[E-trademarks] Hivemind thoughts on the Luke Combs counterfeiting case?

Wed Dec 20 13:43:14 EST 2023

In the Combs case, Prof. Burstein found<https://mastodon.social/@design_law/111575756619925564> what is probably the docket where Combs was awarded $250k in statutory damages from Harness. The plaintiff, dates, and amounts match up to Combs v. Schedule A, No. 1:23-cv-14485. Three defendants have been dismissed without prejudice<https://storage.courtlistener.com/recap/gov.uscourts.ilnd.446227/gov.uscourts.ilnd.446227.32.0.pdf> (after default final judgment<https://storage.courtlistener.com/recap/gov.uscourts.ilnd.446227/gov.uscourts.ilnd.446227.31.0.pdf> entered, which is a little odd) and for one, called LAKELAI, the plaintiff has filed a satisfaction of judgment<https://storage.courtlistener.com/recap/gov.uscourts.ilnd.446227/gov.uscourts.ilnd.446227.33.0.pdf>.

One thing that concerns me about this particular case is that the method of service that’s used can theoretically work for a foreign defendant, but, at least by my reading of the Federal Rules of Civil Procedure, shouldn’t work for a domestic defendant. As Prof. Goldman points out in his paper, service in these cases is done under Rule 4(f), which allows the court to authorize service on an individual in a foreign country (and, through Rule 4(h)(2), a foreign entity) in any “means not prohibited by international agreement.” For domestic persons and entities, it has to be by personal service, leaving a copy with a person at the person’s residence, to an agent authorized by law, or as permitted by state law either in the venue court or the court where service is effected. Rule 4(e).
In Combs, the plaintiff alleges in his complaint on information and belief that all of the defendants “reside in the People’s Republic of China or other foreign jurisdictions.” Complaint<https://storage.courtlistener.com/recap/gov.uscourts.ilnd.446227/gov.uscourts.ilnd.446227.1.0.pdf> at ¶ 17. When asking the court to authorize email service, he alleged on information and belief that all of the defendants “have provided false names and physical address information,” Dkt. 13<https://storage.courtlistener.com/recap/gov.uscourts.ilnd.446227/gov.uscourts.ilnd.446227.13.0_1.pdf> at 24, so any attempt to serve them by conventional means would be fruitless. The court authorized service by email in a minute order without comment.
At this point, everybody has acknowledged that the defendant in dispute here is a person in the U.S. and service was effected (to the extent it was) in the U.S. So why is Rule 4(f) service allowable? Does this render the default void, or at least voidable? And if service was never properly effected, is the preliminary injunction valid as to this defendant?
Then we get to an issue of sanctions. I think that there’s at least a reasonable chance that the name and physical address information that Harness provided to Amazon was truthful and accurate. It seems the plaintiff and his attorneys did little to no work to verify that the person was not in the U.S. and that the information was false. Is that Rule 11 sanctionable behavior for presenting to the court “factual contentions” that did not “have evidentiary support, or if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery” without “an inquiry reasonable under the circumstances”? Rule 11(b).

