Michel Sales Company v. Ningbo GI Power Co. Ltd.

Background

Michel Sales Company, founded in 1857 and headquartered in Minnesota, owns registered trademarks (DECKO® and BUILT TO LAST®), three registered copyrights covering product catalogs and manuals, and trade dress rights (rights in the distinctive appearance and configuration of a product) in its DECKO® water pump. Ningbo GI Power Import & Export Co. Ltd. is a Chinese company that markets products under the DEKO and DEKOPRO brands. Michel alleges that beginning around 2023, Ningbo copied its advertising materials, product manuals, product descriptions, and product configuration to sell competing pumps on Amazon.com.

Michel filed suit in September 2024 and filed an eight-count Amended Complaint asserting: copyright infringement, trademark infringement, trade dress infringement, deceptive trade practices under the Minnesota Deceptive Trade Practices Act, and unfair competition under Section 43(a) of the Lanham Act (15 U.S.C. § 1125(a)). The four named defendants are Ningbo GI Power Import & Export Co. Ltd., Ningbo GI Power Co. Ltd. (which Ningbo contends is simply a shortened form of the same entity), Deko Group LLC, and Deko Electric LLC (collectively "Deko").

None of the defendants appeared at the November 19, 2024 hearing on Michel's preliminary injunction motion, though Ningbo's second counsel had contacted Michel's counsel the day before, acknowledging awareness of the action. The court granted the unopposed preliminary injunction, which among other things barred defendants from using Michel's intellectual property, from submitting counter-notices or appeals to Michel's Amazon takedown requests, and required defendants to remove infringing materials from public view — including on Amazon and on Ningbo's website www.dekotools.com.

After Michel began enforcing the injunction and moved for default judgment, Ningbo appeared in the action and filed an Answer and Counterclaims. It then moved to dissolve the preliminary injunction. Michel separately moved for contempt and for default judgment against Deko.

Motion to Dissolve the Preliminary Injunction (DENIED)

Service on Deko

Ningbo argued that Deko, as a canceled Delaware LLC, could not be served through a registered agent and therefore was not a proper party to the action. The court rejected this on two independent grounds.

First, the court held that Ningbo lacked standing (the legal right) to challenge service on a co-defendant.

Second, the court examined Delaware law and found that Deko's cancellation appeared to be for failure to pay taxes — not through a voluntary dissolution and filing of a certificate of cancellation. Under Delaware Code tit. 6, § 18-1107(k), a company canceled for failure to pay taxes "remain[s] a domestic limited liability company." Because there was no evidence that Deko had completed a wind-down process or filed a certificate of cancellation, it remained a valid entity and Michel had properly served its registered agent.

Binding Effect on Ningbo Under Rule 65(d)

Federal Rule of Civil Procedure 65(d)(2) provides that a preliminary injunction binds not only named parties but also persons who "receive actual notice of it by personal service or otherwise" and are "in active concert or participation" with a party. The court held that Ningbo satisfied both requirements.

On actual notice: Ningbo's first counsel had been contacted in September 2024 when Michel attempted (unsuccessfully) to serve the initial complaint. Ningbo's second counsel acknowledged actual notice of the action and the preliminary injunction motion the day before the hearing. The court relied on H-D Michigan, LLC v. Hellenic Duty Free Shops S.A., 694 F.3d 827 (7th Cir. 2012), and Whirlpool Corp. v. Shenzhen Sanlida Elec. Tech. Co., Ltd., 80 F.4th 536 (5th Cir. 2023), for the proposition that formal service of process is not required under Rule 65 to bind a party with actual notice, particularly for foreign defendants where Hague Convention service can take months.

On active concert or participation: The court identified the following evidence: (1) Ningbo's first counsel had acknowledged representing Ningbo in filing counter-notices with Amazon for ASINs (Amazon Standard Identification Numbers — unique product identifiers) listed under the seller account "Gulin"; (2) Ningbo and Gulin share a common registered agent in Delaware and nearly the same address; (3) import records show both Deko entities imported pumps from Ningbo; (4) Ningbo owns the DEKO/DEKOPRO trademarks at issue; (5) after Gulin was suspended on Amazon, a new seller called "DEKOPRO" appeared selling the same products, stating affiliation with Deko Electric (US); and (6) an appeal challenging takedowns from www.dekotools.com listed the same address as Ningbo's business address.

