Cuiping Zhou v. Tchh-Dayup

Background

Cuiping Zhou and her relatives developed, marketed, sold, licensed, and distributed wallets under the “UTO” brand, which the opinion says is a trademark registered with the United States Patent and Trademark Office. Zhou is also identified as the registered owner of U.S. Patent No. 927,179 S, which covers a wallet-opening design with a leaf shape. The opinion says Zhou began selling the patented wallet through an authorized Amazon seller account in April 2018.

The defendants named in the caption are Tchh-Dayup, Innifer, Sumgogo, Dlseego, Nuer New, Foliates, Easygogo, Belsmi, Xtying, Juntianshangmaoyouxiangongsi, and Ruimo. The court found that, beginning in July 2019, the defendants manufactured, imported, exported, advertised, marketed, promoted, distributed, displayed, offered for sale, and sold through Amazon storefronts wallets that infringed the patent. The court also found that the defendants were not authorized distributors or licensees of the patent.

Court’s Findings

The court found that it had personal jurisdiction over the defendants because they operated Amazon storefronts through which customers in New York State purchased the accused products. It also found that Zhou had shown a likelihood of success on her patent-infringement claim. Applying the standard that an ordinary observer familiar with prior-art designs would be deceived into believing the accused product was the same as the patented design, the court concluded that the accused products and the patented design were substantially the same.

The court found that Zhou was likely to suffer immediate and irreparable losses before the defendants could respond, including lost revenue, market share, pricing power, reputation, and marketing opportunities. It found that the potential harm to Zhou outweighed the harm to the defendants from being prevented from continuing the challenged activities. The court also found that the public interest favored protecting Zhou’s patent rights and preventing consumers from being deceived by allegedly inferior, infringing products.

The court further found that advance notice could lead the defendants to hide, transfer, destroy, or otherwise make inaccessible their products, records, and documents. It concluded that these circumstances supported emergency relief, expedited discovery, and service by electronic means because Zhou had been unable, despite diligent efforts, to locate accurate address information.

Order

The court granted Zhou’s application as follows:

Temporary restraining order. Pending the hearing and determination of Zhou’s request for a preliminary injunction, the order restrained and enjoined the defendants from manufacturing, importing, exporting, advertising, marketing, promoting, distributing, displaying, offering for sale, or selling infringing products. It also prohibited specified conduct involving the concealment, destruction, transfer, or disposal of infringing products and related records, and prohibited efforts to circumvent the order through new entities, accounts, storefronts, or other platforms. The defendants were also barred from knowingly instructing, aiding, or encouraging others to engage in those activities.

The order extended specified restrictions to persons acting in concert or participation with the defendants who received actual notice. It also restrained Amazon.com, within five business days after receiving notice, from providing services to the defendants’ accounts or services used to market, advertise, sell, or offer for sale goods connected with the infringing products.

Order to show cause. The defendants were ordered to show cause at a hearing scheduled for October 27, 2022, why a preliminary injunction should not issue. The order set deadlines for opposition and reply papers.

Alternative service. The court authorized service on the defendants by electronic means. It provided that service would be effective when PDF copies of the order, summons, complaint, and supporting application papers were delivered to email addresses identified by Amazon.com. The order required service on the defendants within five days after Amazon complied with the information-disclosure provision.

Expedited discovery. Within 14 days after receiving the order, each served defendant was required to provide a sworn report identifying its true name and physical address, websites and online accounts or storefronts, sales records for infringing products, financial-account details, and steps taken to comply with the order. The defendants also had to respond under oath to permitted interrogatories and produce responsive documents within 14 days of service of the requests.

Amazon.com was ordered to identify the defendants’ user accounts and storefronts within five days of receiving the order and to provide records within 14 days concerning the accounts, the defendants’ identities and contact information, their businesses and finances, sales and listing history, and activities involving the allegedly infringing products.

Bond and sealing. Zhou was required to deposit a $500 security bond with the court to cover damages that might be recoverable from an improper or wrongful restraint. The complaint, exhibits, ex parte application, supporting declarations, exhibits, and the order were to remain sealed until Amazon complied with the specified order provision.

Disposition

The court granted the application for a temporary restraining order, an order to show cause concerning a preliminary injunction, alternative electronic service, expedited discovery, and related relief. The opinion does not state what happened after the scheduled preliminary-injunction proceedings.