October 1, 2020

Judge To Art Licensing Agency: No, Your Stupid Unicorn Is Not More Important Than COVID-19 Right Now, Shut Up

Pretty much everyone by now should recognize that large parts of the world have needed to shutdown due to COVID-19 — and you would hope that most people would be understanding that certain things may need to be delayed for a bit. But apparently not lawyer Michael Hierl from the law firm of Hughes Socol Piers Resnick & Dym, and his client, a copyright licensing agency called Art Ask Agency, based in Spain. On March 9th, Art Ask Agency sued a bunch of unnamed defendants (their identity to be determined later), in US federal court in Illinois, over what it calls “counterfeit” images of a unicorn designed by artist Anne Stokes. Stokes apparently does brisk work in unicorn-related merchandise, as seen by her page on Art Agency’s website:

And, boy, is Art Agency ever so mad that there are “counterfeit” unicorns out there, which they claim violate Stokes trademark and copyright. Art Agency is so mad, that it’s tossing out totally random fantasy numbers that have nothing to do with the specific works in this case:

The success of Plaintiff’s brand has resulted in its counterfeiting. Plaintiff has
identified numerous domain names linked to fully interactive websites and marketplace listings
on platforms such as iOffer and Aliexpress, including the Defendants’ Internet Stores, which
were offering for sale, selling, and importing counterfeit products to consumers in this Judicial
District and throughout the United States. Defendants have persisted in creating the Defendants’
Internet Stores. Internet websites like the Defendant Internet Stores are estimated to receive tens
of millions of visits per year and generate over $135 billion in annual online sales. According to
an intellectual property rights seizures statistics report issued by Homeland Security, the
manufacturer’s suggested retail price (MSRP) of goods seized by the U.S. government in 2013
was over $1.74 billion, up from $1.26 billion in 2012. Internet websites like the Defendants’
Internet Stores are also estimated to contribute to tens of thousands of lost jobs for legitimate
businesses and broader economic damages such as lost tax revenue.

Then there’s a lot of conspiracy theory stuff about how the defendants hide who they are and part of this lawsuit is to try to figure out who is selling those darn counterfeit unicorns. As the plaintiff admits, many of the sellers are likely in China, meaning it’s unlikely (1) they’ll be found or (2) that a federal court in the US can do much to people in China printing counterfeit t-shirts. It seems the real goal of the lawsuit is to get a court order that can be passed along to various internet merchants to pressure them to take down the listings. Part of the relief sought is:

Entry of an Order that, upon Plaintiff’s request, those in privity with Defendants and
those with notice of the injunction, including any online marketplaces such as iOffer and Alibaba
Group Holding Ltd., Alipay.com Co., Ltd. and any related Alibaba entities (collectively,
“Alibaba”), social media platforms, Facebook, YouTube, LinkedIn, Twitter, Internet search
engines such as Google, Bing and Yahoo, web hosts for the Defendants’ Domain Names, and
domain name registrars, shall:

a. disable and cease providing services for any accounts through which Defendants
engage in the sale of counterfeit products using the Anne Stokes trademark or which
are derived from the copyrighted artwork, including any accounts associated with the
Defendants listed on Schedule A;
b. disable and cease displaying any advertisements used by or associated with
Defendants in connection with the sale of counterfeit products using Plaintiff’s
trademark or which are derived from the copyrighted artwork; and
c. take all steps necessary to prevent links to the Defendants’ Domain Names identified
on Schedule A from displaying in search results, including, but not limited to,
removing links to the Defendants’ Domain Names from any search index;

So, in short, Art Agency and Stokes want the court to issue an order that they can wave at various stores and search engines demanding they delist the various “counterfeit” unicorn merch. Indeed, a day after filing the complaint, the lawyer, Hierl, requested a temporary restraining order (TRO) on the still nameless defendants. He’s also filed a bunch of stuff under seal, which is a bit confusing in a case like this, but given some of the conspiratorial language in the complaint — and Hierl later also suggesting that if the defendants were to become aware that he was after them they may alter their tactics and hide — perhaps that’s all part of the plan.

