Roadget Bus. PTE. v. PDD Holdings Inc.
| Docket Number | 1:22-cv-07119 |
| Decision Date | 31 July 2023 |
| Parties | ROADGET BUSINESS PTE. LTD., Plaintiff, v. PDD HOLDINGS INC., et al. Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Plaintiff Roadget Business Pte. Ltd. (Roadget) moves this Court to enter an emergency temporary restraining order (TRO) against Defendants PDD Holdings Inc. (PDD Holdings) and Whaleco, Inc. (Whaleco, collectively with PDD Holdings, Temu), pursuant to Federal Rule of Civil Procedure 65(b), enjoining Temu from ongoing infringement of Roadget's U.S. registered trademarks and copyrights related to Shein and associated brands. For the reasons stated below, the Court grants Roadget's motion for an emergency temporary restraining order.
Roadget a private limited company organized under the laws of Singapore, owns numerous U.S. trademarks and copyright registrations associated with Shein, a popular online fashion and lifestyle retailer, and its associated brands SHEIN CURVE, ROMWE, DAZY, EMERY ROSE, SHEGLAM, and LUVLETTE (SHEIN Marks). R. 76, TRO[1]at 2.[2] Whaleco, owns and operates Temu, which through a mobile application and website, allows customers to purchase everyday products, including clothing and home goods, from third-party sellers at competitive prices. R. 79 Resp. at 3. PDD Holdings, on information and belief, operates and controls the services offered on the Temu mobile application and website (Temu Platforms). TRO at 2; see also R. 64, Second Amended Complaint (SAC) ¶ 3. PDD Holdings also owns and operates Pinduoduo, a similar e-commerce platform used for PDD Holdings's Chinese customers. TRO at 2; see also SAC ¶ 3. Temu and Shein are competitors in the ecommerce space. Resp. at 3.
On December 16, 2022, Roadget filed this case against Temu asserting, among others, claims of Lanham Act trademark infringement arising from Temu's alleged use of SHEIN Marks on Temu Platforms and on counterfeit Shein products. SAC ¶ 1. On February 3, 2023, Roadget filed a motion for preliminary injunctive relief (PI Motion) against Temu, seeking to enjoin Temu from using alleged unauthorized Twitter accounts bearing the SHEIN Mark and including SHEIN Marks in Temu advertisements on the Google search engine. Resp. at 3; see also R. 23, PI Motion ¶¶ 3-4. The Court entered a briefing schedule on the motion. R. 27.
While the PI Motion was still being briefed, Roadget sought leave to supplement its PI Motion, after finding additional evidence of Temu's alleged misuse of the SHEIN Mark. R. 53, Supp. PI Motion. The supplement identified the use of the SHEIN Mark on the “Shein” results title page for the Temu website and as a watermark on images posted to the Temu website. Id. ¶ 4.
On March 1, 2023, Roadget filed a First Amended Complaint (FAC). R. 33. The FAC, among other things, added PDD Holdings and various unnamed Does as defendants. On June 9, 2023, Roadget sought leave to file the SAC (R. 61), which the Court granted on June 14, 2023 (R. 63), before the Court ruled on the PI Motion. The sprawling SAC, consisting of 17 counts, adds claims for contributory and vicarious trademark infringement (Counts III and IV), copyright infringement and inducement (Counts IX to XII), and trademark dilution under Illinois statute (Count XIV), and removes claims under the Illinois consumer fraud statute and brings its disparagement and trade libel claim under Massachusetts common law as opposed to Illinois statute (Count XVII). Yet still, Roadget has signaled to Temu and the Court that it plans to file a third amended complaint, R. 83, Reply at 3 ().
On July 7, 2023, Roadget filed this motion for TRO, alleging that Roadget had identified more evidence of Temu's misuse of the SHEIN Mark and failure to properly resolve, if resolve at all, instances of misuse of the SHEIN Mark by Temu's third-party sellers of which Roadget notified Temu. In particular, Roadget discovered the following violations of the SHEIN Mark on:
(i) clothing designs (SAC ¶¶ 192-97); (ii) product labels used in images for listings that do not sell genuine SHEIN apparel (id. ¶¶ 136-40); (iii) webpage titles falsely advertising that “Shein”, and affiliate-branded products can be purchased “On Temu” (id. ¶¶ 163-74); (iv) a counterfeit storefront called SHINE that uses an intentional misspelling and well-known phonetic mispronunciation of SHEIN and displays product images copied from Shein's website (id. ¶¶ 215-20); and (v) in Temu-generated search term recommendations (id. ¶¶ 175-91).
