Frugality Inc v. The Individuals Partnerships And Unincorporated Associations Identified on Schedule A

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA Case No. 21-cv-23025-BLOOM/Otazo-Reyes FRUGALITY INC., Plaintiff, v. THE INDIVIDUALS, PARTNERSHIPS, AND UNINCORPORATED ASSOCIATIONS IDENTIFIED ON SCHEDULE “A,” Defendants. ______________________________________/ ORDER GRANTING MOTION FOR PRELIMINARY INJUNCTION THIS CAUSE is before the Court on Plaintiff Frugality Inc.’s (“Plaintiff”) Motion for Preliminary Injunction, ECF No. [4] (“Motion”), filed on August 19, 2021 pursuant to 15 U.S.C. § 1116, Federal Rule of Civil Procedure 65, and The All Writs Act, 28 U.S.C. § 1651(a).

On August 24, 2021, the Court entered a Temporary Restraining Order and an Order Restraining the Financial Accounts used by Defendants, ECF No. [11] (“TRO”). The TRO set a hearing on the Plaintiff Motion for Preliminary Injunction for September 1, 2021. Thereafter, Plaintiff sought two continuances of the Preliminary Injunction Hearing, ECF Nos. [14] & [19], which the Court granted, ECF No. [15] & [21]. The Preliminary Injunction Hearing was ultimately held on September 17, 2021 at 3:00 p.m. via remote video conference. ECF Nos. [21] & [32].

Prior to the hearing on the Motion for Preliminary Injunction, Plaintiff filed two Proof(s) of Service, ECF No. [29] & [30], demonstrating service on Defendants pursuant to the Court’s Order Authorizing Alternative Service of Process, ECF No. [12]. The Proof(s) of Service affirmed that Plaintiff served process on Defendants identified on Schedule A by emailing these Defendants the text of the summons issued in this action and the link http://www.sriplaw.com/notice, where the full text of the Complaint, exhibits thereto, Temporary Restraining Order, and the full text of all other documents filed in this action are available to view and download in compliance with this Court’s Order on Alternate Service, with the exception of Defendants numbered 485, 486, 487, 488, 489, 490.

At the Preliminary Injunction Hearing, the Court inquired whether service had been made on all Defendants, and Plaintiff confirmed that service was made on all Defendants identified on Schedule A, except for Defendants numbered 485, 486, 487, 488, 489, 490. Plaintiff requested that the TRO be extended as to those Defendants on which service had not yet been made. The Court found that good cause was not shown for the extension of the TRO on those Defendants and denied Plaintiff’s ore tenus motion.

The Court heard argument from Plaintiff and reviewed the evidence presented to the Court on the Motion. Having considered the evidence and the arguments, the Court grants Plaintiff’s Motion for Entry of a Preliminary Injunction in its entirety against the Defendants identified in Schedule A hereto, which does not include Defendants numbered 485, 486, 487, 488, 489, 490 on whom service has not been made, and the TRO is dissolved as to Defendants numbered 485, 486, 487, 488, 489, 490.

The Court determines that it has personal jurisdiction over Defendants identified on Schedule A hereto since the evidence presented on the Motion shows that Defendants, except those indicated above on whom service was not made, have been served with process pursuant to this Court’s order authorizing alternative service. The Court also determines that these Defendants directly target their business activities toward consumers in the United States, including Florida, and specifically that Defendants are reaching out to do business with Florida residents by operating one or more commercial, interactive internet stores on internet marketplaces where Florida residents can purchase products bearing infringing and/or counterfeit trademarks belonging to the plaintiff.

This Court further determines that the temporary restraints previously granted in the TRO should remain in place through the pendency of this litigation and that issuing this Preliminary Injunction is warranted under Federal Rule of Civil Procedure 65. Evidence submitted in support of this Motion and in support of Plaintiff’s previously granted Motion for a Temporary Restraining Order establishes that Plaintiff has a likelihood of success on the merits; that no remedy at law exists; and that Plaintiff will suffer irreparable harm if the injunction is not granted.

