ABC Corp. v. The P'ship & Unincorporated Ass'ns
| Decision Date | 28 October 2022 |
| Docket Number | 2021-2150,2021-2277,2021-2355 |
| Parties | ABC CORPORATION I, ABC CORPORATION II, Plaintiffs-Appellees v. THE PARTNERSHIP AND UNINCORPORATED ASSOCIATIONS IDENTIFIED ON SCHEDULE "A", TOMOLOO OFFICIAL, TOMOLOO INE, TOMOLOO FRANCHISE, TOMOLOO-US, TOMOLOO FLAGSHIP, TOMOLOO TC, TOMOLOO DX, TOMOLOO INT, URBANMAX, GYROOR, FENGCHI- US, GYROOR US, Defendants GAODESHANGUS, Defendant-Appellant ABC CORPORATION I, ABC CORPORATION II, Plaintiffs-Appellees EBAY, INC., Plaintiff v. THE PARTNERSHIP AND UNINCORPORATED ASSOCIATIONS IDENTIFIED ON SCHEDULE "A", TOMOLOO OFFICIAL, TOMOLOO INE, TOMOLOO FRANCHISE, TOMOLOO-US, TOMOLOO FLAGSHIP, TOMOLOO TC, TOMOLOO DX, TOMOLOO INT, GAODESHANGUS, GYROOR, CARTSTACK, DIDEN WU, HUSNAL- COLLECTIONS, MHESTORE2009, WHOLESALESHOP666, CARRIE_YUX-5, 2013TANKSTRONG001, MIJIASTORE, PAUTA60, SKATEBOARDSTORE2012, SMG-STORE, STRONGJENNIE, CHO POWER SPORTS, SYLUS, XGN, SHAMOLUOTUO, XUEWEIWEIFUZHUANGDIAN, EVERCROSS, XIE SHI, JIANGYOU-US, RUNCHENYUN, TOMOLOO, SHOPCHEAPUNIVERSAL, TOMOLOO-NX, AOXTECH, BETTER TOMOLOO, LISON ET, GYROSHOES, HGSM STOREFRONT, HGSM, Defendants GYROOR US, URBANMAX, FENGCHI-US, Defendants-Appellants |
| Court | U.S. Court of Appeals — Federal Circuit |
Appeals from the United States District Court for the Northern District of Illinois in No. 1:20-cv-04806, Judge Thomas M. Durkin.
MARK BERKOWITZ, Tarter Krinsky &Drogin LLP, New York, NY argued for plaintiffs-appellees. Also represented by RICHARD LOMUSCIO. Also represented by Adam G. Kelly, Douglas N Masters, Neil G. Nandi, Arthur Tan-Chi Yuan, Loeb &Loeb LLP, Chicago, IL (withdrawn).
HE CHENG, Glacier Law LLP, New York, NY, argued for defendants-appellants. Also represented by TIANYU JU, TAO LIU.
Before DYK, TARANTO, and STOLL, Circuit Judges.
We address three appeals-filed by GaodeshangUS; by Fengchi-US and Urbanmax together; and by Gyroor-US- from orders entered by the district court in a case brought in 2020 by ABC Corporation I and ABC Corporation II (collectively, ABC), in which ABC asserted four design patents against several business entities selling hoverboards online. ABC identified the defendants through a Schedule A, which changed over time attached to the original and amended complaints. On November 24, 2020, the district court entered a preliminary injunction against the then-named defendants, which included Gyroor-US, though it had not yet been served with process and was not given advance notice under Federal Rule of Civil Procedure 65(a) of the request for a preliminary injunction. Six months later, on May 24, 2021, the district court granted ABC's motion to amend Schedule A to add GaodeshangUS, Fengchi-US, and Urbanmax, among others, thereby slating them to be defendants directly bound by the 2020 Preliminary Injunction, though these entities had not yet been served with process and did not receive Rule 65(a) notice. Because the required Rule 65(a) notice had not been given, we vacate the 2020 Preliminary Injunction as of its issuance, and, perhaps redundantly, we also vacate the May 24 Order insofar as it added defendants to the 2020 Preliminary Injunction.[1]
On August 17, 2020, ABC brought the present designpatent infringement action in the Northern District of Illinois, and it filed an amended complaint the next day. ABC identified the defendants by their "merchant names" listed in an attached Schedule A, and it described them as "Defendant Internet Stores" that were selling goods on Internet websites, including amazon.com. ABC accused those defendants of infringing U.S. Design Patents D737,723; D738,256; D784,195; and D785,112, which claim particular designs of powered, two-wheeled, handle-less, stand-on vehicles known as "hoverboards."
