Approximately 80% of Schedule A Defendant (“SAD”) counterfeiting suits are brought in the Northern District of Illinois. The name refers to the captioned name of the defendants – usually “The Partnerships and Unincorporated Associations Identified on Schedule A.”

SAD litigations have been a topic of controversy in recent years. Plaintiffs may make aggressive assertions as to service of process, joinder, and the use of urgent relief regarding freezing defendants’ assets – which claims often go unchallenged in default scenarios. This creates an opportunity for a plaintiff to freeze and seize a lot of ill-gotten gains in one lawsuit. The Northern District of Illinois had, until recently at least, been accommodating to these suits – giving rise to the meme: The Northern District of Illinois vs. The Internet.

Over the past few weeks a judge in the ND Ill, Judge John Kness, has issued an order staying all of his pending SAD suits ( 14 to my count). The Judge will “reassess” his view on these suits (however it is unclear to what extent the Judge will conduct any sort of fact-finding or briefing in this regard).

The order(which appears to be identical in all 14 suits) provides a handy bullet point list spot-lighting the procedural questions raised by these suits:

“MINUTE entry before the Honorable John F. Kness: On the Court’s initiative, all pending motions are held in abeyance, and the case is stayed pending further order. This stay, which the Court is entering in other so-called “Schedule A” cases on its docket where requests for temporary restraining orders remain pending, is intended to permit the Court the opportunity to reassess its previous approach in Schedule A litigation involving Lanham Act, Copyright Act, and Patent Act claims typically brought on an ex parte basis against various online merchants.

This reassessment will consider, among other things, whether:

(1) ex parte proceedings are appropriate in these types of cases;

(2) the routine sealing of parts or all of the docket is appropriate;

(3) the routine granting of temporary restraining orders on an ex parte basis is a sound exercise of judicial discretion;

(4) the routine granting of prejudgment asset restraints is a sound exercise of judicial discretion; and

(5) the mass joinder of defendants is appropriate under the circumstances typically present in Schedule A cases.

Plaintiff remains free, of course, to dismiss this action voluntarily if they wish to pursue their claims in another District, but no supplemental briefing on the pending motions may be filed absent advance leave of Court.” (emphasis and formatting added)

The following SAD cases on Judge Kness’ docket appear to be stayed at this time:

Warner Bros. Entertainment Inc. v. The Partnerships And Unincorporated Associations Identified On Schedule A, N.D.Ill. 1:25-cv-06252

Universal City Studios LLC v. The Partnerships and Unincorporated Associations Identified on Schedule A N.D.Ill. 1:25-cv-05473

Garyck Truls Arntzen v. The Partnerships and Unincorporated Associations Identified on Schedule A N.D.Ill. 1:25-cv-05397

Toyota Motor Sales, U.S.A., Inc. v. The Partnerships and Unincorporated Associations Identified on Schedule A N.D.Ill. 1:25-cv-05874

Hong Kong Leyuzhen Technology Co. Limited v. yifang N.D.Ill. 1:25-cv-03183

GJL Holding Company LLC v. The Partnerships and Unincorporated Associations Identified on Schedule A N.D.Ill. 1:25-cv-04726

Jessica Rose Hanselmann v. The Partnerships and Unincorporated Associations Identified on Schedule A N.D.Ill. 1:25-cv-04639

Judge Kness entered a stay, and plaintiffs withdrew their litigation without prejudice in:

Fendi S.R.L. v. The Partnerships and Unincorporated Associations Identified on Schedule A et al N.D.Ill. 1:25-cv-04859

Milwaukee Electric Tool Corporation v. The Individuals, Corporations, Limited Liabiltiy (sic) Companies, Partnerships and Unincorporated Associations Identified on Schedule A Hereto N.D.Ill. 1:25-cv-01797

Spin Master Ltd. et al v. The Partnerships and Unincorporated Associations Identified on Schedule A N.D.Ill. 1:25-cv-03605

