ALLSTAR MARKETING GROUP, LLC v. ALLSTAR_PLACE

Background

Allstar Marketing Group, LLC applied ex parte for emergency relief concerning defendants’ alleged manufacture, sale, and distribution of counterfeit products using the Happy Nappers marks and copyrighted works. The court’s findings stated that Allstar held rights connected to the Happy Nappers products, marks, and works, and that defendants were offering counterfeit products through user accounts and merchant storefronts on eBay.

Allstar argued that it and consumers would suffer immediate and irreparable harm without emergency relief. The court found that the alleged counterfeit products could harm Allstar’s sales, goodwill, and reputation and could confuse or disappoint consumers. The court also found that defendants might hide or dispose of counterfeit products, records, or proceeds if they received advance notice.

Issues with the Proposed Order

The court held an ex parte hearing on July 9, 2021. It raised concerns that the original proposed temporary restraining order was broader than Federal Rule of Civil Procedure 65(d)(2) allowed. That rule limits who may be bound to the parties, certain people connected to the parties, and other people who are actively working with or participating with them and receive actual notice.

The original proposal would have imposed obligations on broad groups of financial institutions and third-party service providers without showing that each entity was actively working with defendants. It also would have required those entities to provide discovery without subpoenas and without giving them a normal opportunity to object or ask that a subpoena be canceled. The court revised the order so that discovery from those entities would proceed through subpoenas, which the entities could timely challenge.

The court also removed language authorizing alternative electronic service on financial institutions and third-party service providers insofar as that language sought to replace formal service without supporting justification. The court explained that entities actively working with defendants could be bound after receiving actual notice, but the request for broader formal-service provisions was unsupported.

Ruling and Relief Granted

The court stated that Allstar’s application was granted. The resulting order issued a temporary restraining order for 14 days, subject to any further period provided by court order. It prohibited the defendants from specified activities involving counterfeit products and the Happy Nappers marks and works, including making, advertising, offering for sale, selling, or otherwise dealing in those products. It also prohibited conduct likely to confuse the public about the products’ affiliation, origin, sponsorship, or approval and restricted concealment or disposal of relevant products, records, and assets.

The order extended specified restrictions to people actively working with or participating with defendants who received actual notice, including qualifying financial institutions and third-party service providers identified in the order. It addressed movement of defendants’ assets, preservation of records, and continued services to defendants’ user accounts and merchant storefronts. The order also authorized Allstar to seek an asset restraint and to use expedited subpoenas to identify defendants’ financial accounts, user accounts, merchant storefronts, contact information, sales records, and related documents.

The order directed defendants to show cause why a preliminary injunction should not issue. It authorized electronic service on defendants and specified entities, required a $5,000 security bond, and kept the complaint, supporting materials, application, declarations, exhibits, and order under seal until the conditions stated in the order were met.

Classification

This is a procedural order because it grants temporary and ancillary relief—rather than finally deciding the underlying infringement claims—including emergency restraints, asset protection, service provisions, expedited discovery, and a process for considering a later preliminary injunction.