The Court concludes that Plaintiff has a strong probability of proving at trial that consumers are likely to be confused by Defendants’ advertisement, promotion, sale, offer for sale, or distribution of goods bearing counterfeits, reproductions, or colorable imitations of the products using the SECRET XPRESS CONTROL trademark, U.S. Reg. No. 5990755 for “Mascaras” in International Class 3 registered February 18, 2020.

The potential harm to Defendants in restraining their trade in counterfeit and infringing branded goods if a preliminary injunction is issued is far outweighed by the potential harm to Plaintiff, its reputation, and its goodwill as a manufacturer and distributor of quality products, if such relief is not issued. The public interest favors issuance of the temporary restraining order to protect Plaintiff’s trademark interests and protect the public from being defrauded by the palming off of counterfeit goods as Plaintiff’s genuine goods.

Further, under 15 U.S.C. § 1117(a), Plaintiff may be entitled to recover, as an equitable remedy, the illegal profits gained through Defendants’ distribution and sales of goods bearing counterfeits and infringements of Plaintiff’s trademarks. See Levi Strauss & Co. v. Sunrise Int’l Trading Inc., 51 F.3d 982, 987 (11th Cir. 1995); Reebok Int’l, Ltd. v. Marnatech Enters., Inc., 970 F.2d 552, 559 (9th Cir. 1992).

In light of the inherently deceptive nature of the counterfeiting business, and the likelihood that Defendants have violated federal trademark laws, Plaintiff has good reason to believe Defendants will hide or transfer their ill-gotten assets beyond the jurisdiction of this Court unless the restraint of those assets ordered in the TRO is continued.

Accordingly, the court, having considered the motion, and having found good cause, it is ORDERED that the Motion, ECF No. [4], is GRANTED and a preliminary injunction is entered as follows: PRELIMINARY INJUNCTION Each Defendant listed on Schedule A attached hereto, its officers, directors, employees, agents, subsidiaries, distributors, and all persons in active concert or participation with any Defendant having notice of this Order are restrained and enjoined during the pendency of this case: a. From manufacturing, importing, advertising, promoting, offering to sell, selling, distributing, or transferring any products bearing the SECRET XPRESS CONTROL Mark, or any confusingly similar trademarks, other than those actually manufactured or distributed by plaintiff; and b. From secreting, concealing, destroying, selling off, transferring, or otherwise disposing of: (i) any products, not manufactured or distributed by plaintiff, bearing and/or using the SECRET XPRESS CONTROL Mark, or any confusingly similar trademarks; or (ii) any evidence relating to the manufacture, importation, sale, offer for sale, distribution, or transfer of any products bearing and/or using the SECRET XPRESS CONTROL Mark, or any confusingly similar trademarks; or (iii) any assets or other financial accounts subject to this Order, including inventory assets, in the actual or constructive possession of, or owned, controlled, or held by, or subject to access by, any Defendant, including, but not limited to, any assets held by or on behalf of any Defendant; Each Defendant, its officers, directors, employees, agents, subsidiaries, distributors, and all persons in active concert or participation with any Defendant having notice of this Preliminary Injunction shall immediately discontinue, until further Order of this Court, the use of the SECRET XPRESS CONTROL Mark, or any confusingly similar trademarks, on or in connection with all Internet based e-commerce stores owned and operated, or controlled by them, including the Internet based e-commerce stores operating under the Seller IDs. This order is limited to the Defendants’ listings using the SECRET XPRESS CONTROL Mark, or any confusingly similar trademarks, on or in connection with all Internet based e-commerce stores owned and operated, or controlled by them, including the Internet based e-commerce stores operating under the Seller IDs, and does not apply to the Defendants’ entire e-commerce stores.

