Brand Protection: Taking Down Counterfeit Sellers with a Temporary Restraining Order (“TRO”)
Once upon a time, corporate brand managers needed to scour flea markets and seedy back alleys to fight counterfeiting. Now, they’re taking down counterfeit sellers on the entire internet, and online channel management is a major challenge.
As this law review article notes:
Brand owners are now faced with counterfeit websites that number in the thousands and change on a daily, and in some instances hourly, basis.
Moreover, because a counterfeiter can, with minimal effort & financial hardship, quickly replace one disabled website with a new one, traditional enforcement measures have proven ineffective & cost-prohibitive.
So how can corporate intellectual property managers stop large numbers of online unauthorized sellers quickly and efficiently?
In short, the answer is a temporary restraining order (TRO).
What’s a TRO?
A TRO is a litigation tool. Under Fed. R. Civ. P. 65(b), a court may issue a temporary restraining order without written or oral notice to the adverse party or its attorney only if:
(A) specific facts in an affidavit or a verified complaint clearly show that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition; and
(B) the movant’s attorney certifies in writing any efforts made to give notice and the reasons why it should not be required.
The purpose of a TRO is to preserve an existing situation until the court can rule upon the merits of a demand for a preliminary injunction, which provides a longer-term solution.
In essence, when counterfeit versions of your goods are being sold online, a TRO allows the court to order Amazon (or any other e-commerce platform) to shut down the counterfeit seller’s account and freeze their assets.
Using TROs in Trademark Infringement Cases
Under section 34 of the Lanham Act (15 U.S.C. § 1116(d)), in civil actions arising out of use of a counterfeit mark in connection with the distribution of goods or services, a court may…
Upon ex parte application, grant an order . . . providing for the seizure of goods and counterfeit marks involved in such violation and the means of making such marks, and records documenting the manufacture, sale, or receipt of things involved in such violation.
Using TROs in Copyright Infringement Cases
Section 502 of the Copyright Act (17 U.S.C. § 502(a)) provides that any court having jurisdiction of a civil action arising under the Act may
grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.
Identify the Grounds for Removal
What legal grounds do you have to get a TRO?
If the goods being sold are counterfeit, it’s very easy to persuade courts to stop the sales. This is because selling counterfeit goods is both a civil tort and a criminal act.
We usually seek TROs in federal court in Chicago, in the Northern District of Illinois, because we’ve found that court especially receptive to protecting brand owners. In fact, the judges in that court have issued the most TROs against people and companies selling counterfeit goods on Amazon.
Taking Down Counterfeit Sellers With John Doe's
You may not know the true identities of the people and businesses selling counterfeits of your products.
Even if you don’t know the true identities of the sellers, you can sue “John Doe 1-50” or “John Doe 1-100” to encompass all counterfeit and infringing sellers with one complaint.
Drafting the Motion
A motion for entry of a TRO for brand enforcement will commonly have language similar to the following:
Defendants are knowingly and intentionally promoting, advertising, distributing, offering for sale, and selling goods bearing and/or using counterfeits and confusingly similar imitations of one or more of Plaintiff’s trademarks at issue within this district and throughout the United States via third-party marketplace websites.
Based on this evidence, Plaintiff’s Complaint alleges claims for false designation of origin, common law unfair competition, and common law trademark infringement.
Also, defendants’ unlawful activities have deprived and continue to deprive Plaintiff of its right to determine how its trademarks are presented to the public.
Defendants have and continue to wrongfully trade and capitalize on Plaintiff’s reputation and goodwill and the commercial value of Plaintiff’s trademarks.
Above all, defendants are defrauding Plaintiff and the consuming public for their own benefit.
Accordingly, Plaintiff is seeking entry of a temporary restraining order prohibiting Defendants’ further wrongful use of Plaintiff’s trademarks.
TRO Remedies for Taking Down Counterfeit Sellers
A TRO motion would commonly seek the following temporary remedies:
- The relevant e-commerce platform must stop all listings of sales of the illegitimate products.
- Amazon must hold all illegitimate inventory in its possession and not ship it to buyers or return it to sellers.
- Amazon must freeze payouts of all money due to the sellers. This may encompass ALL sales from those sellers, and not just sales of the challenged
Serving the Platform
Once you have the TRO in hand, you’ll need to serve Amazon (or the relevant e-commerce marketplace) with the order, either via email or by some other mechanism such as personal service to its corporate headquarters.
Getting the Sellers’ Attention
Once the TRO is granted, you’ve got the sellers’ attention. Their income stream has stopped and they’re hurting.
When that happens, they’re usually ready to cooperate with your brand protection efforts. They’ll often reach out to you to try to get their accounts unfrozen.
You can negotiate a cash settlement to pay for the damage to your brand and market, as well as an agreement that they won’t ever sell pirated versions of your goods again.
Copyright 2022 – Rosenbaum, Famularo & Segall, P.C., the law firm behind Amazon Sellers Lawyer – All Rights Reserved – New York – Illinois
