IP Law Daily, COPYRIGHT—N.D. Ill.: Joinder improper of TEMU sellers in SHEIN copyright suit, (Sep 11, 2024)

By Kevin M. Finson

Copyright claims against 24 defendants for infringing 21 different registrations were improperly joined because there was no indication the defendants collaborated or even infringed the same works except by happenstance.

The operator of SHEIN improperly joined several defendants in a copyright infringement suit, the U.S. District Court in Chicago has held. The various defendants were not plausibly alleged to have engaged in the same transaction, occurrence, or series thereof, but appeared to have independently infringed different registered copyrights, (Roadget Business Pte., Ltd. v. Individuals, Corporations, Limited Liability Companies, Partnerships, and Unincorporated Associations Identified on Schedule A Hereto, No. 1:24-cv-03139 (N.D. Ill. Sept. 9, 2024)).

Roadget Business Pte, Ltd. (Roadget), a Singaporean company, owned SHEIN, an online fashion and lifestyle retailer, and owned several registered copyrights related to that business. Roadget brought suit for copyright infringement against 24 entities, all of whom were foreign entities who sold products on the e-commerce platform TEMU. Defendants 2,4, and 20 moved to dismiss for lack of personal jurisdiction. Defendants 6 and 8 moved to dismiss or strike claims for enhanced damages, statutory damages, and attorney’s fees. All of the defendants moved to sever the claims on the basis of improper joinder.

Personal jurisdiction. Defendants 2, 4, and 20 argued that they did not sell their respective accused products in Illinois and therefore the court lacked personal jurisdiction over them. The defendants presented affidavits that they had no operations in Illinois and had never sold, advertised, or promoted a product in Illinois. Roadget offered no evidence to challenge the affidavits, so the court found that it lacked personal jurisdiction. Roadget asserted an alternative basis for jurisdiction under Rule 4(k)(2) which allowed an exercise of jurisdiction over persons who had ample contacts with the United States as a whole but not with any particular state. The court found this unavailing because the defendants in question agreed that they had sold the allegedly infringing products in California and North Carolina, so jurisdiction would be proper in those states.

Enhanced damages claims. Defendants 6 and 8 argued that the complaint did not plausibly allege they willfully infringed the asserted copyrights and that the timing of registration in relation to the alleged infringement made it implausible for them to have infringed the designs post-registration. The court held that allegations of exact copying led to a plausible inference of willfulness and that the defendant’s evidence it sold the products at issue prior to the registration of the copyrights could not be considered at the motion to dismiss stage. The court denied the motion to dismiss or strike the enhanced damages, statutory damages, and attorney’s fee claims.

Improper joinder. Roadget argued that all 24 defendants participated in the same mass infringement of its copyrights by selling infringing products on the same online platform. The court found that this was insufficient; there was no evidence of conspiracy among the defendants, and the defendants did not appear to have infringed the same copyrights. This was simply an allegation that 24 different entities infringed 21 different copyrights by selling infringing goods on a well-known e-commerce platform. The court further declined to sever the cases and instead dismissed all but one so as to prevent Roadget from receiving a windfall by avoiding paying the filing fee as to each of the alleged infringers it ought to have sued separately.

The court ultimately dismissed Defendant’s 2, 4, and 20 for lack of personal jurisdiction and dismissed Defendants 5 through 10, 12 through 19, and 21 through 24 without prejudice for improper joinder. Because Roadget had previously voluntarily dismissed Defendant’s 3 and 11, this left only Roadget’s claims against Defendant 1 remaining in the case.

The Case is No. 1:24-cv-03139.

Judge: Ellis, S.

Attorneys: Deepa Arundati Chari (Sidley Austin LLP) for Roadget Business Pte. Ltd. William W. Flachsbart (Dunlap Bennett & Ludwig PLLC) for The Individuals, Corporations, Limited Liability Companies Partnerships, and Unincorporated Associations Identified on Schedule A Hereto.

Companies: Roadget Business Pte. Ltd

Cases: Copyright TechnologyInternet IllinoisNews