Each Defendant, its officers, directors, employees, agents, subsidiaries, distributors, and all persons in active concert or participation with any Defendant having notice of this Preliminary Injunction shall immediately discontinue, until further Order of this Court, the use of the SECRET XPRESS CONTROL Mark, or any confusingly similar trademarks, within domain name extensions, metatags or other markers within website source code, from use on any webpage (including as the title of any web page), from any advertising links to other websites, from search engines’ databases or cache memory, and any other form of use of such terms that are visible to a computer user or serves to direct computer searches to Internet based e-commerce stores registered, owned, or operated by any Defendant, including the Internet based e-commerce stores operating under the Seller IDs.

Each Defendant shall not transfer ownership of the Seller IDs during the pendency of this action, or until further order of the Court.

Each Defendant shall continue to preserve copies of all computer files relating to the use of any of the Seller IDs and shall take all steps necessary to retrieve computer files relating to the use of the Seller IDs that may have been deleted before the entry of this Order.

Defendants and all financial institutions, payment processors, banks, escrow services, money transmitters, or marketplace platforms, including but not limited to, Alibaba.com Hong Kong Limited, which operates the AliExpress.com platform (“AliExpress”), Zhejiang Ant Small and Micro Financial Services Group Co., Ltd. (“Ant Financial Services”), AliPay (China) Internet Technology Co. Ltd., Alipay.com Co., Ltd., and Alipay Singapore E-Commerce Private Limited (collectively, “Alipay”), Amazon Payments, Inc. (“Amazon”), Dunhuang Group which operates the DHgate.com and DHPay.com platforms, Camel FinTech Inc, ContextLogic, Inc., which operates the Wish.com website (“ContextLogic”), PayPal, Inc. (“PayPal”), eBay, Inc. (“eBay”), Payoneer, Inc. (“Payoneer”), NewEgg Commerce, Inc. (“NewEgg”), WorldFirst UK Limited (“WorldFirst”), or PingPong Global Solutions Inc. (“PingPong”), Joom, SIA (Latvia) (“Joom”), Stripe, Inc. and/or Stripe Payments Company (“Stripe”) and their related companies and affiliates shall continue the restraints imposed under the TRO until further Order of this Court and, to the extent not already done, (i) restrain the transfer of all funds, as opposed to ongoing account activity, held or received for their benefit or to be transferred into their respective financial accounts, and any other financial accounts tied thereto; (ii) divert those restrained funds to a holding account for the trust of the Court.; (iii) identify all financial accounts and/or sub-accounts, associated with the Internet based e-commerce stores operating under the Seller IDs, store numbers, infringing product numbers, and/or the e-mail addresses identified on Schedule “A” hereto, as well as any other accounts of the same customer(s); (iv) identify all other accounts which transfer funds into the same financial institution account(s) or any of the other financial accounts subject to this Order; Upon receipt of notice of this Preliminary Injunction, Defendants and all financial institutions, payment processors, banks, escrow services, money transmitters, or marketplace platforms receiving notice of this Order, including but not limited to, AliExpress, Ant Financial Services, Alipay, Amazon, Dunhuang Group which operates the DHgate.com and DHpay.com platforms, Camel FinTech Inc, ContextLogic, PayPal, eBay, Payoneer, NewEgg WorldFirst, PingPong, Joom, Stripe, and their related companies and affiliates, shall to the extent not already done, provide plaintiff’s counsel with all data that details: (i) an accounting of the total funds restrained and identify the financial account(s) and sub-account(s) which the restrained funds are related to; (ii) the account transactions related to all funds transmitted into the financial account(s) and sub-account(s) which have been restrained; (iii) the historical sales for the Defendants’ listings that are alleged to infringe plaintiff’s trademarks, copyrights and patent; and (iv) the true identities along with complete contact information including email addresses of all Defendants.

