Smart Study Co. Ltd. v. Ababyking Store

Background

Smart Study Co., Ltd. sued various online merchants operating e-commerce storefronts on Amazon.com. The complaint alleged trademark counterfeiting, trademark infringement, false designation of origin, passing off, unfair competition, copyright infringement, and New York unfair competition based on alleged infringement of Smart Study’s Baby Shark trademarks and creative works.

The defendants identified in the order as the “defaulting defendants” did not answer the complaint. The Clerk of Court issued certificates of default on September 9, 2022, and Smart Study moved for a default judgment.

Service of Process

The court had previously authorized alternative service by email under Federal Rule of Civil Procedure 4(f)(3). After the court requested additional information, Smart Study submitted evidence describing its efforts to locate the defendants’ physical addresses. Those efforts included seeking expedited discovery from the defendants, financial institutions, and third-party service providers, including Amazon, as well as research by attorneys using Chinese search and business-registration resources.

The court found that Smart Study could not identify the defendants’ physical addresses despite exercising reasonable diligence. It also found that email service was reasonably calculated to provide notice consistent with due process. The court therefore accepted the email service for purposes of the default judgment.

Ruling

The court ordered that judgment be granted in favor of Smart Study on all claims properly pleaded against the defaulting defendants. Under the Lanham Act and the Copyright Act, it awarded Smart Study $75,000 in statutory damages against each defaulting defendant, plus post-judgment interest at the statutory rate.

The court permanently enjoined the defaulting defendants, their officers, agents, employees, and people acting with them from manufacturing, selling, promoting, or otherwise dealing in counterfeit products or products bearing, copying, or confusingly resembling Smart Study’s Baby Shark trademarks or works. The order also prohibited conduct intended to evade those restrictions.

The defaulting defendants were ordered to deliver infringing products and related packaging, labels, tags, advertising, promotional materials, and other infringing materials for destruction. Third-party service providers and financial institutions were permanently restrained from concealing, destroying, transferring, or otherwise dealing with records or evidence concerning the defaulting defendants’ assets and financial accounts, and from knowingly assisting prohibited activity.

Judge Naomi Reice Buchwald dissolved the usual 30-day automatic stay on enforcement of the judgment, allowed the defaulting defendants to seek modification or dissolution of certain restraints upon proper showing and notice, and stated that noncompliance could be treated as contempt of court. The court released Smart Study’s $10,000 security bond and retained jurisdiction to interpret and enforce the order.

Classification

This is classified as a procedural order because the judgment was entered by default after the defendants failed to answer, rather than after an adversarial examination of the claims.