## Facts

- Tiffany (NJ) LLC and Tiffany and Company (collectively, Tiffany) sued multiple defendants for allegedly selling counterfeit TIFFANY-branded products through various websites and for willfully using and copying Tiffany’s trademarks.
- Early in the case, and before any defendants appeared, the court entered a temporary restraining order and later a preliminary injunction.
- The preliminary injunction ordered expedited discovery from third-party financial institutions and directed those institutions to restrain defendants’ assets.
- The injunction required production of records in a financial institution’s “possession, custody, or control,” including records located outside the United States, and required restraint of defendants’ assets within the institution’s possession, custody, or control.
- Three non-party Chinese banks—China Merchants Bank (CMB), Bank of China (BOC), and Industrial and Commercial Bank of China (ICBC) (collectively, the Banks)—received notice and were targeted for discovery and asset restraints because Tiffany believed they processed or held funds connected to defendants’ online sales.
- The Banks told Tiffany that they did not hold defendants’ assets in the United States, lacked access to or control over non-U.S. accounts in the manner Tiffany sought, and that Chinese law prohibited disclosing or freezing accounts in China absent authorization through Chinese legal channels.
- The Banks moved to modify the preliminary injunction to limit or remove the document-production and asset-restraint obligations as to accounts and records located in China.
- Tiffany cross-moved to compel the Banks to comply with the preliminary injunction’s discovery and asset-restraint provisions.

## Issues

1. Whether the court should modify the preliminary injunction to require Tiffany to seek documents from the Chinese Banks through the Hague Convention procedures rather than compelling direct production under the injunction.
2. Whether the court could continue to require the Banks, as non-parties with notice, to restrain defendants’ assets within their possession, custody, or control, including assets connected to accounts in China.
3. Whether BOC should be treated differently from CMB and ICBC on the discovery question based on the record regarding BOC’s U.S. contacts and conduct.

## Decision

- The court granted in part and denied in part the Banks’ motion to modify the preliminary injunction.
- The court granted in part and denied in part Tiffany’s cross-motion to compel.
- As to ICBC and CMB, the court modified the preliminary injunction and required Tiffany to seek discovery through the Hague Convention procedures.
- As to BOC, the court declined to require Hague Convention procedures and ordered BOC to comply with the preliminary injunction’s discovery provisions.
- The court kept the asset-restraint provisions in effect as to all three Banks and granted Tiffany’s request to compel compliance with those restraint obligations.

## Legal Principles

- U.S. courts may order discovery from entities subject to their jurisdiction, but when the discovery would occur abroad and may conflict with foreign law, courts may weigh comity factors and may require use of Hague Convention procedures.
- The decision whether to require Hague Convention procedures is fact-specific and may differ among similarly situated foreign entities depending on the record concerning burden, foreign-law conflict, alternative means of obtaining the material, and the entity’s ties to the United States.
- Under Federal Rule of Civil Procedure 65, an injunction can bind non-parties that receive actual notice when they are within the scope of persons covered by the order (for example, those acting in active concert or participation) and when the court’s order is otherwise enforceable.
- In trademark counterfeiting cases, asset restraints directed at financial institutions may be maintained to prevent dissipation of funds and to preserve the availability of meaningful relief while the case proceeds, including when defendants have not appeared.

## Conclusion

In this counterfeit-goods trademark suit, the court partially modified its preliminary injunction: it required Tiffany to pursue document discovery from ICBC and CMB through Hague Convention procedures, compelled BOC to produce records under the injunction’s discovery terms, and continued the injunction’s asset restraints against all three non-party Banks to prevent the transfer or concealment of defendants’ assets.


Tiffany (NJ) LLC v. Forbse, 2012 WL 1918866 (2012)