The funds restrained by this Preliminary Injunction shall not be transferred or surrendered by any Defendant, financial institution, payment processor, bank, escrow service, money transmitter, or marketplace website, including but not limited to, AliExpress, Ant Financial Services, Alipay, Amazon, Dunhuang Group which operates the DHgate.com and DHpay.com platforms, Camel FinTech Inc, ContextLogic, PayPal, eBay, Payoneer, NewEgg WorldFirst, PingPong, Joom, Stripe, and their related companies and affiliates for any purpose (other than pursuant to a chargeback made pursuant to their security interest in the funds) without the express authorization of this Court.

No Defendant whose funds are restrained by this Preliminary Injunction may transfer said funds in possession of any financial institution, payment processor, bank, escrow service, money transmitter, or marketplace website, including but not limited to, AliExpress, Ant Financial Services, Alipay, Amazon, Dunhuang Group which operates the DHgate.com and DHpay.com platforms, Camel FinTech Inc, ContextLogic, PayPal, eBay, Payoneer, NewEgg WorldFirst, PingPong, Joom, Stripe, and their related companies and affiliates restrained by this Order to any other financial institution, payment processor, bank, escrow service, money transmitter or marketplace website without the express authorization of this Court.

Any Defendant or financial institution account holder subject to this Preliminary Injunction may petition the Court to modify the asset restraint set out in this Order.

This Order shall apply only to the Seller IDs listed on Schedule A hereto, associated e-commerce stores and websites, and any other seller identification names, e-commerce stores, websites, or financial accounts which are being used by Defendants for the purpose of counterfeiting the SECRET XPRESS CONTROL Mark and/or unfairly competing with plaintiff.

This Preliminary Injunction shall remain in effect during the pendency of this case and until further Order of the Court. Any Defendants that are subject to this Order may appear and move to dissolve or modify the Preliminary Injunction upon notice to plaintiff pursuant to the Federal Rules of Civil Procedure and Local Rules of the Southern District of Florida.

Case No. 21-cv-23025-BLOOM/Otazo-Reyes BOND 13. The Court determines that the bond in the amount of Ten Thousand Dollars and Zero Cents ($10,000.00) posted by Plaintiff as evidenced by the Notice of Filing Bond, ECF No. [24], is sufficient and shall remain with the Court until a final disposition or until this Preliminary Injunction is dissolved or terminated.

DONE AND ORDERED in Chambers at Miami, Florida, on September 21, 2021.