Appellant Gyroor-US was one of the originally named defendants, but it was not served with the complaint until December 29, 2020, or with the required summons until January 29, 2021. Of relevance to the issues that we address in this opinion, on November 19, 2020, ABC filed its third amended complaint, under seal (as with key previous filings), with the updated Schedule A naming Gyroor-US and also Jiangyou-US-an appellant in Appeal No. 221071 but not here-but not naming any other appellant here or in No. 22-1071. (Jiangyou-US, we note, was not served with process until June 25, 2021.)
On November 20, 2020, the day after it filed its third amended complaint, ABC filed a motion for a preliminary injunction. Four days later, on November 24, 2020, the court entered the 2020 Preliminary Injunction, covering the "defendants" then identified in Schedule A, plus "their affiliates, officers, agents, servants, employees, attorneys, confederates, and all persons acting for, with, by, through, under or in active concert with them." 21-2150 J.A. 9; cf. Federal Rule of Civil Procedure 65(d)(2) ( ). It is undisputed before us that Gyroor-US was not given notice that a motion for a preliminary injunction had been filed or was under consideration before the 2020 Preliminary Injunction was entered, and it was not served with process within thirty days of the entry of the preliminary injunction. Indeed, lack of pre-entry notice to most then-named defendants is reflected in the fact that the 2020 Preliminary Injunction itself unsealed the series of complaints and amended complaints and various motions and exhibits filed in the case until then, along with a previously entered temporary restraining order. J.A. 14.[2] On May 6, 2021, ABC filed a motion reflecting its concern about infringing activity by entities that were not named in Schedule A, and hence were not directly subject to the 2020 Preliminary Injunction, but that it had reason to think were affiliates of or in active concert with those already named in Schedule A. Specifically, ABC moved to amend Schedule A to add various entities to it, including GaodeshangUS, Fengchi-US, and Urbanmax, to become defendants.[3] On May 24, 2021, the district court granted ABC's motion to amend Schedule A (May 24 Order). The newly added defendants were not served with process until June 25, 2021, more than thirty days after the entry of the May 24 Order. Of relevance here, the record before us does not reflect that GaodeshangUS (a non-party) was served with notice of the filing or pendency of a motion to extend the 2020 Preliminary Injunction to it by amending Schedule A.
Immediately after the May 24 Order was entered, on the same day, two attorneys who were already representing Gyroor-US entered appearances for GaodeshangUS- in the two docket entries following the entry for the May 24 Order. The same day, in the next docket entry, GaodeshangUS filed a notice of appeal, which launched Appeal No. 21-2150.
On June 18, 2021, Fengchi-US and Urbanmax moved to clarify or to vacate the 2020 Preliminary Injunction. The district court, on August 9, 2021, ordered the 2020 Preliminary Injunction to remain in place, thus denying the motion. In so ruling, the court mentioned the challenge to the 2020 Preliminary Injunction for lack of required notice but did not rule on it, instead directing ABC to seek a new preliminary injunction in light of the notice challenge. Fengchi-US and Urbanmax filed a notice of appeal on September 2, 2021, which launched Appeal No. 21-2355.
The same day the district court issued its order on the motion filed by Fenchi-US and Urbanmax, August 9, 2021, Gyroor-US moved to dissolve the 2020 Preliminary Injunction. Gyroor-US raised, among other arguments, a challenge to the adequacy of notice before that injunction was issued (having at least once before raised the issue too late in briefing on another motion). The district court denied the motion on August 24, 2021, having already directed ABC to seek a new preliminary injunction in response to the notice-inadequacy contention of Fengshi-US and Urbanmax. Gyroor-US filed a notice of appeal on August 28, 2021, which launched Appeal No. 21-2277.
Though not directly at issue at this time, we note two developments in the record before us that post-date the foregoing orders and appeals. On October 6, 2021, the district court held GaodeshangUS, Fengchi-US, Urbanmax, and Gyroor-US (along with the additional appellants in No. 22-1071) in contempt of the 2020 Preliminary Injunction. The court stated that GaodeshangUS, Fengchi-US, and Urbanmax "do not dispute that they are affiliated with the store fronts addressed by [ABC's contempt] motion" and that "they have failed to show that the[ir] products are different from those covered by the [2020 Preliminary Injunction]." 21-2150 J.A. 5883. Relatedly, the same day, the district court, again noting that the "facts relating to notice are contested," granted ABC's motion for a new preliminary injunction (filed at the district court's direction), and the court entered the 2021 Preliminary Injunction one week later, on October 13, 2021.
We must address our jurisdiction to hear the three appeals decided in this opinion and, if we have jurisdiction, appellants' assertions that notice defects invalidate the challenged orders. The appeals concern orders that subject appellants to the 2020 Preliminary Injunction as defendants (as "parties," Rule 65(d)(2)(A)). The orders do not apply the injunction to appellants as persons found, in or before such orders, to be "in active concert or participation" with parties. Rule 65(d)(2)(C). No such finding was made, so we do not have before us a situation where a non-party is being subjected...
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