9 February 2022TrademarksMuireann Bolger

NBA aims to settle venue score with Chinese retailer

US National Baseball Association (NBA) Properties has urged a federal appeals court to uphold the default judgment of a federal court that a Chinese e-commerce retailer infringed by selling apparel trademarked with fake sports logos.

The NBA filed a complaint against multiple e-commerce store operators that allegedly trafficked counterfeit versions of its products back in September 2020 at the US District Court for the Northern District of Illinois.

The court then entered a default judgment against all defendants in the case rejecting e-retailer HANWJH’s motion to dismiss the lawsuit when it found the online business had opened itself to suit in Illinois by shipping products to the state.

This prompted HANWJH to lodge an appeal back in October 2021 at the US Court of Appeals for the Seventh Circuit arguing that it should not be subject to a lawsuit in that state, and that it had no contacts in Illinois.

The NBA countered by asking the court of appeals to uphold the 2020 ruling on Monday, February 7.

Infringing products

According to NBA, the retailer infringed by directly offering 205 different products for sale to US residents nationwide that bore NBA team names to advertise its products, including in Illinois.

These included counterfeit shorts with 41 options featuring various NBA teams and related events, such as the NBA All-Star game, the Sports League said.

NBA argued that the seller “intentionally” set up its store  on Amazon to offer and ship products to Illinois, and sold and shipped at least one counterfeit product directly to Illinois.

NBA contended that the seller “cannot reap the benefit of a nationwide business model... without accepting the legal responsibilities that come along with it,” and that it cannot “have its cake and eat it, too”.

It further argued that the seller’s Amazon US store listed “Illinois” as an available shipping option, collected payment from an Illinois resident, and did not include any provisions on its listing indicating that it would not sell or ship products to Illinois residents.

Illinois Blues

There is no factual dispute that the defendant intentionally directed sales toward the Illinois market, the complaint noted.

“An Illinois customer only needed to click the ‘buy’ button for any quantity of the 205 different counterfeit products…offered for sale, with the expectation that the defendant would process the order and ship the counterfeit product to Illinois,” contended the sports league.

According to NBA, the seller’s intentional business strategy included operating a US-based e-commerce store that was set up to ship to Illinois, the nation’s sixth most populous state.

Considering these “direct, purposeful contacts”, the NBA held that “the due process clause may not readily be wielded as a territorial shield to avoid interstate obligations that have been voluntarily assumed”.

The NBA is an unincorporated association and professional basketball league, comprising 30 member teams that offers merchandise bearing the NBA trademarks for fans to identify with their favourite teams.

In its filing, the league noted that for many years, it has identified thousands of e-commerce stores which are trafficking counterfeit products to consumers throughout the US.

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