Nike’s lawsuit against alleged sellers of counterfeit sportswear is set to move forward on Tuesday, when the brand’s attorneys seek a preliminary injunction. The sneaker company filed a lawsuit in Illinois District Court in January, accusing a group of online marketplaces on sites like AliExpress and Amazon of infringement and trademark infringement. After securing a temporary restraining order in February, Nike now wants a preliminary injunction that will continue to restrain the defendants from selling fake Nike products, help its lawyers collect data about them and freeze their assets.
Parts of the trial have been hidden from public view, but sealed documents seen by Complex give details of the long list of defendants and the court’s temporary restraining order against them.
When Nike first filed the complaint, it kept the list of 207 defendants secret, which it attached to the complaint in a sealed document. Lawyers for the company say it has good reason to suspect the defendants are all residents of China and Hong Kong. They argue that making their names public before Nike obtained a restraining order against them would have allowed the defendants to escape justice.
“The sealing of this portion of the record is necessary to prevent the defendants from learning about these proceedings prior to the execution of the temporary restraining order,” the motion to leave the names of the defendants under seal reads. “If defendants were to learn of these proceedings prematurely, the likely result would be the destruction of relevant documentary evidence and the concealment or transfer of assets to foreign jurisdictions.”
The sealed file contains an array of 207 online stores listed as defendants, with seller aliases and URLs for each. The defendants are grouped according to the third-party platforms on which they allegedly sell counterfeit products: 120 of them from AliExpress, 81 from Amazon and six from eBay.
Nike attorneys also submitted an exhibit last week showing the email addresses of each of the defendants. Complex exchanged emails with two of the defendants, both of whom claim to have never sold Nike items in their online stores. A lawyer representing Nike in the case did not respond to a request for comment.
Nike obtained a temporary restraining order sealed against the defendants in February. In that filing, which Complex viewed, the court concluded that the alleged counterfeit sellers “could and likely” would move their assets to offshore accounts without an order in place preventing them from doing so.
In addition to preventing defendants from passing off a fake Nike product as genuine, the temporary restraining order allows Nike access to detailed information about their company. It orders third-party marketplaces like AliExpress and Amazon to deliver expedited discovery to sellers at Nike’s request. This includes documents relating to the identity of the defendants, their contact details, sales data, registration history and financial accounts.
The temporary restraining order prohibits the defendants from transferring assets out of their financial accounts. It also orders third-party marketplaces in which they operate to locate all funds held by sellers and prevent them from transferring money.
“The defendants in this case hold most of their assets in offshore accounts,” a Nike attorney wrote in a memo in support of the order, “making it easier to conceal or dispose of assets, which which will render a Nike accounting meaningless”.
In a memo filed in court last week, Nike lawyers said financial accounts linked to the sellers’ aliases had been frozen.
Now Nike wants to extend the relief granted in its temporary restraining order with a preliminary injunction that it says is substantially identical. Nike’s proposed preliminary injunction would unseal the original list of defendants, temporary restraining order and another sealed exhibit in the case. The brand’s lawyers will present its application for interim relief at a hearing on Tuesday morning.