As you might imagine, the court is a wee bit busy with everything else going on right now. So, it said rather than an immediate hearing, it needed to push off a hearing until April 13. In the grand scheme of things… not that long. Hierl, quickly filed an ex parte motion saying that it was really super duper important to have the hearing immediately, because counterfeit unicorns were at stake, dammit.

Due to the nature of Plaintiff’s claims and the existence of irreparable injury, Plaintiff respectfully requests this Court to re-set its Ex Parte Motion for Entry for a Temporary Restraining Order for presentment during the week of March 16, 2020. Plaintiff is willing to appear telephonically or otherwise make itself available for the presentment of Plaintiff’s motion.

Delay of entry of Plaintiff’s Ex Parte Motion for Temporary Restraining Order would result in significant irreparable injuries to Plaintiff, continue harm to the consuming public and denial of the protections that only this Court can afford.

Dude’s in quite a rush, it seems. The same day (last Monday) that Hierl made this request to have the hearing as quickly as possible, rather than waiting until April, the Court responded saying, in not so many words, “Dude, everyone’s impacted by COVID-19, all cases are impacted, including yours, and be a little patient.” More specifically, it pointed him to the following notice, which makes it clear that many things are getting pushed back and the court isn’t having any hearings for a few weeks due to COVID-19.

You would think that lawyer Hierl might get the message. But, no. UNICORNS are at stake. Counterfeit unicorns. He filed an emergency Ex Parte Motion, demanding a TRO as soon as possible.

On Wednesday, Judge Steven Seeger, who’s only been on the bench for a few months, denied the motion two days later, and was, uh, pretty clear to Hierl that unicorns, counterfeit are not, are not exactly the most pressing matter at this moment:

This case involves counterfeit unicorn drawings. The complaint includes a few examples
of products that allegedly infringe Plaintiff’s trademarks, which offer “striking designs and lifelike portrayals of fantasy subjects.”… One example is a puzzle of an elf-like creature embracing the head of a unicorn on a beach…. Another is a hand
purse with a large purple heart, filled with the interlocking heads of two amorous-looking
unicorns… There are phone cases featuring elves and unicorns, and a unicorn running beneath
a castle lit by a full moon….

Meanwhile, the world is in the midst of a global pandemic. The President has declared a
national emergency. The Governor has issued a state-wide health emergency. As things stand,
the government has forced all restaurants and bars in Chicago to shut their doors, and the schools
are closed, too. The government has encouraged everyone to stay home, to keep infections to a
minimum and help contain the fast-developing public health emergency.

The United States District Court for the Northern District of Illinois took action last week
to protect the public, issuing General Order No. 20-0012 entitled IN RE: CORONAVIRUS
COVID-19 PUBLIC EMERGENCY. See www.ilnd.uscourts.gov (last visited March 16, 2020)
(bold and all caps in original). On March 16, the Executive Committee issued an amended Order
that, among other things, holds all civil litigation in abeyance.

Judge Seeger is just warming up.

Last week, Plaintiff filed a motion for a temporary restraining order (Dckt. No. 11)
against the Defendants (who are located abroad) and requested a hearing…. This Court thought that it was a bad time to hold a hearing on the motion. So, this Court moved the hearing by a few weeks to protect the health and safety of our community, including
counsel and this Court’s staff. See Dckt. No. 19. Waiting a few weeks seemed prudent.

Plaintiff has not demonstrated that it will suffer an irreparable injury from waiting a few
weeks. At worst, Defendants might sell a few more counterfeit products in the meantime. But
Plaintiff makes no showing about the anticipated loss of sales. One wonders if the fake fantasy
products are experiencing brisk sales at the moment.

Uh oh, Hierl. This ain’t going well.

On the flipside, a hearing – even a telephonic one – would take time and consume
valuable court resources, especially given the girth of Plaintiff’s filings. See Dckt. Nos. 1, 6-7,
11-18. And the proposed temporary restraining order would require the attention of innocent
third parties, and create a cascade of obligations. Plaintiff wants to force financial institutions to
lock down accounts, and require domain name registries to shut down websites, for example.
See Dckt. No. 12. Plaintiff requests an order forcing innocent third parties – such as Amazon,
eBay, PayPal, Alibaba, Western Union, plus social media platforms such as “Facebook,
YouTube, LinkedIn, [and] Twitter,” plus internet search engines such as “Google, Bing and
Yahoo,” among others – to spring into action within two or three days. Either the order would be
a nullity, or it would distract people who may have bigger problems on their hands right now.

