Shenzhen Root Technology Co Ltd v. Chiaro Technology Ltd

• Court: District Court, W.D. Washington
• Decided: May 17, 2023
• Docket: 2:23-cv-00631
• Status: Unknown

Opinion

1 2 3

4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 SHENZHEN ROOT TECHNOLOGY Co., CASE NO. 2:23-cv-00631-JHC 8 Ltd., ORDER DENYING TRO; GRANTING 9 Plaintiff, ORDER TO SHOW CAUSE 10 v. 11 CHIARO TECHNOLOGY Ltd.,

12 Defendant. 13

14 Before the Court is Plaintiff’s motion for a temporary restraining order (TRO) and for an 15 order to show cause as to why a preliminary injunction should not issue. Dkt. # 21 (sealed 16 motion); Dkt. # 17 (redacted motion). Defendant received notice of the motion and filed an 17 opposition brief. Dkt. # 28. 18 For the reasons below, the Court DENIES Plaintiff’s motion for a TRO but GRANTS 19 Plaintiff’s request for an order to show cause as to why a preliminary injunction should not issue. 20 The Court will set a preliminary-injunction briefing schedule and preliminary-injunction hearing 21 by separate order. The Court also DENIES Defendant’s Motion for Leave to File Surreply to 22 Plaintiff’s Supplemental Briefing Addressing the Jurisdictional Issue. See Dkt. # 42. Defendant 23 may further address the jurisdictional issue in the preliminary-injunction briefing. 24 1 I 2 BACKGROUND 3 Plaintiff sells breast pumps on the Amazon.com marketplace. Dkt. # 17 at 7. Among the

4 products it sells is its flagship “S12 Pro” breast pump. Id. 5 Defendant also sells maternal care products, including breast pumps, and directly 6 competes with Plaintiff. Id. Defendant is the owner of U.S. Patent No. 11,357,893 (“the ’893 7 Patent”). Id. at 11. 8 In June 2022, Defendant wrote to Plaintiff to state its view that certain of Plaintiff’s 9 breast pumps infringe the ’893 Patent. Id. at 17. Defendant requested that Plaintiff cease and 10 desist from making, using, importing, selling, or offering to sell those products. Id. Plaintiff 11 responded that its products do not infringe. Id. After the parties exchanged further 12 correspondence, Defendant asked Amazon to initiate an Amazon “APEX” proceeding based on

13 the ’893 Patent. Id. As described by Plaintiff, “[a]n APEX proceeding is an extrajudicial dispute 14 resolution process conducted before a neutral evaluator selected by Amazon who receives a fixed 15 fee of $4,000, which the losing party must pay.” Id. 16 Following briefing from the parties, the neutral evaluator in the APEX proceeding found 17 in favor of Defendant. Id. at 18. One day after the APEX decision—on April 25, 2023— 18 Amazon removed the S12 Pro products from its marketplace. Id. This “delisted” the products 19 and prevented Plaintiff from selling the products on Amazon. Id. 20 On April 28, 2023, Plaintiff filed this action, seeking (1) declaratory relief of non- 21 infringement and invalidity and (2) damages based on Defendant’s tortious interference with a 22 business expectancy. See Dkt. # 1. On May 9, 2023, Plaintiff filed a motion for a temporary

23 restraining order. See Dkt. # 22. The Court requested (Dkt. # 30) and received (Dkt. # 33) 24 supplemental briefing from Plaintiff on a jurisdictional issue. 1 II 2 LEGAL STANDARDS FOR TROS 3 When evaluating a request for a TRO, courts apply the same factors as used to evaluate a

4 request for a preliminary injunction. Stuhlbarg Int’l Sales Co. v. John D. Brush & Co., 240 F.3d 5 832, 839 n.7 (9th Cir. 2001). To obtain a TRO, a plaintiff must show that they are (1) likely to 6 succeed on the merits, (2) likely to suffer irreparable harm in the absence of preliminary relief, 7 (3) the balance of equities tips in their favor, and (4) an injunction is in the public interest. 8 Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009). The first two factors are the 9 most important. Nken v. Holder, 556 U.S. 418, 434 (2009). The Ninth Circuit applies a “sliding 10 scale” approach, in which a stronger showing as to one or more factors can outweigh weaker 11 showings as to other factors. See Recycle for Change v. City of Oakland, 856 F.3d 666, 669 (9th 12 Cir. 2017); All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011).