Roadget insists that it has notified Temu of thousands of instances of the misuse of the SHEIN Mark on Temu Platforms and requested the prompt removal of the misuses from the website. TRO at 1; see Resp. at 1. Temu claims that it has removed a majority of the infringing SHEIN Marks from Temu platforms, Resp. at 1, but Roadget counters that Temu has either “ignored, relisted, or unduly delayed acting on these notices.” TRO at 1. Roadget cites the abovementioned newly discovered misuses of the SHEIN Mark as evidence of misuse.
Before the Court is Roadget's pending motion for TRO. Roadget is seeking a TRO on its Trademark Infringement, False Designation of Origin, and Copyright Infringement Claims only. Roadget maintains that it is entitled to injunctive relief because there is (1) a likelihood of success on the merits; (2) a threat of irreparable harm; (3) the threatened harm to Roadget outweighs that of the harm to Temu; and (4) the public interest requires such action. TRO at 4. Roadget submits the declarations of Roadget in-house counsel Tim Wei (R. 73, Decl. Wei), George Chiao, the president of Shein Distribution Corporation (R. 74, Decl. Chiao), and Nina Boyajian, counsel for Roadget (R. 75, Decl. Boyajian) in support of its motion.
The Court promptly set a briefing schedule, and hearing date for July 19, 2023, for the motion, R. 82, Minute Entry. However, due to the parties' unavailability the hearing was rescheduled to July 27, 2023. R. 84, Minute Entry. Temu filed a response opposing the TRO, supported by declarations from Zhu Ji, Temu's Director of trust and safety, and Ryan Benyamin, counsel of record for Temu. Resp., Exhs. A-B. In its response, Temu argues that Roadget's TRO should be denied because Roadget is not likely to succeed on any claim that would warrant injunctive relief, the TRO is overbroad, and the harm is not irreparable. Resp. at 3. Roadget filed a reply. The Court heard oral argument on the TRO on July 27, 2023. R. 96, TRO Hrg.
A TRO is “an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion.” See Goodman v. Ill. Dept of Fin. & Profl Regulation, 430 F.3d 432, 437 (7th Cir. 2005) (quoting Mazurek v. Armstrong, 520 U.S. 968, 972 (1997)). The standard for obtaining a TRO is the same as that is required to issue a preliminary injunction. See Merritte v. Kessel, 561 Fed.Appx. 546, 548 (7th Cir. 2014). To obtain a TRO, a movant must demonstrate: (1) a likelihood of success on the merits; (2) that it has no adequate remedy at law; and (3) that it will suffer irreparable harm if the relief is not granted. See Right Field Rooftops, LLC, 80 F.Supp.3d at 832 ).
If the moving party satisfies each of these requirements, the court “must weigh the harm that the plaintiff will suffer absent an injunction against the harm to the defendant from an injunction[.]” GEFT Outdoors, LLC v. City of Westfield, 922 F.3d 357, 364 (7th Cir. 2019) (). “Specifically, the court weighs the irreparable harm that the moving party would endure without the protection of the preliminary injunction against any irreparable harm the nonmoving party would suffer if the court were to grant the requested relief.” Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the U.S.A., Inc., 549 F.3d 1079, 1086 (7th Cir. 2008) (citing Abbott Labs. v Mead Johnson & Co., 971 F.2d 6, 11-12 (7th Cir. 1992)).
The Seventh Circuit has described this balancing test as a “sliding scale”: “if a plaintiff is more likely to win, the balance of harms can weigh less heavily in its favor, but the less likely a plaintiff is to win[,] the more that balance would need to weigh in its favor.” GEFT Outdoors, 992 F.3d at 364 (citing Planned Parenthood, 896 F.3d at 816). Finally, in balancing the harms, the court must consider the interests of non-parties in granting or denying the requested relief. Ty, Inc., v. Jones Grp., Inc., 237 F.3d 891, 895 (7th Cir. 2001).
In resolving a motion for TRO, the Court reviews the record from a “neutral and objective viewpoint” without accepting Roadget's allegations as true, nor drawing reasonable inferences in Roadget's favor. Doe v. University of Chicago, 2022 WL 16744310, at *2 (N.D. Ill. Nov. 7, 2022) (citing Doe v. Univ. of S. Indiana, 43 F.4th 784, 791 (7th Cir. 2022)). The Court must “make factual determinations on the basis of a fair interpretation of the evidence before the court” at this stage. Darryl H. v. Coler, 801 F.2d 893, 898 (7th Cir. 1986). However, the findings are only preliminary, and “do not bind the district court as the case progresses.” Mich. v. U.S. Army Corps of Eng'rs, 667 F.3d 765, 782 (7th Cir. 2011).
The Court begins its analysis with whether Roadget has established the likelihood of success on the merits for its (1) Trademark Infringement and False Designation of Origin and (2) Copyright Infringement claims.[3]
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