The judge ain’t done yet.

Plaintiff recognizes that the community is in the midst of a “coronavirus pandemic.”… But Plaintiff argues that it will suffer an “irreparable injury” if this Court does not hold a hearing this week and immediately put a stop to the infringing unicorns and the knock-off elves.… To top it off, Plaintiff noticed the motion for a hearing on March 19, 2020, a day that has been blocked off on the Court’s calendar – as revealed on its webpage – for several weeks….

Meanwhile, the Clerk’s Office is operating with “limited staff.”… “[P]hone conferencing” is available “in emergency situations and
where resources permit.” … The Court can still hear emergency motions, but resources
are stretched and time is at a premium… If there’s ever a time when emergency
motions should be limited to genuine emergencies, now’s the time.

And, to be clear, at this point, Judge Seeger is still talking about the original Ex Parte motion to move the hearing up. Now we get to the “Emergency” Ex Parte Motion.

Thirty minutes ago, this Court learned that Plaintiff filed yet another emergency motion.
They teed it up in front of the designated emergency judge, and thus consumed the attention of
the Chief Judge…. The filing calls to mind the sage words of Elihu Root:
“About half of the practice of a decent lawyer is telling would-be clients that they are damned
fools and should stop.”

The world is facing a real emergency. Plaintiff is not. The motion to reconsider the
scheduling order is denied.

Yeah, take your fake unicorns and shut the fuck up right now.

Oh, and then just a bit later, Judge Seeger denied the Temporary Restraining Order, and once again, tries to put things in perspective for Hierl and his client.

Plaintiff’s Ex Parte Motion
for Entry of a Temporary Restraining Order (Dckt. No. [11]) is denied without prejudice.
Injunctive relief is an “extraordinary remedy,” and it is “not granted routinely.”… Here,
Plaintiff makes next to no showing that it will suffer irreparable harm unless this Court
issues emergency relief. The gist of the motion is that Plaintiff will suffer harm from the
sale (and the offer for sale) of counterfeit unicorn products on the internet. But Plaintiff
gives this Court no information about the anticipated loss of sales. Not even an estimate.
Plaintiff doesn’t even tell this Court anything about its own sales, let alone anything about
the volume of sales that it will lose without immediate Court action. Maybe the loss of
sales is de minimis, or maybe not. But the point is that Plaintiff has made no such
showing. A generic allegation of harm, without more, does not weigh heavily in the
balance.
On the flipside, one of the most important considerations before awarding
equitable relief is the public interest. Here, Plaintiff proposes a bloated order that imposes
extraordinary demands on third parties, including a wide array of technology companies
and financial institutions. (Dckt. No. [30]) Plaintiff’s proposed order would require
immediate action, in a matter of days, from firms that have nothing to do with this case. In
the meantime, the country is in the midst of a crisis from the coronavirus, and it is not a
good time to put significant demands on innocent third parties
. See generally General
Order 20−0012 (as amended on March 17, 2020). All of them undoubtedly have (more)
pressing matters on their plates right now. To put it bluntly, Plaintiff’s proposed order
seems insensitive to others in the current environment. Simply put, trademark
infringement is an important consideration, but so is the strain that the rest of country is
facing, too. It is important to keep in perspective the costs and benefits of forcing
everyone to drop what they’re doing to stop the sale of knock−off unicorn products, in the
midst of a pandemic
. Without a showing of immediate, real−world harm, this Court
cannot impose significant demands on third parties in the current environment. That said,
this Court denies the motion without prejudice. Later, perhaps Plaintiff will make a better
showing. But for now, Plaintiff has come up short (by a wide margin). As a reminder, the
Court expects Plaintiff and its counsel to follow General Order 20−0012, including the
admonition about emergency motions.

And, yes, this is our second story about potential unicorn infringement in just about a month, but these are the times we live in.

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