But this is not the most egregious case of suing a U.S. defendant in a Schedule A case. Ed Timberlake earlier in this thread linked to another blog post<https://blog.ericgoldman.org/archives/2023/09/schedule-a-sad-scheme-plaintiff-sanctioned-for-fraud-on-the-court-xped-v-respect-the-look.htm> by Prof. Goldman on Xped v. Schedule A, where the plaintiff and its attorneys did get sanctioned. To me, the level of obstinance shown by plaintiff’s counsel was crazy. One defendant, Respect the Look, appeared through counsel and said that they’re not a Chinese or other foreign entity at all, in fact, they’re an LLC whose members live and have a warehouse in Connecticut where they ship the accused items from. The principal of the defendant appeared at the court status teleconference with the defendant’s attorney. On the record<https://storage.courtlistener.com/recap/gov.uscourts.ilnd.409127/gov.uscourts.ilnd.409127.66.0.pdf>, the following exchange took place:
THE COURT: ...Now, Mr. Beck and his client have presented evidence indicating that they're not an overseas-based company, they're not based in China; they have a location and are registered to do business in the State of Connecticut.
MR. JONES [plaintiffs' counsel]: That's not true, Your Honor.
THE COURT: What part of that's not true?
MR. JONES: They have no basis in the United States. The address that they've provided is a PO box.
...
MR. JONES: ...And I'd have to do more research to find out where Reginald Jennings [principal of defendant at issue] lives, but I don't think he is from Tucson, Arizona, and that he created a fake address just for the purpose of this LLC.
THE COURT: So Mr. Jennings has submitted a declaration in which he states under penalty of perjury that he is a resident of the State of Connecticut. Are you saying you believe that to be false?
MR. JONES: Yes.
MR. BECK [defendant's counsel]: Your Honor, Mr. Jennings is in this courtroom right now. He'd be willing to go under oath and testify under oath right here, right now that he is a resident of Connecticut and an American citizen.
Jennings was later sworn and provided his business’s physical address in Connecticut. Most of us, I think, would back down, or at least offer to withdraw the allegation until we have done further research, when a person purporting to be the principal of the defendant hires counsel and appears in court saying giving his physical business address on the record under oath. Later in the same hearing, the court asked plaintiff’s counsel what his client’s address was in Chicago, as its location in Chicago was alleged as part of the basis for venue in the Northern District of Illinois. He identified it as the same address as his law firm, where the plaintiff has no employees or operations. As Prof. Goldman pointed out, this, among other things, was just too much for Judge Jenkins, who sanctioned<https://storage.courtlistener.com/recap/gov.uscourts.ilnd.409127/gov.uscourts.ilnd.409127.122.0.pdf> plaintiff and its lawyers.

While this is e-trademarks-l and not one of Carl’s patent lists, I’ve seen these cases allege design patent infringement and even utility patent infringement to get a TRO and courts go along with it, often without ever addressing validity or claim construction issues, which the Federal Circuit expects to be done on preliminary injunctions. E.g., Trebro Mfg., Inc. v. FireFly Equip., LLC, 748 F.3d 1159, 1166 (Fed. Cir. 2014). And only rarely does a court question joinder, even in the face of the patent-specific joinder statute in 35 U.S.C. § 299<https://www.law.cornell.edu/uscode/text/35/299>, which was enacted specifically to combat multiple unrelated defendants being sued in the same patent infringement case.

In my experience, attorneys who are unfamiliar with the SAD Scheme are often shocked when they’re introduced to it. They can’t imagine how this is proper or that a federal court is rubber-stamping orders with hundreds of thousands of dollars in consequences against each of thousands of defendants who have received only the barest form of notice. I’d be interested to know if Prof. Goldman has the same experience.

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From: E-trademarks <e-trademarks-bounces at oppedahl-lists.com> On Behalf Of Eric Goldman via E-trademarks
Sent: Wednesday, December 20, 2023 10:55 AM
To: For trademark practitioners. This is not for laypersons to seek legal advice. <e-trademarks at oppedahl-lists.com>
Cc: Eric Goldman <egoldman at gmail.com>
Subject: Re: [E-trademarks] Hivemind thoughts on the Luke Combs counterfeiting case?

CAUTION: EXTERNAL MESSAGE
Sorry/not sorry for the self-promotion. This article, just published last month, describes the SAD Scheme, why it succeeds (TL;DR: because judges let plaintiffs cut multiple due process corners), and why it's abusive.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4381824

I think the SAD Scheme will force a near-term reconciliation for the trademark enforcement community. Either the SAD Scheme is kosher, in which case most people on this list will eventually practice it widely, or it is recognized as abusive and stopped. I'm rooting for the latter, and quickly.

Eric.

