Monster Energy Co. v. Wensheng
136 F. Supp. 3d 897
| N.D. Ill. | 2015Background
- Monster Energy Company (MEC) sued two China-based sellers (Legend Trading / Wu Zou and mqxxc / Zhang Yuan) on claims including willful trademark counterfeiting, false designation, cybersquatting, Illinois deceptive trade practices, and copyright infringement for offering counterfeit Monster products on AliExpress.
- MEC alleged defendants operated commercial, interactive AliExpress stores, displayed photos of counterfeit Monster products, invited purchases, selected shipping options to the U.S. (including Illinois), and provided PayPal account info to Illinois buyers.
- The court previously entered a TRO freezing defendants’ PayPal accounts and converted it to a preliminary injunction. Defendants moved to dismiss for lack of personal jurisdiction and to release frozen funds.
- MEC submitted evidence (screenshots, email/paypal communications, declarations) showing offers to sell counterfeit items and communications with purchasers using Illinois shipping addresses.
- The court analyzed specific personal jurisdiction under Illinois law and the Due Process Clause, focusing on purposeful direction/express aiming, relatedness of claims to forum contacts, and fairness factors, and addressed whether the asset freeze should remain and whether bond should be increased.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether court has specific personal jurisdiction over foreign defendants | MEC: defendants purposefully directed tortious conduct to Illinois by operating interactive stores, selecting U.S./Illinois shipping, offering counterfeit items to Illinois buyers, and communicating with Illinois purchasers | Defs: interactive websites alone insufficient; no completed sale to Illinois; contacts random/fortuitous; alleged offers induced by fraud; Lanham Act has no extraterritorial reach | Court: jurisdiction exists — defendants expressly aimed conduct at U.S./Illinois, committed tortious acts (offers to sell) connected to Illinois, and fairness factors do not defeat jurisdiction |
| Whether showing an “offer to sell” suffices as tortious act for jurisdiction | MEC: display of photos + invitation to order + shipment/PayPal communications constitute offer to sell under Lanham Act and are tortious acts in forum | Defs: no sale occurred; website operation passive; statutes don’t reach extraterritorial acts | Court: an offer to sell counterfeit goods is actionable and one tortious act in Illinois suffices to support jurisdiction; interactive commercial sites and shipping options show purposeful availment |
| Whether the preliminary injunction freezing PayPal funds should remain | MEC: court already found likelihood of success and irreparable harm; funds are proceeds of counterfeiting; jurisdiction established | Defs: injunction should dissolve or be limited to proceeds tied to specific listings; bond ($10,000) is insufficient given harm from frozen funds | Court: injunction remains; defendants failed to present evidence that funds are unrelated to infringement; bond stays at $10,000 but may be revisited if defendants submit competent evidence of pecuniary harm |
| Whether bond should be increased under Rule 65(c) | MEC: $10,000 is appropriate and consistent with similar cases; strong evidence supports injunction | Defs: significant funds frozen across many defendants; $10,000 inadequate to cover damages if injunction wrongful | Court: denied increase—defendants bore burden to provide evidence of expected pecuniary harm and failed to do so; court may reconsider if competent proof submitted |
Key Cases Cited
- International Shoe Co. v. Washington, 326 U.S. 310 (minimum contacts / Due Process foundational case)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (purposeful availment and foreseeability in forum)
- Walden v. Fiore, 134 S. Ct. 1115 (specific-jurisdiction focus on defendant’s contacts with forum)
- Hemi Group, LLC v. City of New York, 622 F.3d 754 (internet seller’s interactive nationwide business supports jurisdiction)
- Purdue Research Foundation v. Sanofi-Synthelabo, S.A., 338 F.3d 773 (prima facie burden and evidence standard on jurisdictional showing)
- Calder v. Jones, 465 U.S. 783 (express-aiming/Calder effects test for intentional torts)
- Grupo Mexicano de Desarrollo S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (court authority to freeze assets under its jurisdiction)
- Levi Strauss & Co. v. Shilon, 121 F.3d 1309 (offer to sell infringing goods establishes Lanham Act liability)