolve factual disputes.

For contributory trademark infringement, a service provider may be liable if it intentionally induces infringement or continues supplying its service to someone it knows or has reason to know is infringing. The plaintiff must allege more than general knowledge of infringement and must allege sufficient control over the infringing activity to support liability.

Court’s Analysis

The court found that King Spider’s proposed claim was plausible and that supplementation would not be futile. The court acknowledged that the allegations were thinner than those in another case, but concluded that the allegations about Alibaba.com Singapore’s specific knowledge of Guangzhou Luosi’s repeated listings, combined with its alleged continued provision of services, moved the claim from merely conceivable to plausible.

The Alibaba Defendants also argued that the proposed claim was too broad under the Supreme Court’s decision concerning the Lanham Act’s territorial reach. The court held that this argument might limit the relief King Spider could obtain, but did not show that the entire proposed claim failed to state a claim. The court therefore found no basis to deny the motion on that ground.

Disposition

The court GRANTED King Spider’s motion to file a Fourth Amended Complaint. King Spider was ordered to file a clean version within two days, and the Clerk of Court was directed to terminate the motion, identified as ECF No. 131.