Versah, LLC et al v. UL Amin Industries et al

Filing 10

ORDER granting in part and denying in part 4 Motion for a temporary restraining order and other relief. Signed by District Judge Terrence G. Berg. (DPer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
VERSAH, LLC, and HUWAIS IP
HOLDING LLC,

2:20-cv-12657-TGB-RSW

Plaintiff,

HON. TERRENCE G. BERG

v.

ORDER GRANTING IN PART
AND DENYING IN PART
PLAINTIFFS’ MOTION FOR A
TEMPORARY RESTRAINING
ORDER AND OTHER RELIEF
(ECF. 4)

UL AMIN INDUSTRIES, and
HAMMAD ASHIQ,
Defendant.

Plaintiffs Versah, LLC and Huwais IP Holding LLC, the owner of
the trademarks and exclusive license of Densah® Burs Kits, medical
devices used during oral surgery to prepare bone for the insertion of
dental implants, are seeking a temporary restraining order against
Defendants, whom they allege are engaged in manufacturing,
distributing, or selling counterfeit Densah® Burs Kits. See ECF No. 1,
PageID.13. In a Complaint filed together with their motion seeking
injunctive relief, Plaintiffs allege that Defendants’ actions constitute: (1)
copyright infringement under the Copyright Act; (2) trademark
infringement and counterfeiting under § 32 of the Lanham Act; (3)
unfair competition and false designation of origin under § 43(a) of the
Lanham Act; (4) unfair competition and false designation of origin
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under § 43(a) of the Lanham Act for trade dress; and (5) unfair
competition under Michigan Compiled Laws § 445.903.
Before the Court is Plaintiffs’ motion under Federal Rule of Civil
Procedure 65(b) for a preliminary injunction, temporary restraining
order, asset restraining order, expedited discovery order, and order
permitting service by alternative means, filed on September 29, 2020.
The Court held an ex parte hearing on this matter on October 6, 2020.
Plaintiffs submitted supporting materials the Court had requested on
October 8, 2020.
Having reviewed the pleadings, supporting affidavits, and other
records submitted in support of the motion, and carefully considered the
arguments made at the ex parte hearing, the Court will DENY
Plaintiffs’ motion with regard to the temporary restraining order, asset
restraining order, expedited discovery order, but will GRANT service
by alternative means. The Court will also order that the record in this
case shall be unsealed.
LEGAL STANDARD
Plaintiffs have filed this motion pursuant to Federal Rule of Civil
Procedure 65, requesting that the Court grant a temporary restraining
order and other relief without notice. Under Federal Rule of Civil
Procedure 65(b), the court may issue a temporary restraining order
without notice to the adverse party if:

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(A) specific facts in an affidavit or a verified complaint clearly
show that immediate and irreparable injury, loss, or damage will
result to the movant before the adverse party can be heard in
opposition; and
(B) the movant's attorney certifies in writing any efforts made to
give notice and the reasons why it should not be required.
Fed. R. Civ. P. 65(b). “The Supreme Court has stated that the Rule
65(b) restrictions ‘on the availability of Ex parte temporary restraining
orders reflect the fact that our entire jurisprudence runs counter to the
notion of court action taken before reasonable notice and an opportunity
to be heard has been granted both sides of a dispute.’ ” Reed v.
Cleveland Bd. of Educ., 581 F.2d 570, 573 (6th Cir.1978) (quoting
Granny Goose Foods, Inc. v. Brotherhood of Teamsters, 415 U.S. 423,
439, (1974)). As such, an ex parte temporary restraining order is “only
appropriate where the applicant would face irreparable harm so
immediate that it would be improper to wait until after a preliminary
injunction hearing to enjoin the non-movant's conduct.” Erad v.
Johnson, 905 F.Supp.2d 782, 791 (E.D. Mich. 2012).
As described in Federal Rule of Civil Procedure 65(b), there are
two circumstances which would justify the Court proceeding ex parte:
(1) where notice to the adverse party is impossible, and (2) in more
limited circumstances, where “notice to the defendant would render
fruitless further prosecution of the action.” First Tech. Safety Sys., Inc.
v. Depinet, 11 F.3d 641, 650 (6th Cir. 1993). “In order to justify
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proceeding ex parte because notice would render further action
fruitless, the applicant must do more than assert that the adverse party
would dispose of evidence if given notice.” Id. Instead, a party trying to
proceed ex parte “must support such assertions by showing that the
adverse party has a history of disposing of evidence or violating court
orders or that persons similar to the adverse party have such a history.”
First Technology, 11 F.3d at 651.
EX PARTE TEMPORARY RESTRAINING ORDER
Plaintiffs claim that an ex parte temporary restraining order is
necessary because if Defendants were provided notice of the complaint,
“they would likely cancel accounts, dispose of or hide their business
records, transfer or otherwise dispose of assets obtained as a result of
their counterfeiting activities, and move the locations of their
counterfeiting operations.” ECF No. 4, PageID.109. During the hearing
Plaintiffs provided a detailed presentation to the Court consisting of 85
slides. ECF No. 9-2. To support the assertion that ex parte relief was
necessary, Plaintiffs utilized maps to describe the geographic region and
close proximity of multiple manufacturing sites where they believe the
counterfeit kits are being produced (ECF No. 9-2, PageID.138),
described how Plaintiffs had purchased a counterfeit kit (ECF No. 9-2,
PaeID.168), showed records containing inconsistent addresses for
Defendant Ul Amin (ECF No. 9-2, PageID.190), explained the lack of
FDA-compliant packaging and labeling on the Ul Amin products (ECF
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No. 9-2, PageID.176), and provided an email from a dentist who
inquired as to whether the allegedly counterfeit kit was the same as the
one produced by Versah (ECF No. 9-2, PageID.181). Additionally,
Plaintiffs provided testimony of Todd Marshall, the Chief Operating
Office of Versah. Mr. Marshall described Plaintiffs’ efforts over the last
five years to shut down the sites of counterfeit sellers on various online
marketplaces such as eBay. Mr. Marshall also described the defects he
observed in the drill bits from the kit purchased from Ul Amin and the
potential harm to patients that might occur if these products were used.
See ECF No. 9-2, PageID.173, 174. The Court directed Plaintiffs to
submit the slide presentation and an explanatory affidavit by Mr.
Marshall, which together largely summarize the evidence presented
during the hearing. See ECF No. 9.
While this evidence generally supports the claims in Plaintiff’s
complaint, it does not demonstrate that Defendants would destroy
evidence or move assets if they received notice of the action. For
example, Plaintiffs admitted they had no direct evidence that Ul Amin
would destroy evidence nor had they previously seen Defendants
attempt to hide assets. In fact, a law firm representing Plaintiffs in
matters of intellectual property successfully contacted Hammad Ashiq
via email in April of 2019 to demand that Ul Amin cease and desist all
sales of its Osseodensification Bur Kits. ECF No. 9-2, PageID.186.
Rather than disappear, Mr. Ashiq responded to the message, denied the
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accusations of copyright infringement and requested Plaintiffs or
Plaintiffs’ attorneys to brief Ul Amin on the alleged infringement
because Defendants were “willing to workout things positively” if the
objection to the product made sense. Id. at PageID.187. Plaintiffs
additionally admitted that they have received follow up
communications from the email address associated with Mr. Ashiq.
Despite having been notified of potential copyright claims in 2019, Mr.
Ashiq does not appear to have changed his email address, removed the
website selling the alleged counterfeit product, or hidden any assets in
response to the cease and desist letter. The Court also notes that the
affidavit of Mr. Marshall at times relies on “suspicion” rather than
particularized facts in explaining why ex parte relief is necessary. ECF
No. 9-1, PageID.148.
While the evidence supports Plaintiffs’ justifiable concerns
regarding the apparent defects and potential health risks associated
with the Ul Amin kits, these are questions that must be tested by the
adversarial process. To obtain ex parte relief, there must be evidence
demonstrating that Defendant is likely to conceal evidence or hide
assets. See First Technology, 11 F.3d at 652 (“Plaintiff's assertion that
defendants would conceal evidence if given notice because defendants
allegedly misappropriated trade secrets and infringed plaintiff's
copyrights is insufficient to establish that notice to the defendants
would have rendered fruitless further prosecution of the action.”).
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Similarly, the lack of FDA-compliant labeling does not support
Plaintiffs’ concerns regarding destruction of evidence. Even Mr.
Marshall noted that during his time supervising Plaintiffs’ attempts to
takedown accounts selling counterfeit kits on online marketplace, he
had not seen any new Ul Amin kits pop-up under different accounts
after a user was reported and removed.
The case law cited by Plaintiffs arises from distinguishable
circumstances. For example, Plaintiffs cite to Lorillard Tobacco Co. v.
Amana Oil, Inc., where the plaintiff’s ex parte seizure order and TRO
were granted because there was sufficient evidence to find that the
defendant “may destroy, move, [or] hide” counterfeit merchandise. No.
2-10-cv-13296, ECF. No. 8 (E.D. Mich. Aug. 23, 2010). But in Lorrilard,
the plaintiff had filed more than 200 counterfeit cases and there had
been numerous instances of “defaults, the hiding of counterfeit
inventory, failure to respond to discovery, failure to appear at
depositions, violations of restraints, and breaches of settlement
agreements.” No. 2-10-cv-13296, ECF No. 3, PageID.162. Similarly, in
North Atlantic Operating Co. Inc. v. Dmitriy Babenko, this Court
granted an ex parte TRO because the plaintiff provided evidence that
the defendant became evasive when the plaintiff’s undercover
investigators sought to arrange an in-person transaction and the
plaintiff’s reputation was being harmed by several public negative
reviews from customers who purchased the counterfeit products. No. 47