Eric Goldman (he/him)
Associate Dean for Research and Professor, Santa Clara University School of Law
Co-Director, High Tech Law Institute & Supervisor, Privacy Law Certificate
Email: egoldman at gmail.com<mailto:egoldman at gmail.com>
Personal website: https://www.ericgoldman.org<https://www.ericgoldman.org/>
Blogs: https://blog.ericgoldman.org<https://blog.ericgoldman.org/> & https://personal.ericgoldman.org<https://personal.ericgoldman.org/>
Mastodon: https://mastodon.lawprofs.org/@ericgoldman

On Wed, Dec 20, 2023 at 7:35 AM Tim Ackermann via E-trademarks <e-trademarks at oppedahl-lists.com<mailto:e-trademarks at oppedahl-lists.com>> wrote:
Prof. Sarah Burstein's been all over these cases too, e.g., https://bsky.app/profile/design-law.bsky.social/post/3kgyb3a3jzf2d .
Tim Ackermann
The Ackermann Law Firm

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On Wed, Dec 20, 2023 at 8:53 AM Edward Timberlake via E-trademarks <e-trademarks at oppedahl-lists.com<mailto:e-trademarks at oppedahl-lists.com>> wrote:
Lots more where that came from (called "Schedule A" cases):

https://blog.ericgoldman.org/archives/2023/09/schedule-a-sad-scheme-plaintiff-sanctioned-for-fraud-on-the-court-xped-v-respect-the-look.htm

Sincerely,

Ed Timberlake
Board Certified Specialist in Trademark Law<https://www.nclawspecialists.gov/for-the-public/find-a-board-certified-specialist/results/detail/?id=29473>

Timberlake Law<http://timberlakelaw.com/>
Chapel Hill, NC

Schedule a call on Clarity<https://clarity.fm/edtimberlake>
ed at timberlakelaw.com<mailto:ed at timberlakelaw.com>
919.960.1950

On Wed, Dec 20, 2023 at 9:45 AM Kevin Grierson via E-trademarks <e-trademarks at oppedahl-lists.com<mailto:e-trademarks at oppedahl-lists.com>> wrote:
Thanks.  I read about this case.  Hadn’t seen the article, but I had the same thought—it was a bit weird that Combs apparently didn’t know who he was suing.  I also thought it was kind of crazy that he got default judgments for $250K in statutory damages.  I realize that statutory damages aren’t the same as actual damages, but it was my recollection from my litigation days that even if you got a default judgment you still had to put on evidence of what your damages actually were.  Hard to see how a court actually hearing about a counterfeiter with a couple of hundred dollars in sales would have awarded a $250K judgment.

Kevin Grierson
CULHANE|MEADOWS PLLC<http://www.culhanemeadows.com/>
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From: E-trademarks <e-trademarks-bounces at oppedahl-lists.com<mailto:e-trademarks-bounces at oppedahl-lists.com>> On Behalf Of Jessica R. Friedman via E-trademarks
Sent: Wednesday, December 20, 2023 8:46 AM
To: For trademark practitioners. This is not for laypersons to seek legal advice. <e-trademarks at oppedahl-lists.com<mailto:e-trademarks at oppedahl-lists.com>>
Cc: Jessica R. Friedman <jrfriedman at litproplaw.com<mailto:jrfriedman at litproplaw.com>>
Subject: [E-trademarks] Hivemind thoughts on the Luke Combs counterfeiting case?

EXTERNAL EMAIL
When the client doesn’t realize that very little people are being sued and isn’t happy about it. (I realize that Above the Law is kind of snarky, but still, the column raises a valid question.)

https://abovethelaw.com/2023/12/counterfeit-litigation-combsover/?utm_campaign=Above%20the%20Law%20Daily&utm_medium=email&_hsmi=287255389&_hsenc=p2ANqtz-9T50RzHAThxqU4oWOYk2LPdBT-QGExRqSisc2JJ902r1irlYYoTd5luTcLSw8gtvfFLtHP1s6vw8TXVxikHkLuRzwzqg&utm_content=287255389&utm_source=hs_email

Jessica R. Friedman
Attorney at Law
300 East 59 Street, Ste. 2406
New York, NY 10022
Phone: 212-220-0900
Cell: 917-647-1884
E-mail: jrfriedman at litproplaw.com<mailto:jrfriedman at litproplaw.com>
URL: www.literarypropertylaw.com<http://www.literarypropertylaw.com/>

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