Shenzhen Chitado Technology Co., Ltd. v. G11 Flash Blue

Background

Shenzhen Chitado Technology Co., Ltd. applied for a preliminary injunction against G11 Flash Blue and 11 other listed defendants in connection with online marketplace accounts and domain names identified in Exhibit A. The application concerned products allegedly bearing counterfeit versions of Shenzhen Chitado's GYROOR trademark, which the order states is registered on the federal Principal Register.

The court determined that it had personal jurisdiction over the defendants because they directly targeted consumers in the United States, including New York consumers, by operating interactive internet stores through which products bearing the GYROOR trademark could be purchased and shipped into the district.

Court's Analysis

The court found that Shenzhen Chitado had shown a likelihood of success on the merits. Based on declarations from Jason Zhang and Ruoting Men and supporting evidence, the court found a preliminary case of trademark infringement because the GYROOR trademark was distinctive and federally registered, the defendants were not licensed or authorized to use it, and the defendants' use was likely to confuse consumers about the origin or sponsorship of their products.

The court also found that continued unauthorized use could cause lasting harm to Shenzhen Chitado's goodwill, brand confidence, reputation, exclusivity, and future sales. It concluded that money damages would not adequately address that harm and that the public interest favored an injunction to reduce consumer confusion.

Order

The court entered a preliminary injunction under Federal Rule of Civil Procedure 65 and continued the protections previously imposed by the March 3, 2022 temporary restraining order through the litigation. The defendants and persons acting with them were barred from using the GYROOR trademark or counterfeit or confusingly similar versions of it in connection with unauthorized products; passing off products as genuine GYROOR products; causing consumers to believe counterfeit products were authorized, sponsored, approved, or connected with Shenzhen Chitado; further infringing the trademark; competing unfairly; moving or disposing of unauthorized products bearing the trademark; and using or controlling the identified online marketplace accounts and domain names for counterfeit sales.

The order separately restrained the defendants and persons with actual notice from transferring or disposing of their money or other assets. Banks, payment processors, and other financial institutions, including Payoneer and PayPal, were ordered within two business days after receiving the order to locate connected accounts and funds and restrain those accounts from receiving, transferring, or disposing of the defendants' money or other assets.

The court ordered expedited discovery under Rule 26(d)(1). The defendants and notified third-party service providers—including online marketplaces, internet service providers, web hosts, payment providers, banks, shippers, and domain-name registrars—were required within five business days after notice to provide information about the defendants' identities and locations, operations, sales and financial information, websites and marketplace accounts, domain names, and financial accounts.

The order allowed Shenzhen Chitado to provide notice of the proceedings, the status hearing, and service of process by specified email and other methods. It stated that the defendants had provided false names and physical-address information in domain registrations and found physical delivery methods impracticable. Affected defendants could appear and move to dissolve or modify the order on two days' notice, or on shorter notice set by the court. Shenzhen Chitado's $5,000 bond was to remain with the court until final disposition or termination of the preliminary injunction.

This was an interlocutory order granting preliminary relief; the opinion found a likelihood of success rather than entering a final judgment on the trademark claims.