15-cv-14013, ECF No. 4, PageID.137, 142. This is the first time
Plaintiffs have attempted to seek relief through legal proceedings so
there is no evidence of previous behavior in response to complaints or
injunctions. Plaintiffs also only provide evidence of one potential
customer who was confused as to whether the alleged counterfeit kit
was the same as the Versah Osseodensification Burs. ECF No. 9-2,
PageID.181.
Parties seeking ex parte relief must do more than allege that the
adverse party could destroy evidence. First Technology, 11 F.3d at 651
(“Showing that the adverse party would have the opportunity to conceal
evidence is insufficient to justify proceeding ex parte. If it were, courts
would be bombarded with such requests in every action filed. The
applicant must show that the adverse party is likely to take the
opportunity for such deceptive conduct.”). Because Plaintiffs have failed
to present sufficient evidence that providing notice to Defendants
“would render fruitless further prosecution,” the ex parte TRO must be
denied. Id. at 650.
The Court is mindful that the allegations contained in Plaintiffs’
complaint are serious and, if true, Defendants’ alleged conduct could
result in damage to Plaintiffs. While the present record does not justify
granting such relief without reasonable notice to Defendants, this order
does not prevent Plaintiffs from seeking relief from the Court if new
evidence or circumstances arise.
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ALTERNATIVE SERVICE
Plaintiffs also request that the Court allow alternative service
through e-mail. Federal Rule of Civil Procedure 4(f) provides three
methods for service of defendants in foreign countries:
(1) by any internationally agreed means of service that is
reasonably calculated to give notice, such as those authorized
by the Hague Convention on the Service Abroad of Judicial and
Extrajudicial Documents;
(2) if there is no internationally agreed means, or if an
international agreement allows but does not specify other
means, by a method that is reasonably calculated to give
notice:
(A) as prescribed by the foreign country's law for service in
that country in an action in its courts of general
jurisdiction;
(B) as the foreign authority directs in response to a letter
rogatory or letter of request; or
(C) unless prohibited by the foreign country's law, by:
(i)

delivering a copy of the summons and of the
complaint to the individual personally; or

(ii)

using any form of mail that the clerk addresses
and sends to the individual and that requires a
signed receipt; or

(3) by other means not prohibited by international agreement, as
the court orders.