Spin Master Ltd. et al v. The Partnerships and Unincorporated Associations Identified on Schedule A N.D.Ill. 1:25-cv-03442

Pit Viper, LLC v. The Partnerships and Unincorporated Associations Identified on Schedule A N.D.Ill. 1:25-cv-04516

Christian Dior Couture, S.A. v. The Partnerships and Unincorporated Associations Identified on Schedule A N.D.Ill. 1:25-cv-04096

Nike, Inc. v. The Partnerships and Unincorporated Associations Identified on Schedule A N.D.Ill. 1:25-cv-04318

Prior press coverage on the growing resistance to SAD litgation reported here.

SHEIN and TEMU are Chinese online retail platforms known for selling a wide range of consumer goods like clothing, accessories, and home products at low prices.

The de minimis tariff exception refers to a rule that allows small-value imports to enter a country without being subject to customs duties and taxes. In the United States, for example, the de minimis value threshold is currently set at $800. This means that most goods imported into the U.S. with a value of $800 or less per shipment are exempt from duties and taxes.

The exemption with regard to China was suspended on Feb. 5., and then reinstated on Feb. 7. It is unclear what the status of the exemption is at this time.

This tariff exemption rule is designed to streamline customs procedures and reduce costs for both governments and businesses or consumers, as it simplifies the process for small, low-value shipments.

U.S. Customs (“CBP”) stated in October of last year that 92% of all cargo entering the U.S. were in de minimis shipments. JFK Airport receives up to 1 million de minimis shipments a day.

Meta reported in 2024 that Chinese advertisers accounted for 10% of its revenue. Temu reportedly spends the most ads on Facebook while Shein spends a significant amount as well.

Temu was one of the largest spenders during the 2024 Super Bowl.

On Feb. 5, CBP issued an order suspending the de minimis exception on goods from China.

On Feb. 7, the president paused the suspension.

Congress and the Biden Administration had previously contemplated suspending the tariff exemption.

Kash Patel, nominee to head the FBI, received $1 Million and $5 Million in restricted stock from the parent company of Shein, for consulting services. Shein intends to go public on the London Stock Exchange.

Discussion of issues relating to the de minimis exception here.

Previous efforts to oppose Shein discussed here.

Trader Joe’s alleges that Defendant Joes Wine Inc. d/b/a/Joe’s Wine Shop and Joe’s Wine Co. (“Defendant”) has infringed and diluted the Trader Joe’s Trademarks and Trader Joe’s Trade Dress by using, inter alia, the name “Joe’s Wine Co.”, circle-shaped logos, wood paneling, cedar planks on the walls, tropical/floral designs, handmade signs, red lettering on signage, and old-fashioned illustrations in connection with the displays, advertising, and promotion of Defendant’s wine shop at 113 3rd Ave, New York, NY 10003 (the “Wine Shop”).”

Plaintiff defines the non-textual elements of its trade dress in paragraph 30 of its complaint:

Rather than adopt an ordinary décor common to many supermarkets, Trader Joe’s has chosen to adopt a distinctive décor featuring a combination of elements, including, inter alia, cedar planks on the walls, hand-drawn and hand-painted signs and murals, and tropical and floral elements evocative of the South Pacific. Trader Joe’s also frequently uses imagery and iconography evocative of the late 1800s and early 1900s in its hundreds of stores, in the Fearless Flyer and other marketing materials, and on its website, including images of food and beverages in the style of decades-old lithographs or woodcut art. These distinctive design elements are referred to collectively as the “Trader Joe’s Trade Dress.”

Images from the Complaint:

Link to full text of Trader Joes v Joes Wine Shop complaint here.

From the Prelim Order:

Defendant is enjoined from:

(a) using the name “Joe” . . . ;

(b) using the term “Trader . . .;

(c) using any circle-shaped logos . . . ;

(d) using any red-colored lettering and logo elements . . .

