Cisco Systems, Inc. v. Wuhan Wolon Communication Technology Co., Ltd

Background

Ciena Corporation moved on an emergency, without-notice basis for a temporary restraining order, an asset freeze, expedited discovery, permission to serve the defendants by email, and an order requiring the defendants to explain why a preliminary injunction should not issue. The defendants were Wuhan Wolon Communication Technology Co., Ltd. and Wuhan Wolon Cloud Network Communication Technology Co., Ltd., collectively called “Wolon.” Wolon was not heard before the order was entered.

Ciena develops, manufactures, and sells telecommunications equipment, including transceivers. Ciena owns federal registrations for the “CIENA” word mark and logo. Ciena presented evidence that Wolon offered purported Ciena transceivers and labels online to United States customers and shipped them to this district. Ciena examined five samples and concluded that they were inauthentic. The opinion says that some investigation details were sealed.

Temporary restraining order

The court applied the four-factor standard used for preliminary injunctions: likelihood of success on the merits, likely irreparable harm without relief, the balance of hardships, and the public interest. It found that Ciena was likely to succeed on its federal claims for trademark infringement, counterfeiting, false designation of origin, and related unfair competition claims. The court also found a likelihood of success on Ciena’s California unfair-competition and false-advertising claims because those claims were substantially aligned with the federal claims.

The court found likely irreparable harm to Ciena’s goodwill and reputation because the allegedly counterfeit products appeared inferior and had not undergone Ciena’s quality-control and safety testing. It also found that the balance of hardships favored Ciena and that the public interest favored relief because counterfeit transceivers could threaten data integrity, equipment, and physical safety. The court therefore granted Ciena’s request for a temporary restraining order.

The order temporarily restrained Wolon and specified related persons from using the CIENA marks or confusingly similar marks, selling or promoting counterfeit or authentic Ciena products in the prohibited ways, unfairly competing with Ciena, making false associations with Ciena, diluting the marks, destroying or transferring relevant records, or assisting others in those activities.

Asset freeze and online restrictions

The court granted Ciena’s request to freeze Wolon’s assets, including but not limited to an account at China Construction Bank. The order required financial institutions and other entities holding Wolon’s assets, funds, property, inventory, or receivables to preserve them and provide an accounting within three business days after receiving the order.

The court also granted relief concerning Wolon’s online seller identifications and domain names, including wolonte.com. The order restricted transfers, required specified domain-related steps involving a registrar chosen by Ciena, and required online marketplaces, search engines, registrars, carriers, and other listed entities to disable or remove listings, advertisements, links, or services connected to the alleged counterfeit products. The order also required certain Ciena-marked products to be separated and delivered to Ciena’s counsel for examination and storage.

Expedited discovery and service

The court granted expedited discovery. Wolon was ordered to provide information about suppliers and customers involved in products using the CIENA marks during the preceding 24 months. Third parties were ordered to provide information about Wolon’s identities, operations, online accounts, financial accounts, payment methods, shipments, listings, and related owners and employees.

The court authorized service of the summons, complaint, order, and supporting papers by email to sales01@wolonte.com, finding that this method was reasonably calculated to provide notice. The court found that advance notice was unnecessary because Ciena had shown that Wolon could dispose of or conceal counterfeit goods and evidence. The court also granted the temporary restraining order without requiring Ciena to post a bond or other security.

Duration and further hearing

The court extended the temporary restraining order for an additional 20 days because the first available hearing date was more than 14 days away. It set an August 26, 2021 hearing requiring Wolon to show cause why a preliminary injunction should not issue. The order stated that failing to attend or respond could result in issuance of a preliminary injunction, but the opinion itself granted the temporary restraining order and did not finally decide the case’s claims.

Disposition

Judge Edward J. Davila granted Ciena’s emergency motion as described in the order, including the temporary restraining order, asset freeze, restrictions involving domain names and online sellers, expedited discovery, alternative email service, and related orders.