The court noted in a footnote that Ningbo may have waived its service objection by not raising it in its Answer, but declined to resolve that issue given its ruling on the merits of the service argument.

Rule 60(b) (Federal Rule of Civil Procedure 60(b))

Rule 60(b) allows a court to grant relief from a judgment or order for specified reasons including mistake, newly discovered evidence, fraud or misconduct by an opposing party, or when prospective application of the order is no longer equitable.

Ningbo invoked grounds (1) mistake/excusable neglect, (3) misrepresentation/misconduct, (5) no longer equitable, and (6) catch-all, but only developed arguments on grounds (3) and (5). The court declined to consider the undeveloped grounds.

On ground (3) — misrepresentation: Ningbo argued Michel misrepresented its connection to Deko. The court rejected this based on its earlier finding that the record supports Ningbo acting in concert with Deko.

On ground (5) — no longer equitable: Ningbo reiterated its procedural objections (already rejected) and challenged the Dataphase factors (the Eighth Circuit's four-part test for preliminary injunctions: likelihood of success on the merits, irreparable harm, balance of harms, and public interest). The court rejected this because Ningbo relied entirely on law and evidence that existed before the preliminary injunction hearing — evidence Ningbo could have presented at the hearing had it chosen to appear. Rule 60(b) "is not a vehicle for simple re-argument on the merits," and courts deny such requests when the party relies on events that were anticipated at the time the order was entered.

Motion for Contempt (GRANTED)

To establish civil contempt, the moving party must prove by clear and convincing evidence: (1) the existence of a valid court order; (2) the alleged contemnor had knowledge of that order; and (3) the alleged contemnor disobeyed it. If those elements are established, the burden shifts to the alleged contemnor to show: (1) it was unable to comply; (2) the inability was not self-induced; and (3) it made good-faith efforts to comply.

The court found all three of Michel's elements satisfied:

- Valid order: The preliminary injunction was valid for the reasons stated in the dissolution analysis. - Knowledge: Ningbo and Deko had actual knowledge of the injunction for the reasons already discussed. - Disobedience: The court found two specific violations. First, after the injunction prohibited filing counter-notices or appeals to Michel's Amazon takedowns, Ningbo continued to do so — one example being that ASIN B09ZV2GB71 was removed by Amazon after Michel's December 11 report, but Defendants successfully appealed and had it reinstated. Second, Defendants failed to remove infringing content from www.dekotools.com and Amazon; Michel had to file its own takedown notice with the website host, and after the host removed the content, the merchant (using Ningbo's address) filed an appeal. A new Amazon seller called "DEKOPRO" affiliated with Deko Electric (US) also began selling the same previously-removed products.

Ningbo and Deko offered no evidence that compliance was impossible, that any inability to comply was not self-induced, or that they made good-faith efforts to comply. The court therefore granted the contempt motion.

On relief: The court ordered Michel to submit by November 17, 2025, a specific request for relief including supporting documentation for: (1) disgorgement of Defendants' profits from infringing sales; (2) attorney fees and costs incurred in connection with the noncompliance; and (3) proposed modifications to the preliminary injunction.

Motion for Default Judgment Against Deko (DENIED)

Michel originally sought default judgment against both Ningbo and Deko. After Ningbo voluntarily appeared, Michel narrowed its request to Deko only, asking the court to enter but withhold execution of the judgment until the end of the case.

The court denied the motion. Citing the Eighth Circuit's decision in Angelo Iafrate Contr., LLC v. Potashnick Constr., Inc., 370 F.3d 715 (8th Cir. 2004), and the underlying principle of Frow v. De La Vega, 82 U.S. 552 (1872), the court held that where co-defendants are alleged to be jointly liable, the better practice is to withhold default judgment against the non-appearing defendant until the case is resolved on the merits against the appearing defendant. If Ningbo were to prevail on the merits, entering a prior default judgment against Deko (which Michel alleges is jointly and severally liable with Ningbo) would produce an inconsistent result. The court expressly permitted Michel to renew its default judgment motion once the claims against Ningbo are resolved.