(e) using any wood paneling, cedar planks, tropical/floral designs, handmade signs, old-fashioned illustrations, or other images evocative of the Trader Joe’s Trade Dress.

. . . Notwithstanding the above, Defendant may use the name “Joseph’s Wine Co.” and hardwood-colored flooring and countertops in connection with the operation, advertising, or promotion of the Wine Shop

Link to full text of Preliminary Injunction Order in Trader Joe’s v Joe’s Wine Shop here.

Link to PDF of Ceramtec decision

Google NotebookLM summary:

This document is a court opinion from the United States Court of Appeals for the Federal Circuit in the case of CeramTec GMBH v. COORSTEK BIOCERAMICS LLC, decided on January 3, 2024. The appeal originated from a decision of the United States Trademark Trial and Appeal Board (the Board) which canceled CeramTec’s trademarks protecting the pink color of their ceramic hip components2. The court ultimately affirmed the Board’s decision.

The case revolves around the functionality of the pink color in CeramTec’s hip components. CeramTec argued that the pink color was a distinctive trademark, while Coorstek, a competitor, contended that the pink color resulted from the addition of chromia, which was functional to the component.

The Board found in favor of Coorstek, concluding that the pink color was functional based on several factors, including:

●

CeramTec’s own patents and public communications, which disclosed the functional benefits of adding chromia to the ceramic material5.

●

The lack of evidence regarding whether different colored hip components would have equivalent mechanical properties to Biolox Delta.

●

Conflicting evidence regarding whether the addition of chromia decreased the cost of manufacturing the hip components.

The court agreed with the Board, finding substantial evidence to support its decision7. The court also addressed CeramTec’s argument that Coorstek should be barred from claiming the pink color was functional due to their previous statements that chromia provided no material benefit, an argument rooted in the doctrine of unclean hands8. The court stated that while the Board erred in suggesting that the unclean hands defense was categorically unavailable in functionality proceedings, the error was harmless in this case.

Toyota Motor Sales v The Partnerships etc. on Schedule A, 24-cv-09401 (Nov 18, 2024 Daniel, J.)

The Northern District of Illinois is done with the “Anything Goes” phase of multi-defendant trademark litigation and has entered a new rules-based phase of Schedule A Defendant litigation. Here, a (recently appointed) ND Ill. judge dismissed a SAD case (without prejudice), sua sponte, for lack of joinder. To be clear on two points: (1) I’m troubled by the dicta in this case, not the holding; and (2) my hoodlum friends discussed below went on to law-abiding careers.

The court begins:

“The plaintiff seeks to join 103 defendants in this infringement action. Concerned that joinder was not proper, the Court directed the plaintiff to file a supplemental memorandum addressing the propriety of joinder. Having considered the plaintiff’s arguments, the Court finds that joinder is not proper and dismisses the complaint without prejudice.“

Here are the arguments that the court did not find persuasive with regard to joinder:

“According to the plaintiff, joinder is proper because:

(1) it allows the plaintiff to combat the unique problem of offshore Internet-based counterfeiters who exploit the anonymity and mass reach afforded by the Internet;

(2) the defendants all fit the same profile, working in a similar manner and during the same time period to sell counterfeit products as part of the same occurrence or series of occurrences;

(3) district courts have broad discretion to evaluate joinder as the case progresses, so they should just allow joinder and adjust as needed;

(4) some counterfeiters coordinate actions to evade detection and liability, so district courts should infer that all counterfeiters, including the defendants named here, coordinate actions to evade detection and liability;

(5) some counterfeiters use the same wording in product descriptions, so district courts should infer that the use of the same wording means that all of the defendants are in league with each other; and

(6) some Seller Aliases may have common ownership, so district courts should allow joinder because the plaintiff does not have access to the information necessary to show common ownership at this time. “

Now here’s a passage by Judge Daniel that brought back memories of a misspent youth:

