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

[Dineen Wasylik]

I represented a Canadian national pro bono in a case where she was fully
licensed under Tee Public's Fan Art Program.  The accused product (1) was
fully authorized by the brand through that program and tagged as such (2)
did not mention the Mark at all, but rather used an infamous line from the
TV show the mark was associated with (3) did not use the mark in the Design
Title or Description of the Tee Public listing (4) grossed a total of
$19.30 American dollars.   The only mention of the mark, at all, was in one
of the tags (and that mention is entirely nominative).  The poor woman
collapsed in the middle of the grocery store when I said I would help her
for free -- her husband is a graduate student and she is supporting him and
their two kids via her art, and she could not afford to pay a U.S. lawyer
to fight it.     However, she sold a lot of her original artwork via that
platform, and thus had real money locked up in her Pay Pal account.   The
Plaintiff was smart enough to dismiss quickly (and before I could seek
sanctions) but a quick dismissal without prejudice cannot wipe away the
trauma of being sued in Federal Court in a foreign country when you've done
everything right.  The dismissed so quickly they never got to asking me or
my client for confidentiality, and my client is fine with me shouting about
this injustice from the rooftops.

To say that these Schedule A cases are a mess is an understatement.  By
freezing the accounts before making any proof, getting a fast default, and
collecting the frozen proceeds, what we are witnessing is court-sanctioned
theft and an absolute lack of due process.

I have defended enough of them now that I am no longer shocked.  Yet each
one makes me lose more faith in our legal system.

Best,
Dineen

On Wed, Dec 20, 2023 at 1:43 PM Gordon, Michael via E-trademarks <
e-trademarks at oppedahl-lists.com> wrote:

> 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.
>
>
>
>
>
> [image: A picture containing person, person, wall, indoor Description
> automatically generated][image: A picture containing text, screen
> Description automatically generated] <https://www.cfraresearch.com/>
>
> *Michael R. Gordon*
>
> Assistant General Counsel
>
> *Licensed to practice only in Maryland, North Carolina, and the District
> of Columbia*
>
> michael.gordon at cfraresearch.com
>
> o: +1.646.517.2461
>
> *Clients First • Integrity • Courage • Excellence*
>
> [image: LinkedIn] <https://www.linkedin.com/company/cfra-research/>[image:
> Twitter] <https://twitter.com/cfraresearch>[image: YouTube]
> <https://www.youtube.com/@CFRAResearch>
>
>
>
>
>
> *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
> Personal website: https://www.ericgoldman.org
> Blogs: https://blog.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> 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
>
> E:  tim at ackermannlaw.com
> P:  817.305.0690
> F:  214.453.0810
> W: ackermannlaw.com
> O: 1701 W. Northwest Hwy. Ste. 100
>      Grapevine TX 76051
>
>
>
>
>
> On Wed, Dec 20, 2023 at 8:53 AM Edward Timberlake via E-trademarks <
> 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
>
> 919.960.1950
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
> On Wed, Dec 20, 2023 at 9:45 AM Kevin Grierson via E-trademarks <
> 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/>
>
> [image: Mobile:]
>
>   757-726-7799
>
> [image: Fax:]
>
>   866-521-5663
>
> [image: Email:]
>
>   kgrierson at cm.law
>
>
>
> *From:* E-trademarks <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>
> *Cc:* Jessica R. Friedman <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
>
> URL: www.literarypropertylaw.com
>
>
>
> [image: 1479430908386_PastedImage]
>
> --
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>
> --
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>
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