Last week, the U.S. Court of Appeals for the Federal Circuit issued an opinion in ABC Corp. I v. Partnership and Unincorporated Associations Identified on Schedule “A”, No. 2021-2150 (October 28, 2022), vacating the district court’s entry of a preliminary injunction.
Plaintiffs filed suit asserting infringement of four design patents against, among others, Gyroor-US. Plaintiffs, however, did not immediately serve Gyroor-US with process. Prior to service being completed on Gyroor-US, the district court entered a preliminary injunction against the defendants, including Gyroor-US. Several months later, Plaintiffs moved to amend their Complaint to add defendants GaodeshangUS, Fengchi-US, and Urbanmax. The Court granted that amendment, meaning the three new defendants would also be bound by the injunction, despite not having been served with process and not having had notice of the injunction. Gyroor-US, GaodeshangUS, Fengchi-US, and Urbanmax (collectively “Defendants”) appealed.
The Federal Circuit began by assessing its jurisdiction over the appeals, first discussing the appeal brought by GaodeshangUS. That notice of appeal referenced the preliminary injunction order but did not reference the order granting amendment of the Complaint to add GaodeshangUS as a defendant. The Court explained that “[a] mistake in designating the judgment appealed from is not always fatal, so long as the intent to appeal from a specific ruling can fairly be inferred by probing the notice and the other party was not misled or prejudiced.” Here, the Court found no prejudice and interpreted the appeal to reference both Orders, thus confirming its jurisdiction.
Addressing the merits, the Court laid out the applicable legal standard, noting that grant of a preliminary injunction is reviewed for abuse of discretion using the law of the regional circuit. It explained that Rule 65 allows entry of a preliminary injunction only with notice to the adverse party. That notice requirement “implies a hearing in which the defendant is given a fair opportunity to oppose the application and to prepare for such opposition.” The Court held the district court’s entry of a preliminary injunction against Defendants violated Rule 65 because Defendants were not given advance notice or an opportunity to oppose the order. The Court rejected the argument that Gyroor-US received notice when Amazon froze its account because freezing an account did not qualify as notice of the motion for a preliminary injunction such that Gryoor-US had an opportunity to oppose.