Beijing Daddy's Choice Science and Technology Co., Ltd. v. Pinduoduo Inc.

CourtDistrict Court, S.D. New York
DecidedFebruary 13, 2020
Docket1:18-cv-06504
StatusUnknown

This text of Beijing Daddy's Choice Science and Technology Co., Ltd. v. Pinduoduo Inc. (Beijing Daddy's Choice Science and Technology Co., Ltd. v. Pinduoduo Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beijing Daddy's Choice Science and Technology Co., Ltd. v. Pinduoduo Inc., (S.D.N.Y. 2020).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ---------------------------------------X

BEIJING DADDY’S CHOICE SCIENCE AND TECHNOLOGY CO., LTD., MEMORANDUM AND ORDER Plaintiff, 18 Civ. 6504 (NRB) - against -

PINDUODUO INC., et al.,

Defendants. ---------------------------------------X NAOMI REICE BUCHWALD UNITED STATES DISTRICT JUDGE

Plaintiff Beijing Daddy’s Choice Science and Technology Co., Ltd. brought this case against Pinduoduo Inc. and affiliated companies (collectively, “PDD”) for contributory infringement and unfair competition under the Lanham Act and New York law. After this Court granted PDD’s motion to dismiss on personal jurisdiction grounds, see ECF No. 55, PDD moved, pursuant to Section 35(a) of the Lanham Act, 15 U.S.C. § 1117(a), for $540,620.11 in attorneys’ fees and costs, see ECF No 56.1 For the reasons discussed herein, the Court has no hesitancy concluding that this is an “exceptional case” under the Lanham Act

1 The $540,620.11 figure reflects: (1) $514,782.90 in fees for 654.9 hours billed by four attorneys and one legal assistant; and (2) $25,837.21 in costs, which includes $19,619.81 in legal research fees, $460.00 in word processing fees, and $5,757.40 for translation services. The $540,620.11 figure excludes $31,356.90 in fees and costs incurred by individuals at Skadden who billed fewer than 40 hours to the matter, as well as fees incurred in connection with the instant motion. See ECF No. 57 at 8; ECF No. 58 ¶ 6. and that a fee award is warranted. 15 U.S.C. § 1117(a). As detailed below, the Court finds that PDD is entitled to fees and costs in the amount of $386,185.24.

I. Background Plaintiff is a Chinese infant and baby care brand that sells its products, including its “Daddy’s Choice” brand diapers, throughout the People’s Republic of China and the United States. Defendant PDD is a Chinese e-commerce platform that integrates Chinese social media networks to connect Chinese merchants with

Chinese consumers. Third party merchants utilize the platform, which can be accessed through PDD’s website and mobile application, to sell products. While PDD derives revenue from the third party sales that the platform facilitates, sales and order fulfilments are handled directly and exclusively by the third party merchants. As detailed at length in the Court’s August 6, 2019 Opinion granting PDD’s motion to dismiss,2 multiple PDD platform features reflect that, at all times relevant to this proceeding, the platform was designed to target consumers and merchants in China, and not, as plaintiff maintains, Chinese-American consumers in the

2 The Court assumes familiarity with that Opinion and recites here only the facts and history most relevant to the instant motion. See Beijing Daddy’s Choice Sci. & Tech. Co. v. Pinduoduo Inc., No. 18 Civ. 6504 (NRB), 2019 WL 3564574 (S.D.N.Y. Aug. 6, 2019). United States.3 Indeed, utilizing the Pinduoduo mobile app to effectuate a delivery to New York required a willingness on the part of plaintiff’s agent not only to pay an exorbitant

international shipping fee for a product that was readily available for shipment from within the United States,4 but also the deliberate inclusion of fake Chinese shipping address and cell phone information into a template that, by all appearances, was designed to facilitate shipments solely within China. Further still, it was only after engaging fifteen merchants who could not be cajoled into making a transcontinental shipment of diapers that plaintiff’s agent (“Wang”) ultimately convinced a single merchant (“Royal”) to make one such shipment to Wang’s home in Smithtown, New York. That shipment required Royal to knowingly utilize false tracking and cell phone information and, among other logistical hurdles, to arrange fake transactions that would account for Wang’s

payment of shipping fees, thereby circumventing the platform’s all-inclusive pricing system and violating its Terms of Use.5

3 Among other things, the platform is presented exclusively in Mandarin, lists prices solely in Chinese currency, and –- perhaps most problematically for plaintiff’s theory that the platform targets Chinese-American consumers in the United States -- requires consumers to select a Chinese province, city, and district from a drop-down menu in order to effectuate a shipment. 4 As plaintiff acknowledged in its opposition to PDD’s motion to dismiss the amended complaint, “Daddy’s Choice diapers are authorized for sale in the U.S. on the Yamibuy website, which is dedicated to providing Asian goods to U.S. consumers.” ECF No. 49 at 7. 5 PDD’s Terms of Use require, for example, that merchants list all- inclusive product prices (i.e., prices that include shipping fees), which only makes commercial sense for the merchants if all products are meant to be shipped domestically (i.e., within China). See ECF No. 44 ¶ 24. Perhaps not surprisingly given the confluence of unlikely circumstances that were required to secure a shipment of authentic6 “Daddy’s Choice” brand diapers to the United States (including,

but not limited to, deliberate circumvention of the platform by both parties to the transaction), Royal’s sale to plaintiff’s agent was the only sale to a U.S. consumer that was alleged in the operative complaint. To be sure, the sale to plaintiff’s agent provided the genesis for this proceeding notwithstanding that it was effectuated under wholly contrived circumstances that -– far from reflecting PDD’s intent to target Chinese-Americans in New York (or any other U.S. forum) -- revealed effective efforts to limit PDD’s facilitation of deliveries to U.S. consumers. A. Procedural History Plaintiff filed the initial complaint in this case on July

19, 2018, alleging that certain “John Doe” sellers were using the platform to sell counterfeit or unauthorized goods to consumers in the United States. In response to the initial complaint, PDD filed a pre-motion letter in connection with an anticipated motion to dismiss, noting, among other things, that the initial complaint “d[id] not allege even a single sale on the Platform of any product

6 Notably, the diapers that were shipped to plaintiff’s agent as a result of the manufactured transaction, while unauthorized (i.e., intended for sale in China and not the United States), were authentic “Daddy’s Choice” products. Accordingly, plaintiff’s continued allegations regarding the sale of counterfeit goods to the United States were, if anything, undermined by the shipment secured through plaintiff’s elaborate investigation. -— let alone unauthorized ‘Daddy’s Choice’ products giving rise to the causes of action in the Complaint —- to a consumer in the United States.” ECF No. 27 at 2 (emphasis in original). In its

November 2, 2018 Order granting PDD leave to file the requested motion, the Court sua sponte granted plaintiff leave to amend the initial complaint if, consistent with Rule 11, plaintiff could assert additional allegations to cure any of the claimed deficiencies identified in PDD’s letter. See ECF No. 29. The Court specifically advised the parties that “it would be in the best interest of both the parties and the Court for the plaintiff to assert [any additional allegations] now, prior to any briefing on the proposed motion.” ECF No. 29. Plaintiff thereafter filed an amended complaint that specifically referenced Royal’s sale of allegedly unauthorized products “to a consumer located in New York.” ECF No. 30 ¶ 120.

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Beijing Daddy's Choice Science and Technology Co., Ltd. v. Pinduoduo Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/beijing-daddys-choice-science-and-technology-co-ltd-v-pinduoduo-inc-nysd-2020.