The Kyjen Company v. Individuals

Background

The Kyjen Company, LLC applied without advance notice to the defendants for emergency relief concerning products that Kyjen alleged infringed its trademarks and design patents. The requested relief included a temporary restraining order, a restraint on certain assets, expedited discovery, and an order requiring the defendants to explain why a preliminary injunction should not issue.

The court found that the defendants had offered for sale allegedly substandard and unauthorized products through accounts on Amazon, DHgate, eBay, Walmart, and Wish. It found that Kyjen was likely to prevail at trial on claims for trademark infringement, patent infringement, false designation of origin, and unfair competition. The court also found that Kyjen was likely to suffer immediate and irreparable harm to its business, goodwill, and reputation before the defendants could respond. It further found a risk that, if notified in advance, the defendants would conceal or destroy products, records, and sale proceeds or move their online activities to new accounts.

Rulings on Requested Relief

The court granted Kyjen’s application and temporarily enjoined the defendants from using Kyjen’s trademarks or patented designs in connection with the sale or promotion of infringing products; passing off products as genuine Kyjen products; misleading consumers about authorization, sponsorship, or approval; moving or disposing of infringing inventory; using specified online accounts or stores to continue selling infringing products; and operating related websites or other online presences.

The order directed the online marketplaces, domain-name registries, and other online service providers to disable the specified user accounts, stop displaying related advertisements, and prevent links to the identified online stores from appearing in search results. It also directed listed financial institutions and other payment processors to locate defendants’ accounts and assets, including cryptocurrency, and to restrain transfers or disposal of those assets until further order. Those institutions and service providers were ordered to provide identifying, account, and financial information in their possession, custody, or control, allowing expedited discovery.

Service and Website-Control Requests

The court denied at this time Kyjen’s request under Federal Rule of Civil Procedure 4(f)(3) to serve defendants located in China by email and online publication. The court held that Kyjen had not shown reasonable diligence in investigating defendants’ physical addresses. Because the Hague Convention applied, alternative service could not conflict with that international agreement. The court concluded that China’s objection to certain Hague Convention service methods extended to email and that the Convention did not authorize online-publication service merely because it did not expressly mention that method. The court stated that it would consider email or online-publication service if Kyjen later established sufficient diligence so that the Hague Convention no longer applied.

The court also denied Kyjen’s request for temporary control of the infringing online marketplace websites. It explained that this type of equitable relief is appropriate when defendants continue infringing in violation of a court order, and that Kyjen had cited no authority allowing temporary transfer of a domain not owned by the defendants.

Other Terms of the Order

Kyjen was required to deposit $5,000 as security for damages that might result from a wrongful restraint. Schedule A to the complaint and one exhibit were to remain sealed until the defendants’ accounts and assets were restrained, after which Kyjen had to file unsealed versions before the order expired. Defendants could appear and request that the order be dissolved or modified on two days’ notice, or on shorter notice set by the court.

The court scheduled a hearing for February 13, 2023, at which Kyjen could support its request for a preliminary injunction and defendants could oppose it. Opposition papers were due February 10, 2023, at 9:00 a.m. Judge Jennifer H. Rearden entered the temporary restraining order without notice at 5:00 p.m. on January 31, 2023, and provided that it would remain in effect for fourteen days. The order warned that failure to appear at the hearing could result in a preliminary injunction.