The Pinkfong Company, Inc. v. ADS-SS

Background

The Pinkfong Company, Inc. applied for a preliminary injunction against ADS-SS and the other named defendants. Pinkfong alleged that defendants operated interactive Amazon merchant storefronts through which New York consumers could purchase counterfeit versions of Pinkfong’s Baby Shark products. The claims identified in the order included trademark counterfeiting, infringement of registered and unregistered trademarks, false designation of origin, copyright infringement, and unfair competition. No defendants appeared at the May 31, 2023, conference concerning the application.

Personal jurisdiction

The court held that it had personal jurisdiction over the defendants. It relied on New York’s long-arm statute, which permits jurisdiction over a defendant that transacts business in New York when the claims have an articulable connection to that business. The court found that defendants’ interactive Amazon storefronts allowed New York consumers to communicate with defendants and purchase goods, and that the claims were connected to those transactions.

The court also found that exercising jurisdiction was consistent with constitutional due process. It determined that defendants had sufficient minimum contacts with New York because they deliberately chose to sell products to New York customers and benefit from those sales. The court further found that New York had an interest in resolving the dispute because the products were available for sale and likely sold there.

Preliminary-injunction findings

A preliminary injunction is a temporary court order issued before final judgment. The court stated that Pinkfong had to show a likelihood of success on the merits, or sufficiently serious questions for litigation with the balance of hardships strongly favoring Pinkfong; likely irreparable harm without an injunction; that the balance of hardships favored Pinkfong; and that the injunction would not harm the public interest.

The court found that Pinkfong had shown a likelihood of success on its copyright claim. Pinkfong provided evidence of valid copyright registrations and evidence that defendants’ products looked substantially similar to Pinkfong’s products and were sold without Pinkfong’s consent. The court also found likely irreparable harm to Pinkfong’s business, value, goodwill, and reputation if the products continued to be sold. It concluded that the balance of hardships favored Pinkfong and that an injunction served the public interest by reducing confusion and supporting respect for intellectual-property rights.

Order

The court ordered that the restraints in the temporary restraining order issued May 9, 2023, and extended May 15, 2023, remain in place and that a preliminary injunction issue under Federal Rule of Civil Procedure 65.

The injunction restrains defendants from manufacturing, importing, exporting, advertising, marketing, promoting, distributing, displaying, offering for sale, selling, or otherwise dealing in counterfeit products or products bearing Pinkfong’s Baby Shark marks or works, or marks or works that are confusingly or substantially similar. It also prohibits operation of merchant storefronts that offered or sold counterfeit products, infringement of the Baby Shark marks or works, use of unauthorized reproductions or imitations, false designations or descriptions likely to confuse the public, concealment or disposal of counterfeit products or related records, efforts to evade the order, and knowingly instructing others to engage in those activities.

The order also restrains defendants and qualifying persons acting with them from transferring, disposing of, withdrawing, encumbering, or paying defendants’ assets from or to defendants’ financial accounts. Newly identified financial institutions must locate and attach covered accounts and provide specified information. The order continues expedited discovery, requiring defendants, financial institutions, and third-party service providers receiving the required notice to provide specified interrogatory answers, documents, account information, sales and listing histories, and other records within the stated deadlines.

The court authorized specified methods of electronic service on defendants, third-party service providers, and financial institutions. It warned that defendants could be deemed to have actual notice and that violations could be treated as contempt of court. Pinkfong’s $5,000 bond was to remain with the court until final disposition or termination of the order. The order remained effective during the case or until further order, and defendants subject to it could move to dissolve or modify it on two days’ notice or shorter notice set by the court. The clerk was directed to unseal the action, and the parties were directed to file previously submitted documents publicly by June 9, 2023.

Ruling

Judge Schofield issued the preliminary injunction and continued the temporary asset restraints and expedited discovery. The order did not make a final determination of liability; it governed the parties and specified third parties while the litigation continued.