Kelly Toys Holdings LLC. v. 19885566 Store
- Jesse Furman
- 1:22-cv-09384
- U.S. District Court · Southern District of New York
- 2
In Kelly Toys v. 19885566 Store, Judge Furman granted in part and denied in part Alibaba’s request to pause a contempt order.
Alibaba, Kelly Toys Holdings, LLC, and the merchants referred to as Defendants were affected. Alibaba’s obligation to prevent listings or relistings was temporarily paused, but its obligation not to promote the counterfeit Squishmallows remained in effect.
What happened
In Kelly Toys Holdings, LLC v. 19885566 Store, Alibaba asked the court to pause enforcement of an earlier order finding contempt while the court considered Alibaba’s request to reconsider that order.
The court paused the requirement that Alibaba prevent merchants from listing or relisting counterfeit Squishmallows because Alibaba showed that enforcing that requirement could seriously harm its business reputation. But the court did not pause the requirements barring Alibaba from promoting the counterfeit products through sponsored advertisements, keyword searches, targeted emails, or other methods.
Judge Jesse M. Furman therefore granted in part and denied in part Alibaba’s motion to stay the contempt order and ordered Alibaba to comply with the order’s restrictions on promotion.
The detailed version
- Kelly Toys Holdings LLC. v. 19885566 Store · No. 1:22-cv-09384
- Jesse Furman
- July 20, 2023
Background
Alibaba moved for reconsideration of the court’s June 29, 2023 contempt order. It also asked the court to stay, or temporarily pause, enforcement of that order while the reconsideration motion was pending. The court had temporarily granted a stay and then considered the parties’ additional written submissions.
Court’s Analysis
The court granted the stay insofar as the contempt order required Alibaba to prevent merchants from listing or relisting counterfeit Squishmallows. The court found that Alibaba had shown a likelihood of irreparable harm to its business reputation. Alibaba argued that the only way to prevent the merchants from listing or relisting counterfeit products might be to take down their storefronts entirely, which could alienate those merchants and others. The court found that this was enough to show irreparable harm.
The court denied the stay insofar as the contempt order prohibited Alibaba from promoting the merchants’ counterfeit Squishmallows through sponsored advertisements, keyword searches on Alibaba, targeted emails, or other means. Alibaba stated that it had already taken steps to comply with those requirements. Although Kelly Toys disputed that statement, the court treated it as showing that Alibaba could comply without suffering undue hardship. The court also found that the other factors did not strongly favor a stay as to those promotional restrictions.
Disposition
The court granted in part and denied in part Alibaba’s motion to stay the contempt order pending a ruling on the motion for reconsideration. Alibaba was ordered to comply with the contempt order to the extent it prohibited Alibaba from promoting the merchants’ counterfeit Squishmallows. The opinion does not state how the court ultimately ruled on Alibaba’s separate motion for reconsideration.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.