Patent Holder Identified in Exhibit 1 vs. Does 1-254 (N.D. Ill. 2021)
I previously wrote briefly about this double-anonymous lawsuit. The plaintiff filed the lawsuit in secret in order to avoid spooking the defendants. The complaint was followed up by a request for temporary restraining order. District Court Judge Matthew Kennelly quickly denied plaintiff’s request to conceal its identity and also issued an order to show cause as to why the case should not be dismissed for improper joinder under 35 U.S.C. § 299. This ex parte situation provides an instance where it is important that the case was routed to a patent-knowledgeable judge such as Judge Kennelly.
In its opinion, the court begins with a discussion of a common practice in trademark litigation — to file suit naming “dozens or even hundreds of claimed infringers and counterfeiters.” In those cases, an attachment to the complaint offers some information that partially identifies the defendants. And, that attachment is filed under seal to avoid tipping-off the defendants before a TRO can be filed to payment processors (such as PayPal) to attach any of the defendants assets in the US. In those cases, however, the plaintiff’s name is ordinarily made public. In response, the plaintiff has amended its pleadings to now disclose its name under the new caption
NG Imports vs. Does 1-254 (N.D. Ill. 2021)
In his order, Judge Kennelly also raised the improper joinder issue of 35 U.S.C. § 299. That provision was added to patent holders from asserting their patents against a large number of defendants in a single lawsuit and reads “For purposes of this subsection, accused infringers may not be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, based solely on allegations that they each have infringed the patent or patents in suit.” In response, the patentee has alleged that all of the accused products are coming from the same “unknown Chinese manufacturer.” That same-source linkage would seemingly be enough to allow joinder.
The amended complaint also reveals the patent at issue – US10881159. A parallel lawsuit was previously filed in California asserting the same patent against a Chinese company. NG Imports v. Zhengzhou Kerui Electronic Commerce Company, Ltd., Docket No. 2:20-cv-09776 (C.D. Cal. Oct 23, 2020).
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The papers mention a site that I have not explored sellerdefense.cn — a site that “monitors this District’s PACER filings and screens for Plaintiff counsel’s filings as well as all Trademark and Patent filings throughout the District.” In his opinion, the Judge found that the existence of the website as justification for sealing Plaintiff’s name an “inferential leap—worthy of Bob Beamon in the 1968 Olympics—that if it becomes known that the plaintiff has filed a lawsuit against someone, the defendants will all hide their assets. The Court is unwilling to draw this inference without some supporting evidence and argument.”