## Facts

- Fujian Sharing Import & Export Ltd. Co. (Fujian), an online counterfeiting operation based in China, sold counterfeit goods bearing the trademarks of The North Face Apparel Corp. and PRL USA Holdings, Inc.
- Fujian registered and used many domain names for “rogue” retail websites designed to look like the plaintiffs’ authorized online stores.
- When a rogue site was shut down, Fujian would shift its activity to newly registered domains, making enforcement difficult.
- Plaintiffs sued Fujian in the Southern District of New York for federal trademark counterfeiting, trademark infringement, and cybersquatting.
- Fujian did not appear or respond. The court entered default judgment, issued a permanent injunction against Fujian’s counterfeiting activity, and held Fujian in civil contempt for violating court orders.
- Public Interest Registry (PIR) is a U.S.-based nonprofit that operates the registry for the .org top-level domain. PIR was not a party to the action and was not an officer, agent, servant, employee, or attorney of Fujian.
- As part of enforcement of the court’s orders against Fujian and the infringing domain names, the court directed PIR to temporarily disable identified infringing .org domains, stop facilitating customer connections to those domains, and transfer ownership of the domains.
- Plaintiffs contended that Fujian continued counterfeiting through rogue websites registered with PIR after the court’s orders.
- Plaintiffs moved to hold PIR in civil contempt, arguing (including at oral argument) that PIR “aided and abetted” Fujian by continuing to provide registry services that allowed new infringing .org domains to be registered and used.

## Issues

1. Whether a nonparty domain-name registry (PIR) could be held in civil contempt for alleged noncompliance with injunction-related orders entered against an online counterfeiter.
2. Whether PIR fell within Fed. R. Civ. P. 65(d)(2) as a person “in active concert or participation” with the enjoined defendant, such that PIR could be bound by the injunction and sanctioned for contempt.
3. Whether PIR’s performance of ordinary registry functions, after receiving notice of the court’s orders, supported an “aiding and abetting” theory sufficient to justify contempt.

## Decision

- The court denied plaintiffs’ motion to hold PIR in contempt.
- The court concluded that PIR, as a nonparty, was not shown to be acting as Fujian’s agent or otherwise acting in “active concert or participation” with Fujian within the meaning of Rule 65(d)(2).
- The court declined to impose contempt sanctions on PIR on the record presented, while leaving intact the default judgment, permanent injunction, and contempt findings directed at Fujian.

## Legal Principles

- Under Fed. R. Civ. P. 65(d)(2), an injunction binds only: (i) the parties; (ii) the parties’ officers, agents, servants, employees, and attorneys; and (iii) other persons who are in active concert or participation with any of the foregoing and who have actual notice of the order.
- A nonparty cannot be held in contempt for violating an injunction unless the nonparty fits within one of Rule 65(d)(2)’s categories; notice of the injunction alone is not enough.
- “Active concert or participation” requires more than the provision of standard, neutral services used by an enjoined party; there must be a sufficient connection showing cooperation in the prohibited conduct or assistance that brings the nonparty within Rule 65(d)(2).
- Civil contempt requires an adequate evidentiary basis that the alleged contemnor was bound by the order and violated it; courts will not extend contempt liability to nonparties based only on routine infrastructure activity.

## Conclusion

In *North Face Apparel Corp. v. Fujian Sharing Import & Export Ltd.*, the court refused to hold the .org registry operator (PIR) in civil contempt for continued counterfeiting activity carried out by the enjoined defendant through .org domains, reasoning that Rule 65(d) did not bind PIR absent proof that PIR acted as Fujian’s agent or in active concert or participation with Fujian rather than merely operating the domain registry in the ordinary course.


North Face Apparel Corp. v. Fujian Sharing Import & Export Ltd., 2011 U.S. Dist. LEXIS 158807 (2011)