I went to a concert a few weeks ago. When I got off the train, a vendor was selling what I suspected to be counterfeit t-shirts bearing the performer’s likeness. As I continued toward the venue, I encountered a second vendor selling some of the same t-shirt designs as the first vendor. As I crossed the venue’s parking lot, a third counterfeiter offered some of the same t-shirt designs for sale as the first two. These three vendors had the same profile. They sold the same merchandise. They used the same tactics to try to get my attention. Two of them even offered similar deals (“two for $30”). One could even argue that they “swarmed” the concert venue that evening. But that does not establish a “logical relationship” between them. Had I purchased a t-shirt from all three, only to have each fall apart after the first wash, it would not establish a series of transactions or occurrences allowing me to join them in a single lawsuit. That is, unless I had some link connecting them. To further illustrate this point, assume I am a super fan and decided to follow the performer to Los Angeles, California, where I encountered similar vendors selling the same t-shirts as I approached the venue. Even if the t-shirts came from the same factory, and even if the unauthorized vendors employed the same hustle, I would have a hard time establishing a connection between a vendor in Chicago and a vendor in Los Angeles—even though they fit a particular profile.

To borrow from the “hub-and-spoke conspiracy” context, there needs to be a “rim” connecting the various defendants. See, e.g., Marion Healthcare, LLC v. Becton Dickinson & Co., 952 F.3d 832, 842 (7th Cir. 2020)(describing a hub-and-spoke conspiracy). A rim would allow one to treat all of the transactions or occurrences as a series, or to hold defendants jointly and severally liable. Having similar profiles, however, says nothing about the relationship between the various transactions or occurrences that give rise to the plaintiff’s claims and does not make defendants jointly and severally liable. As the plaintiff concedes, not every defendant is working with other defendants. That means that the transactions or occurrences are not linked.

I’m not sure I totally agree with the bit about the “same factory.” In college, my hoodlum buddies, Sharit and Sitver (not Sharit’s and Sitver’s real names), would buy the same unauthorized event t-shirts from the same guy (known only as Joey). These unauthorized shirts tended to be created for that artist’s particular tour. My friends would take their places on Eighth Avenue outside the Garden the night of the Jethro Tull concert (or whatever). They were competing with other but also tacitly agreeing to stay a certain distance away from each other and the other miscreants in Joey’s distribution network. Also, they would keep each other apprised of the level of law enforcement that evening (this was before cellphones, so they probably would just yell if the police approached). So, using the terminology in footnote 2 of the decision, some of these t-shirt hawkers had both a common purpose (selling shirts) and a common purpose (sell shirts in such a way that no one got arrested, and Joey get his hands on a new batch of shirts for the next concert).

I looked at the cited case’s definition of “hub and spokes” conspiracy which was:

This type of conspiracy requires a plaintiff to allege both that there was a central coordinating party (the “hub”), and that each participant (along the “rim”) recognized that it was part of the greater arrangement, and it coordinated or otherwise carried out its duties as part of the broader group. In other words, a “hub-and-spokes conspiracy” requires a “rim” connecting the various horizontal agreements.

Marion Healthcare, LLC v. Becton Dickinson & Co., 952 F.3d 832, 842 (7th Cir. 2020)

I think in my hoodlum friends hypo, in a case where the defendants are selling the identical infringing product, it doesn’t seem impossible to plead that there is a central coordinating party (the manufacturer) and that each participant is conscious that they are part of a broader group.

p.s. Read the court’s discussion of judicial economy, and that lack thereof in SAD litigation, last para on page 4.

Hague does not apply if the address remains unknown after diligent investigation:

XYZ CORP., Plaintiff,
v.
THE INDIVIDUALS, PARTNERSHIPS AND UNINCORPORATED ASSOCIATIONS IDENTIFIED IN SCHEDULE A, Defendants.

No. 24 Civ. 1962 (LGS).

United States District Court, S.D. New York.June 3, 2024.

