Case Brief

In March 2023, a cross-border e-commerce company in Shenzhen suddenly found that 200,000 US dollars had been transferred from its Amazon account due to the judgment in a U.S. trademark infringement lawsuit. After acceptance of the case, Unitalen assisted in sorting out the case facts at the first time, and learned that the final default judgment for the lawsuit case had been issued already in June 2021, in which it was determined that the defendant infringed on the exclusive right of the plaintiff, U.S. WOH Company, to use the U.S. registered trade mark No. xyz, and the defendant was ordered to pay compensation of 200,000 U.S. dollars to the plaintiff. The compensation was transferred since the defendant's account reaches the full amount in March 2023.

After checking relevant case facts with the cross-border e-commerce company, we learned that the company's Amazon mailbox did not receive any pleadings, summons or judgments electronically served by the plaintiff or the court, except for an email notification that the link to the goods would be taken down for the suspected trademark infringement, but the email neither made clear the specific infringement information, nor informed the lawsuit case number.

As it has been almost 2 years since the issuance of the judgement of the case, Unitalen made an immediate response. In April 2023, we filed "a motion to set aside judgment" in the district court of Illinois to restart examination of the lawsuit. At the same time, in order to put pressure on the plaintiff, we filed a cancellatioin against the plaintiff's trademark, with the intention of providing leverage for the subsequent lawsuit and settlement negotiations, and ending the case with a settlement.

However, after we filed the "motion to set aside judgment", the plaintiff proposed to set aside examination of the "motion to set aside judgment", and applied for jurisdictional disclosure to check the document service. According to the requirements of the U.S. disclosure procedure, we continuously held meetings with the plaintiff's attorneys in a short period of 20 days, and exchanged multiple disclosure documents with the other party. In June 2023, after we exerted pressure through invalidation and infringement litigation proceedings, we took advantage of the plaintiff's weakness of inability to provide evidence for electronic service, and ultimately reached a settlement agreement with the plaintiff through several settlement negotiations. As a result, we helped the defendant company get back most of the executed compensation as judged and successively recover the economic loss.

Attorney's comments

A default judgment was issued to the defendant in this case because of missing a deadline of the defense period. According to provisions of the U.S. law, it is difficult to effectively revoke a judgment that has remained valid for two years through a motion to set aside judgment, and it is required to prove presence of sufficient and reasonable grounds and measures should be taken timely for this. A search of relevant cases showed few successful cases previously. However, in view of the fact that the plaintiff in this case did have defects in service and the psychological weakness that the plaintiff had to maintain the validity of its U.S. registered trademark, and in combination with the U.S. attorney's opinions, the Unitalen team timely formulated a strategy of "declaration of invalidation" and "restarting of lawsuit" to apply double pressure, and finally successfully realized the purpose of settlement in a short period of 2 months through cooperation and advance of the administrative procedure and the civil procedure.