King Spider LLC v. 884886 CH Store

Background

On October 9, 2023, King Spider LLC moved for a new temporary restraining order, expanding the requested relief to several new merchant defendants. The opinion refers to those parties as the “New Merchant Defendants.” The Alibaba Defendants appeared through counsel and filed a response after the court invited them to do so.

Standing to Object

The Alibaba Defendants stated that they objected to the proposed temporary restraining order only as it affected them and took no position on the order as to the other defendants. The court nevertheless found that they lacked standing—the legal ability to challenge the order—as to the New Merchant Defendants and other parties. The Alibaba Defendants did have standing to challenge the proposed order insofar as it would apply to them.

Scope of the Temporary Restraining Order

The court found many of the Alibaba Defendants’ arguments unpersuasive but agreed that the proposed order was too broad to the extent it might require them to shut down entirely the storefronts and accounts of merchant defendants accused of infringement. The court cited concerns that full storefront shutdowns could cause third-party service providers reputational harm and business losses, and that such relief would not be narrowly tailored to prohibit only illegal conduct. The opinion also noted that shutting down entire storefronts could prevent sales and purchases of lawful products merely because some products allegedly violated the law.

Ruling

The court held that King Spider’s proposed temporary restraining order had to be modified to comply with the limits of appropriate preliminary injunctive relief and to avoid irreparable harm to the Alibaba Defendants. By a separate order issued the same day, Judge Jesse M. Furman granted King Spider’s request for a temporary restraining order, subject to modifications, including the limits discussed in this opinion.