13 III 14 DISCUSSION 15 A. Jurisdiction 16 As a threshold matter, Defendant argues that the Court lacks jurisdiction. Dkt. # 28 at 17 14–16. According to Defendant, there is no “case or controversy” between it and the named 18 plaintiff in this case, “Shenzhen Root Technology Co., Ltd.” Id. Defendant says that an entity 19 bearing this name was not a party to the Amazon proceedings, listed on the “Momcozy” website, 20 or named in any correspondences between the parties. Id. Therefore, Defendant argues that the 21 Court lacks jurisdiction to issue a declaratory judgment (or equitable relief supporting such a 22 judgment) because there is no actual case or controversy between it and this plaintiff.

23 The Declaratory Judgment Act provides that “in a case of actual controversy,” a federal 24 court may “declare the rights and other legal relations of any interested party seeking such 1 declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). As the 2 Supreme Court has explained, an “actual controversy” exists when “the facts alleged, under all 3 the circumstances, show that there is a substantial controversy, between parties having adverse

4 legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory 5 judgment.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007) (quotation marks 6 omitted). In patent cases, a “controversy” requires an affirmative act by the patentee to enforce 7 their rights. See Asia Vital Components Co. v. Asetek Danmark A/S, 837 F.3d 1249, 1253 (Fed. 8 Cir. 2016). But it does not require that the patentee initiate legal proceedings; there only needs 9 to be a “definite and concrete patent dispute” between the parties. Danisco U.S. Inc. v. 10 Novozymes A/S, 744 F.3d 1325, 1330 (Fed. Cir. 2014); SanDisk Corp. v. STMicroelectronics, 11 Inc., 480 F.3d 1372, 1381 (Fed. Cir. 2007). 12 Defendant’s jurisdictional argument is based on a concern about the name of the plaintiff

13 in this litigation—that the named plaintiff is not the same named entity with which it had 14 interacted in the Amazon proceedings and in prior communications. But as Plaintiff explained in 15 its supplemental brief (Dkt. # 33), any jurisdictional confusion stems from the fact that Plaintiff 16 recently changed its English name. “Plaintiff changed its English name from ‘Shenzhen Root E- 17 Commerce Co., Ltd.’ to “Shenzhen Root Technology Co., Ltd.,’ and both names refer to the 18 same entity—Plaintiff.” Dkt. # 33 at 5. 19 Accordingly, at this stage, the Court is satisfied that it possesses jurisdiction: There 20 appears to be an actual controversy between Plaintiff and Defendant, even if Plaintiff has done 21 business under various English names. So long as the various names refer to the same corporate 22 entity, there does not seem to be a jurisdictional issue.1 23

1 As mentioned above, Defendant may address this issue again in the next round of briefing if it 24 wishes to rebut any arguments or evidence presented by Plaintiff. 1 B. Motion for a Temporary Restraining Order 2 Plaintiff moves for a TRO. Dkt. ## 17, 21. Plaintiff requests a TRO that compels 3 Defendant to “withdraw its infringement complaints to Amazon, including those related to the

4 APEX decision.” Dkt. # 17 at 7. Amazon has communicated to Plaintiff that it would 5 “reinstate” the delisted products upon issuance of a court order in Plaintiff’s favor, “whether a 6 TRO or an order finding non-infringement or invalidity.” Dkt. # 40-1. 7 The Court concludes that a TRO is not warranted at this juncture. The purpose of a TRO 8 is to preserve the status quo and prevent irreparable harm until the Court can consider the 9 appropriateness of a preliminary injunction. See Reno Air Racing Assoc., Inc. v. McCord, 452 10 F.3d 1126, 1131 (9th Cir. 2006); Jones v. H.S.B.C. (USA), 844 F. Supp. 2d 1099, 1100 (S.D. Cal. 11 2012) (“The underlying purpose of a TRO is to preserve the status quo and prevent irreparable 12 harm before a preliminary injunction hearing may be held.”); Arizona Recovery Hous. Ass’n v.

13 Arizona Dep’t of Health Servs., 462 F. Supp. 3d 990, 996 (D. Ariz. 2020) (“The purpose of a 14 preliminary injunction is to preserve the status quo and the rights of the parties until a final 15 judgment on the merits can be rendered, while the purpose of a [TRO] is to preserve the status 16 quo before a preliminary injunction hearing may be held.” (citation omitted) (alteration in 17 original)). 18 Plaintiff argues that without a TRO, it will suffer various forms of “irreparable harm.” 19 For example, Plaintiff asserts that the majority of its sales take place through the Amazon 20 marketplace; that sale of the S12 Pro products accounted for a sizable share of its revenue and 21 profits during the first quarter of 2023; that delisting its products will “significantly hinder” 22 financing opportunities; that delisting causes irreparable harm to the company’s reputation and

23 goodwill; and that the company may have to alter its workforce if its products are not quickly 24 1 relisted. Dkt. # 22 at 6, 9, 11; Dkt. # 17 at 19–21, 30–33. All told, Plaintiff says delisting 2 “threatens [the company’s] very existence.” Dkt. # 17 at 31. 3 The Court does not minimize these harms: Taking these statements as true, Plaintiff has

