The Northern District of Illinois is a hotbed for lawsuits where trademark owners sue dozens, if not hundreds, of online retailers. Suing in groups (known as joinder) drives down the cost of filing. Rather than 79 cases x $400 each, a plaintiff pays only one $400 filing fee. In these cases, foreign retailers often find their accounts, such as PayPal accounts, immediately seized. This often forces the online retailers into abandoning those assets do the trademark owners or spending money to recover some portion of their account and settle the dispute.

We have consulted on these cases several times. The common thread has been balancing the cost of testing legal theories against the amount held in the account. Having experience with mass joinder BitTorrent cases, Jonathan often remarked that a motion to dismiss based on improper joinder might be appropriate. As it turns out, it appears he was right.

On January 27th, 2020 the Northern District of Illinois, on its own – without a motion from any defendant – determined the joinder of 79 defendants was improper. As the Court pointed out, the standard for joinder (ed. and cost savings) is not met simply because the same trademark was infringed. Instead, a plaintiff must show the alleged infringement stems from “the same transaction, occurrence, or series of transactions or occurrences” along with a common question of law or fact. The boilerplate allegations filed by Estee Lauder Cosmetics Ltd. and Make-Up Art Cosmetics Inc. could not show as much.

We are here to help you with any trademark matters , especially if you are a foreign retailer that has had your accounts seized by a trademark owner. Feel free to contact us for a free consultation by phone or online meeting.

Estée Lauder Cosmetics Ltd. and Make-Up Art Cosmetics Inc. v. P’ships & Unincorporated Assocs. Identified on Schedule A, Case No. 19-CV-7878 (N.D. Ill. Jan. 20, 2020)