Peng v. The Partnerships and Unincorporated Associations Identified on Schedule "A"

CourtDistrict Court, N.D. Illinois
DecidedSeptember 14, 2021
Docket1:21-cv-01344
StatusUnknown

This text of Peng v. The Partnerships and Unincorporated Associations Identified on Schedule "A" (Peng v. The Partnerships and Unincorporated Associations Identified on Schedule "A") is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peng v. The Partnerships and Unincorporated Associations Identified on Schedule "A", (N.D. Ill. 2021).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

JUNJIE PENG, ) ) Plaintiff, ) Case No. 21-cv-1344 ) v. ) Judge Robert M. Dow, Jr. ) THE PARTNERSHIPS and ) UNINCORPORATED ASSOCIATIONS ) IDENTIFIED ON SCHEDULE A, ) ) Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiff Junjie Peng (“Plaintiff”) brings suit against certain partnerships and unincorporated associations, listed on Schedule A to the complaint, for patent infringement in violation of 35 U.S.C. § 271. See [1] (complaint); [4-2] (sealed Schedule A). On March 29, 2021, the Court granted Plaintiff’s motion for a temporary restraining order (“TRO”). See [15]. The Court later extended the TRO to April 26, 2021. See [21]. The TRO restrained all defendants named in Schedule A from selling or offering for sale products that infringe Plaintiff’s patents and froze defendants’ accounts in U.S.-based financial institutions. Plaintiff subsequently filed a motion requesting that the Court convert the TRO to a preliminary injunction. See [25]. Defendants Techplus Direct, Winonly Direct, Hanpure Inc., and SP Health (“Defendants”) opposed the preliminary injunction. The other defendants named in Schedule A failed to respond to the motion; therefore, the Court entered a preliminary injunction against those defendants, see [33], and gave Defendants time to respond to Plaintiff’s motion. See [38], [50]. The motion for preliminary injunction is now fully briefed. For the reasons explained below, Plaintiff’s motion for a preliminary injunction [25] is granted as to Defendants. The Preliminary Injunction Order entered by the Court on April 30, 2021 [33] is extended to cover Defendants. This case is set for telephonic status hearing on September 24, 2021 at 9:00 a.m. An initial joint status report is due September 21, 2021 (for more information, see the Court’s webpage concerning “Initial Status Reports and Conferences,” https://www.ilnd.uscourts.gov/judge-info.aspx?YcR9etkCy90= ). At the status hearing, the Court and parties will discuss, among other things, the extent of the asset

freeze order and whether it should be modified. I. Background The following facts are drawn primarily from the complaint [1]. Plaintiff is a citizen and resident of China and the inventor and owner of U.S. Design Patent No. D870,062 (the “‘062 Patent” or “Patent”) titled “Wireless Sports Headband.” This product is a headband with built-in wireless Bluetooth speakers. Plaintiff offers this product for sale via online retailers such as Amazon.com. According to the complaint, Plaintiff has established his products as the first to market and has an established reputation and quality reviews. Defendants are businesses that, on information and belief, reside in the People’s Republic

of China. However, the complaint alleges, “[t]actics used by Defendants to conceal their identities and the full scope of their operation make it virtually impossible for Plaintiff to learn Defendants’ true identities and the exact interworking of their network.” [1] at 4. Defendants conduct business throughout the United States, including within this judicial district, via fully interactive, commercial online marketplaces. On information and belief, Defendants have sold and continue to sell to consumers within the United States, including in this district, products that infringe on Plaintiff’s ‘062 patent (“Infringing Products”). Plaintiff has not granted Defendants a license or other permission to use the patented design. Plaintiff alleges on information and belief that “Defendants are an interrelated group of infringers working in active concert to knowingly and willfully make, use, offer for sale, sell, and/or import into the United States for subsequent sale or use products that infringe directly and/or indirectly the ’062 Patent.” [1] at 4. Plaintiff bases this belief on the fact that Defendants all sell and/or offer for sale on Internet stores “the same infringing products with minor variations as well

as similar if not identical product images and descriptions,” the same “accepted payment methods, check-out methods, meta data, illegitimate SEO tactics, lack of contact information, identically or similarly priced items and volume sales discounts, the same incorrect grammar and misspellings, [and] similar hosting services.” Id. at 4-5. The complaint further alleges that “infringers such as Defendants typically operate multiple credit card merchant accounts and PayPal accounts behind layers of payment gateways so that they can continue operation in spite of Plaintiff’s enforcement efforts, such as take down notices.” Id. at 5. Also, on information and belief, “Defendants maintain off-shore bank accounts and regularly move funds from their PayPal accounts or other financial accounts to off-shore bank accounts outside the jurisdiction of this Court.” Id. According

to the complaint, Defendants’ infringement of the ‘062 Patent has been willful and their sale of Infringing Products is irreparably harming Plaintiff. The complaint contains one count, for patent infringement in violation of 35 U.S.C. § 271. Plaintiff seeks an injunction, damages adequate to compensate for Defendants’ infringement, and Defendants’ profits. II. Legal Standard A court’s determination of whether to issue a preliminary injunction involves a two-step inquiry, with a threshold phase and a balancing phase. See Cassell v. Snyders, 990 F.3d 539, 544- 45 (7th Cir. 2021). In the threshold phase, the party seeking a preliminary injunction must demonstrate: ‘(1) some likelihood of succeeding on the merits, and (2) that it has ‘no adequate remedy at law’ and will suffer ‘irreparable harm’ if preliminary relief is denied.’” Id. (quoting Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 11 (7th Cir. 1992)). If the movant successfully makes the required threshold showing, the Court proceeds to the “balancing phase,” where it considers: “‘(3) the irreparable harm the non-moving party will suffer if preliminary relief is

granted, balancing that harm against the irreparable harm to the moving party if relief is denied; and (4) the public interest, meaning the consequences of granting or denying the injunction to non- parties.’” Id. at 545 (quoting Abbott Labs., 971 F.2d at 11). The Court “employs a sliding scale approach” to the balancing analysis; “[t]he more likely the plaintiff is to win, the less heavily need the balance of harms weigh in his favor; the less likely he is to win, the more need it weigh in his favor.” Valencia v. City of Springfield, 883 F.3d 959, 966 (7th Cir. 2018) (internal quotations marks and citation omitted). “Ultimately, the moving party bears the burden of showing that a preliminary injunction is warranted.” Courthouse News Service v. Brown, 908 F.3d 1063, 1068 (7th Cir. 2018).

III. Analysis A. Irreparable Harm to Plaintiff and Inadequacy of Legal Remedies As an initial matter, the parties dispute whether Plaintiff should enjoy a rebuttable presumption of irreparable harm if he establishes a likelihood of success on the merits. However, the Supreme Court’s decision in eBay, Inc. v. MercExchange, LLLC, 547 U.S. 388 (2006), “jettisoned the presumption of irreparable harm as it applies to determining the appropriateness of injunctive relief” in cases of patent infringement. Robert Bosch LLC v. Pylon Mfg.

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Peng v. The Partnerships and Unincorporated Associations Identified on Schedule "A", Counsel Stack Legal Research, https://law.counselstack.com/opinion/peng-v-the-partnerships-and-unincorporated-associations-identified-on-ilnd-2021.