4 at least raised a question as to whether it will suffer irreparable harm in the future. But the Court 5 is not persuaded that these harms are so concrete and immediate that emergency relief in the form 6 of a TRO is justified. See Studio 010, Inc. v. Digital Cashflow LLC, No. 2:20-CV-01018-RAJ, 7 2020 WL 3605654, at *2–3 (W.D. Wash. July 2, 2020). Aside from ordinary lost-revenue 8 concerns (which could perhaps be compensable through money damages, see Rent–A–Center, 9 Inc. v. Canyon Television & Appliance Rental, Inc., 944 F.2d 597, 603 (9th Cir. 1991)), Plaintiff 10 has not demonstrated that the harms asserted are so immediate and irreparable that they will 11 occur in the period between this order and a future preliminary-injunction hearing. See Nat’l 12 Urb. League v. Ross, 484 F. Supp. 3d 802, 805 (N.D. Cal. 2020) (“Temporary restraining orders

13 ‘serv[e] the[ ] underlying purpose of preserving the status quo and preventing irreparable harm 14 just so long as is necessary to hold a hearing, and no longer.” (quoting Granny Goose Foods, Inc. 15 v. Bhd. of Teamsters & Auto Truck Drivers Local No. 70 of Alameda Cty., 415 U.S. 423, 439 16 (1974)); Jones, 844 F. Supp. 2d at 1100. Indeed, Plaintiff filed this motion two weeks after its 17 products were delisted, suggesting that the “imminence” of the harm alleged is not measured in 18 hours or days.2 See Studio 010, 2020 WL 3605654, at *2–3. And here, issuance of a TRO 19 would require Defendant to take affirmative action by withdrawing its infringement allegations 20 with Amazon. See Garcia v. Google, Inc., 786 F.3d 733, 740 (9th Cir. 2015). The Court prefers 21 to further evaluate these (and other) arguments at the preliminary-injunction stage, when the 22

23 2 Additionally, Plaintiff was apparently on notice that filing a lawsuit could “suspend” the APEX proceeding. See Dkt. ## 20-5 at 2, 28 at 25. But Plaintiff opted not to do so until after the APEX 24 proceeding produced an unfavorable result. 1 Court will have the benefit of a hearing and more thorough briefing. See Nat’l Urb. League, 484 2 F. Supp. 3d at 804 (“The issuance of a TRO is at the Court’s discretion.”). 3 This decision should not be read to imply that the action or Plaintiff’s motion is without

4 merit. To the contrary, based on its initial review of the ’893 Patent, the Court tentatively 5 believes that Plaintiff is likely to prevail on the merits. Claim 1 of the ’893 Patent requires a 6 “diaphragm holder that forms a recess or cavity at least in part with an external surface of the 7 housing.” ’893 Patent at 71:45–47. The accused product’s diaphragm holder does not appear to 8 “form” a “recess or cavity” with the “external surface of the housing.” Instead, it appears that 9 the accused product’s diaphragm holder is placed entirely within the milk container and does not 10 contact the housing’s external surface to form a recess or cavity. Defendant provides no 11 meaningful response. Dkt. # 28 at 16–20. While Defendant criticizes Plaintiff’s interpretation of 12 the claim, Defendant provides no persuasive interpretation of its own, nor does it explain how

13 the accused products satisfy the “recess or cavity” limitation of the claim. Id.3 14 But for the reasons above, the Court believes that the harms cited are not so immediate 15 and irreparable that an emergency TRO is appropriate.4 Instead, the Court will further evaluate 16 the motion at the preliminary-injunction stage with the benefit of additional briefing and a 17 hearing. 18 IV 19 CONCLUSION 20 The Court hereby DENIES Plaintiff’s motion for a TRO but GRANTS Plaintiff’s request 21 for an order to show cause as to why a preliminary injunction should not issue. See Dkt. ## 17, 22

23 3 The Court expresses no opinion on Plaintiff’s invalidity arguments. See Dkt. # 21 at 27–30. 4 The remaining two TRO factors do not meaningfully alter the Court’s conclusion. See Nken, 24 556 U.S. at 434 (noting that the first two factors are the most important). l 21. The Court DENIES Defendant’s Motion for Leave to File Surreply to Plaintiff’s 2 Supplemental Briefing Addressing the Jurisdictional Issue. See Dkt. #42. The Court will set a 3 preliminary-injunction briefing schedule and preliminary-injunction hearing by separate order. 4 Dated this 17th day of May, 2023. 5 4. Chua 6 John H.Chun United States District Judge 7 8 9 10 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 ORDER DENYING TRO; GRANTING