BETH BLOOM UNITED STATES DISTRICT JUDGE Copies to: Counsel of Record SCHEDULE A TO ORDER GRANTING PRELIMINARY INJUNCTION Doe # Marketplace Merchant Name Merchant ID Shenzhen Shifei Kou Biological Alibaba Technology Co., Ltd. aliverofficial Shenzhen Oner Technology Co., Alibaba Limited ameizii Alibaba Guangzhou BJY Technology Co., Ltd. bjy Hangzhou Shibode Technology Co., Alibaba Ltd. bloomcosmetics Alibaba Zhejiang Chloven Cosmetics Co., Ltd. chloven Zhengzhou Zhengdong New District Alibaba Youke Convenience Firm cn1536370828nhik Alibaba Foshan Duoyilai Trading Co., Ltd. cndyl Alibaba Shenzhen Tong Fei Trade Co., Ltd. cntongfei Guangzhou Cong Mei Biotechnology Alibaba Co., Ltd. congmei Guizhou Cool Cat Technology Co., Alibaba Ltd. coolcattech Hebei Changshan Hyaluronic Biotech Alibaba Co., Ltd. csbio Alibaba Foshan Duoyilai Trading Co., Ltd. duoyilai Foshan Dream Fashion Trading Alibaba Company Limited fashionbeauty Alibaba Shenzhen Qiaonvhai Trading Co., Ltd. fetzorrostore Guangzhou Sanbanfu Biotechnology Alibaba Co., Ltd. fiior Foshan Rose Charming Trading Co., Alibaba Ltd. fsyzqianying Shenzhen Gomore E-Commerce Co., Alibaba Ltd. gogomore Guangzhou Mingyuan Trading Co., Alibaba Ltd. gzmybeauty Guangzhou Shangqiao International Alibaba Trade Co., Ltd. gzqlzhanfu Shenzhen Beautou Technology Alibaba Development Co., Ltd. gzskinbeauty Guangdong Haoyang Biotechnology Alibaba Co., Ltd. haoyang999 Shenzhen Hengqing Biotechnology Alibaba Co., Ltd. hengqing0755 Shenzhen Hengyi Technology Co., Alibaba Ltd. hengyeetech Shenzhen Hengrui Fangzun Trading Alibaba Co., Ltd. hrfz728 Shenzhen Hengyi Technology Co., Alibaba Ltd. huanyatech Guangzhou Huapan Cosmetics Co., Alibaba Ltd. huapan Alibaba Guangzhou Yingli Cosmetic Ltd., Co. imagebeauty Alibaba Shenzhen Ipro Lifestyle Co., Ltd. iprogroup Guangzhou Hoonni Bio Technology Alibaba Co., Ltd. iwaterboy Alibaba Dongguan Gioriun Industry Co., Ltd. jrhandle Guangzhou Lianbiquan Biological Alibaba Technology Co., Ltd. lanthomewholesale Guangzhou Liaoyuan International Alibaba Trade Co., Ltd. lybeauty Alibaba Market Union Co., Ltd. marketunion04 Meecii International Cosmetic Alibaba (Shenzhen) Co., Ltd. meecii Shenzhen Meinuo Fortune Technology Alibaba Co., Ltd. meinuoxu Alibaba Wenzhou Meters Int'l Trade Co., Ltd. meters Guangzhou Mingsong Technology Alibaba Co., Ltd. mingsong Guangzhou Meizhiao Cosmetics Alibaba Company Ltd. mza Guangzhou Meizi Biological Alibaba Technology Co., Ltd. mzel Shanxi Nanxuelei Biological Alibaba Technology Co., Ltd. nanxuelei Linyi Njian Intelligent Technology Alibaba Co., Ltd. njian Guangzhou Fan Yue Pan Trading Co., Alibaba Ltd. pansly Alibaba Yiwu Paroo Cos Commodity Co., Ltd. pronail Alibaba Zhejiang Pure Cosmetics Co., Ltd. purecosmo Guangzhou Shangqiao International Alibaba Trade Co., Ltd. qlzhanfu Quanzhou Shanying Import And Alibaba Export Trade Co., Ltd. qzshanying Alibaba Shenzhen Raiposa Cosmetic Co., Ltd. raiposa Alibaba Shenzhen Rvtop Technology Co., Ltd. rvtop Guangzhou Shangqiao International Alibaba Trade Co., Ltd. shangqiao Alibaba Xiamen Sunbeam Industries Ltd. sunbeamxm Alibaba Shanxi Meila Bio-Tech Co., Ltd. sxmeila Shenzhen Century Jinchen Technology Alibaba Co., Ltd. szjinchen Alibaba Shenzhen Tong Fei Trading Co., Ltd. sztongfei Nanjing Tongliao E-Commerce Co., Alibaba Ltd. tliaoshop Alibaba Shenzhen Manxin Trading Co., Ltd. toyoepin Hunan Rongchuang Zhiyuan Network Alibaba Technology Co., Ltd. vanelc Alibaba Shantou Mingfang Cosmetics Co., Ltd. vibely Shenzhen Focalvalue Technology Co., Alibaba Ltd. vizgiz Alibaba Shantou Xuedai Cosmetics Co., Ltd. xuedai Alibaba Guangzhou Yimei Cosmetics Co., Ltd. yimei001 Alibaba Yiwu Yohe E-Commerce Firm yohe9 Shenzhen Ziyoumei Technology Co., Alibaba Ltd. ziyoumei Alibaba Zhejiang Unice Biotechnology Co. ,ltd. zjunice Aliexpress Shanghai YY Co. 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