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Fed. R. Civ. P. 4(f). “’The Sixth Circuit has not addressed whether
there is a hierarchy or preference among Rule 4(f)'s methods of service.’
But in a published decision, a district court within the Sixth Circuit
agreed that ‘Rule 4(f)(3) is neither a last resort nor extraordinary relief.
It is merely one means among several which enables service of process
on an international defendant.’” Gamboa v. Ford Motor Co., 414
F.Supp.3d 1035, 1039 (E.D. Mich. 2019) (quoting Slay v. IB Travelin, Inc.,
2019 WL 572877, at *2 (W.D. Tenn. Feb. 12, 2019; Lexmark Int’l, Inc. v.
Ink Techs. Printer Supplies, LLC, 291 F.R.D. 172, 174 (S.D. Ohio 2013)).
However, “even if Rule 4(f) does not establish a preferred method of
service among its options, many courts do require, as a factor in weighing
whether to exercise its discretion and allow substituted service, a
showing that reasonable efforts to serve the defendant have already been
made, and that the Court’s intervention will avoid further burdensome
or futile attempts at service.” Id. at 1040 (quoting Phoenix Process Equip.
Co. v. Capital Equip. & Trading Corp., 250 F.Supp.3d 296, 306-07 (W.D.
Ky. 2017)). District courts are afforded “wide discretion” to order service
under Rule 4(f)(3) as long as the method of service is not prohibited by
international agreement and it comports with due process. BBK Tobacco
& Foods, LLP v. Gooshelly, 2020 WL 2315879, at *2 (E.D. Mich. 2020)
(quoting U.S. Commodity Futures Trading Comm'n v. Majestic Enters.
Collision Repair, Inc., 2011 WL 767890, at *3 (N.D. Ohio Feb. 28, 2011).

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Pakistan and the United States are both signatories to the Hague
Convention, which applies to the service of civil judicial documents
abroad. BP Products North America, Inc. v. Dagra, 236 F.R.D. 270, 271
(E.D. Va. 2006) (noting “[T]he Hague Convention does not apply when a
defendant's address is unknown.”). Plaintiffs have not attempted to serve
Defendant under the Hague Convention, and instead are seeking to serve
the company via email under Rule 4(f)(3) because the exact address of
Defendant is unknown. Plaintiffs are correct that previous courts have
found that service by email does not violate the Hague Convention and
that Sixth Circuit courts have permitted service by email in cases where
Defendants have conducted business online. Liberty Media Holdings,
LLC v. Marione, 2010 WL 1154316 (E.D. Mich. 2010); Gamboa, 414
F.Supp.3d at 1042; BBK Tobacco & Foods, LLP, 2020 WL 2315879, at *2.
As support for alternative service, Plaintiffs have established that
there is no physical address on the website where the alleged counterfeit
product is sold and the addresses on the product packaging and receipts
are inconsistent and unreliable. ECF No. 4, PageID.122. Plaintiffs have
also established that Defendants utilize email addresses associated with
the website and product at issue in order to communicate about business.
Because the physical address of Defendants is unknown and Plaintiffs
have successfully communicated with Defendants through e-mails, the
Court concludes that service of process by email would be the most

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effective way to ensure Defendants receive notice of the claims against
them.
Therefore, the Court will permit alternative service through the
email addresses provided in Plaintiffs’ motion. ECF No. 4, PageID.123.
Since Federal Rule of Civil Procedure 4(l)(2) requires proof of service
completed abroad, the Court will require Plaintiff to utilize a read-receipt
or email service company that can confirm receipt of the service emails.
Liberty Media Holdings, LLC, 2010 WL 11545316 at *4.
CONCLUSION
It is hereby ORDERED that Plaintiffs’ Motion for an Ex Parte
Temporary Restraining Order (ECF No. 4) is DENIED without
prejudice;
It is further ORDERED that Plaintiffs may effectuate service on
Defendants by sending a copy of the complaint and summons via email
to “[e-mail]” and “[e-mail]”, using the readreceipt function or an email service company that will supply proof of
service. Plaintiffs are directed to file a proof of service with the Court;
It is further ORDERED that Plaintiffs’ attorney shall include a
copy of this Order when effectuating service upon Defendants within
seven (7) days of the date of this Order;
It is further ORDERED that, upon successful completion of service
of process, the parties shall immediately contact the Court to schedule a

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hearing date on Plaintiffs’ Motion for Preliminary Injunction (ECF No.
4);
WHEREFORE, for the reasons set forth herein, the Court does
hereby direct the Clerk that pleadings and record in this matter shall be
UNSEALED.
SO ORDERED.

Dated: October 22, 2020

s/Terrence G. Berg
TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE

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