EMAIL PERMITTED ?UNDER 4(f)(3):

AMAZON.COM, INC., et al., Plaintiffs,
v.
ARMYCAMO USA, INC., et al., Defendants.

Case No. C24-0394JLR

Ornua Foods North America v Abbey Specialty Foods LLC, 23-cv-1212 (JG:C) (SDNY September 30, 2024)

Straightforward likelihood of confusion analysis of butter trade dress from the Southern District of New York:

Plaintiff Kerrygold argues:

“Both packages use the same silver foil background and uncluttered design on a package with the same size, shape, profile, and weight . . . use similar centered text with stylized arched wording above one image element with trademark logos a similar Celtic-style font and a similar green color. ” Also, both trade dresses use similar wording and ‘indicate the butter product is made from grass fed cows.'”

Also, defendant was aware of Kerrygold (it is a direct competitor.

And these are other butter packages:

However – the Court was not buttered up. No likelihood of confusion:

The overall impressions of the Kerrygold and Tipperary trade dresses are unlikely to cause confusion among reasonably prudent purchasers. First, each trade dress prominently displays their respective brand name. The name “Kerrygold” assumes a significant portion of the Kerrygold Trade Dress and is placed in the center of the package. “Kerrygold” appears in a white font sitting in front of a shamrock green quadrangle. The contrast between the white font and green shading further accentuates and draws attention to the brand name. Likewise, the name “Tipperary” occupies a large portion of the Abbey Trade Dress. In fact, “Tipperary” appears in the largest font of any text on the package.. . .

Next, although both trade dresses utilize a Celtic-style font, each font is evidently distinct. The font on the Kerrygold Trade Dress is a clean, sans-serif font, whereas Abbey’s package uses a font with long serifs, providing a more antique and anachronistic look. Additionally, as stated above, the name “Kerrygold” is displayed in a white font with no border while “Tipperary” appears in gradating shades of green with a white border. “Tipperary” is also slightly arched while “Kerrygold” has no curve.

Third, the two packages also contain different phrases and otherwise arrange any similar phrases in different places. For instance, the top of the Tipperary package states, “IMPORTED FROM IRELAND.” No such statement appears on the Kerrygold Trade Dress. At the top of the Kerrygold package is a note that the butter contains “MILK FROM IRISH GRASS-FED COWS” accompanied by an ovular gold seal indicating the same. Abbey’s Trade Dress lacks any seal and indicates at the bottom of the package that its butter is “MADE WITH MILK FROM GRASS-FED COWS,” without noting the national origin of those cows. Furthermore, the focal point of each trade dress further dispels any possibility of confusion.

Brands: Interdisciplinary Perspectives

Branding has emerged as a cornerstone of marketing practice and corporate strategy. This book brings together a curated selection of the most influential and thought-provoking papers on brands and branding from Consumption Markets and Culture, reflecting the wide-ranging, interdisciplinary interest in the topic, accompanied by new introductions from leading brand scholars, including Giana Eckhardt, John F. Sherry, Jr., Sydney Levy, and Morris Holbrook.

https://www.schwimmerlegal.com/wp-content/uploads/sites/833/2024/09/Brands_Interdisciplinary_Perspectives.pdf

Branding: The Past, Present, and Future: A Study of the Evolution and Future of Branding

Abstract Branding, as any other concept, has evolved over time: from the days when sheep of o started to be branded to distinguish themfrom another herdto the current era when everything, from water and flowers to clothes and food, is branded. Throughout these there have been numerous theories to describe and understand the underlying nuance paper finds the relationships in previous literature and reveals how these theories see from various perspectives and how they can be integrated to form a coherent view. It i discussed how branding and society affect each other. Based on the knowledge branding theories have been developed as dependent variables of each other and the s we are able to form a better understanding of the past, the present, and the future of branding.

link to

https://www.schwimmerlegal.com/wp-content/uploads/sites/833/2024/09/Brands_Interdisciplinary_Perspectives.pdf