Hyper Ice, Inc. v. E Hung Tat International Group Co., Limited

Background

Hyper Ice, Inc. and Hyperice IP Subco, LLC sought emergency relief against E Hung Tat International Group Co., Limited, doing business as JQX-US, and Jinyun Lige Technology Co., Ltd., doing business as Jinyunligekeji. Hyperice IP Subco owns two patents: U.S. Patent No. 11,857,482, concerning a massage device with variable stroke length, and U.S. Patent No. 12,213,933, concerning a massage device with a releasable connection for a massaging head. Hyper Ice, Inc. is the patents’ exclusive licensee with authority to enforce and defend them.

The plaintiffs alleged that the defendants were manufacturing, importing, advertising, offering for sale, and selling products that infringed the patents through online accounts and Amazon storefronts. The court found that the defendants were not authorized distributors or licensees and that the plaintiffs were likely to prevail on their Patent Act claim at trial.

Court’s findings

The court found that the plaintiffs and consumers were likely to suffer immediate and irreparable harm before the defendants could respond. The court cited alleged sales of substandard infringing products, possible consumer confusion and damage to the plaintiffs’ reputation and goodwill, potential lost sales, and the risk that the defendants could conceal products, records, or proceeds if given advance notice. The court also found that the balance of potential harms and the public interest favored temporary restrictions.

Alternative service

Federal Rule of Civil Procedure 4(f) governs service on defendants in foreign countries. The court found that the plaintiffs had shown that E Hung Tat’s address was not known because the China address listed on its Amazon storefront appeared false or outdated and the entity was associated with a Hong Kong address. The court therefore granted alternative service as to E Hung Tat.

The court found that the plaintiffs had not shown that Jinyun Lige’s listed China address was false or outdated. Because that address was treated as known, the Hague Convention applied. The court nevertheless concluded that the plaintiffs had shown the urgency required for alternative service of temporary and preliminary-injunction materials, based on the risk of irreparable harm and prior unsuccessful efforts to serve similar defendants. The court granted alternative service as to Jinyun Lige as well.

The authorized methods included Federal Express, email, a secure website, and website publication. The court stated that these methods were reasonably calculated to provide notice. The order also authorized service of the order on Amazon, PayPal, Payoneer, and PingPong through specified delivery or email methods.

Orders issued

The court granted the plaintiffs’ application and issued a temporary restraining order lasting 14 days from the order’s date, subject to any further order. The order restrained the defendants and covered persons from, among other things:

- making, using, importing, offering for sale, or selling products that infringe the Hyperice patents; - operating the identified user accounts and merchant storefronts in violation of the order; - concealing, destroying, transferring, or disposing of infringing products, records, or evidence; and - creating new entities, websites, accounts, or storefronts to evade the restrictions.

The court also restrained covered persons from transferring, withdrawing, or disposing of the defendants’ assets from their financial accounts. Financial institutions were ordered to locate and attach the defendants’ financial accounts within five days after receiving the order and to provide confirmation to the plaintiffs’ counsel.

The defendants were ordered to show cause at a telephonic hearing why a preliminary injunction should not issue. The order stated that failure to appear could result in a preliminary injunction that might take effect after the temporary restraining order expired. The court did not itself enter that preliminary injunction in this order.

Expedited discovery

The court authorized expedited discovery, meaning discovery before the usual schedule because of the circumstances described in the order. The defendants were ordered to provide sworn information about their identities, addresses, websites, online accounts, sales, revenues, financial accounts, and compliance with the temporary restraining order. The plaintiffs could also serve interrogatories and document requests, with responses generally required within 14 days.

Financial institutions and third-party service providers were ordered to identify the defendants’ accounts and storefronts and provide related records, including account information, balances, identifying information, transaction records, sales history, and information about the alleged infringing products.

Bond and sealing

The plaintiffs were required to deposit a $5,000 security bond to cover damages that someone might be entitled to recover from an improper or wrongful restraint. The complaint, supporting exhibits, ex parte application, declarations, exhibits, and the order were to remain sealed until the financial institutions and third-party service providers complied with specified portions of the order.

Disposition

The court granted the plaintiffs’ application, including the temporary restraining order, asset restraints, order to show cause, alternative-service authorization, expedited discovery, bond requirement, and sealing order. The order addressed preliminary relief and did not constitute a final determination after a full trial on patent infringement.