Wimo v. Ebay Trademark Complaint PDF

Case 8:15-cv-01330-JLS-KES Document 58 Filed 11/20/15 Page 1 of 117 Page ID #:391
1 R. Rex Parris, Esq. (SBN 96567)
rrparris@rrexparris.com
2 Kitty K. Szeto, Esq. (SBN 258136)
kszeto@rrexparris.com
3 R. REX PARRIS LAW FIRM
43364 10th Street West
4 Lancaster, CA 93534
Telephone: (661) 949-2595

(661) 949-7524
5 Facsimile:
6 Deborah A. Klar, Esq. (SBN 124750)
dklar@dklarlaw.com
7 2934 1/2 Beverly Glen Circle
Bel Air, California 90077
8 Telephone: (310) 858-9500

9 Attorneys for Plaintiff
10
WIMO LABS, LLC
UNITED STATES DISTRICT COURT
11
CENTRAL DISTRICT OF CALIFORNIA
12
13
14
15
Wimo Labs, LLC

Plaintiff,
CASE NO.: 8:15-CV-01330

FIRST AMENDED COMPLAINT
v.
16 eBay, Inc., a Delaware Corporation;
PayPal Holdings, Inc., a Delaware
17 Corporation, Hoonie S. Kang, an
individual; D.I.R. Enterprises, Inc., a
18 California Corporation; and Simon

19
20
Chen, an individual,
Defendants.
21
22
23
24
25
26
27
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COMPLAINT
TABLE OF CONTENTS
PAGE
2
3
NATURE OF THE ACTION ...................................................................................... 1
4 THE PARTIES ............................................................................................................ 3

5
A.
eBay Defendants ..................................................................................... 3
B.
Seller Defendants .................................................................................... 4
JURISDICTION .......................................................................................................... 5
8
9
VENUE
................................................................................................................. 5
10 FACTUAL ALLEGATIONS ...................................................................................... 6

11
C.
Plaintiffs Business and Marks ............................................................... 6
12
D.
Counterfeiting and the Internet ............................................................. 11
13
E.
eBays Business .................................................................................... 12
F.
Intentional Use on ebay.com of Counterfeit Marks That

Infringe On Plaintiffs Marks By Defendants....................................... 15
14
15
16
17
Unauthorized Use of Plaintiffs Marks By Seller 1................................................... 21

18
19
20 Unauthorized Use of Plaintiffs Marks By eBay ....................................................... 55

21 The Counterfeit Report Confirms Unauthorized Use of Plaintiffs
22
Marks by eBay Sellers and Knowing Contribution by eBay. ................................... 60
23 Unauthorized Use of Plaintiffs Marks In Connection with
Listings for LUNATIK EPIK. ................................................................................ 61
24
25
G.
PayPals Processing of Counterfeit Sales Through ebay.com .............. 62
26
27
28
i
COMPLAINT
TABLE OF CONTENTS
PAGE
H.
eBay Is an Indispensable Part of the Enterprise that

Sells Obvious Counterfeit Products that Infringe
on Plaintiffs Trademarks, Resulting in Consumer
Confusion and Harm to Plaintiff ........................................................... 67
I.
eBays Unwillingness to Refrain from Trademark Infringement ......... 68
J.
The Financial Services Provided by eBays Partner,

PayPal, to Unauthorized Sellers Materially Aid and
Abet the Enterprise that Trafficks In The Sale
of Counterfeit Goods ............................................................................. 73
3
4
5
8
9
10
FIRST CAUSE OF ACTION AGAINST eBAY AND THE

11 SELLER DEFENDANTS (Trademark Infringement Under
Sections 32 and 43(a) of the Lanham Act, 15 U.S.C. 1114, 1125(a)) ................ 75
12
13 SECOND CAUSE OF ACTION AGAINST eBAY (Contributory
Trademark Infringement and Counterfeiting Under the Lanham Act) .................... 77
14
THIRD CAUSE OF ACTION AGAINST eBAY AND THE

SELLER DEFENDANTS (Trademark Dilution Under Section 43(c)
16 of the Lanham Act, 15 U.S.C. 1125(c))................................................................. 82
15
17 FOURTH CAUSE OF ACTION AGAINST eBAY (Direct

18 Trademark Infringement Through Initial Interest Confusion) .................................. 84
19 FIFTH CAUSE OF ACTION AGAINST ALL DEFENDANTS
20
(Violations of Racketeer Influenced and Corrupt Organizations Act

(RICO) 18 U.S.C. 1962(c)) ................................................................................. 85
21
The RICO Enterprise ................................................................................................. 85

22
23
Pattern of Racketeering Activity ............................................................................... 89
24 Pattern of Racketeering Activity: Numerous Instances of Trafficking
in Counterfeit Goods In Violation of 18 U.S.C. 2320(a)(1).................................. 90

25
26
Pattern of Racketeering Activity: Multiple Instances of Wire

Fraud In Violation of 18 U.S.C. 1343 ................................................................... 97
27
28
ii
COMPLAINT
TABLE OF CONTENTS
PAGE
2
3
Summary of the Pattern of Racketeering Activity Alleged

Against Each RICO Defendant................................................................................ 104
4
5
DEMAND FOR JURY TRIAL ............................................................................... 110
6
7
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10
11
12
13
14
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iii
COMPLAINT
Plaintiff Wimo Labs, LLC, by their attorneys, the R. Rex Parris Law Firm and
2 Deborah A. Klar, for their complaint against Defendant eBay, Inc., alleges as follows:
NATURE OF THE ACTION
3
4
1.
The Internet has opened the door for unauthorized merchants to reach a
5 wide range of consumers in their efforts to sell obvious counterfeit versions of

6 products that are not manufactured, licensed, or approved by the duly registered
7 owner(s) of the products trademark(s) (Fake Products). Counterfeiting is a $1
8 trillion global criminal enterprise, and e-commerce websites, including eBay, are an
9 ideal platform to distribute counterfeits directly to the consumer. e-Commerce
10 websites reap billions in revenue, and profit from transaction fees for the counterfeit
i
11 product web sales. The sale of products that infringe on U.S. trademarks threaten
12 the health and safety of American consumers and the U.S. economy. In 2013, the
13 total value of customs-related Seizures (MSRP) in the United States was $1.74
ii
14 Billion, which Plaintiff is informed and believes represents only a small fraction of
15 the counterfeit products shipped into the United States.
16
2.
This is an action against eBay, Inc. (eBay), PayPal, Inc. (PayPal)
17 (formerly eBays wholly-owned subsidiary now publicly-traded PayPal Holdings,

18 Inc.), and various unauthorized sellers registered on www.ebay.com (Seller
19 Defendants). The action arises in connection with eBays direct and contributory
20 infringement on Plaintiffs Marks notwithstanding reports by Plaintiff and others to
21 eBay that there have been more than five thousand intentional unlawful listings on
22 ebay.com by more than two thousand ebay.com registered sellers (Unauthorized
23 Sellers)
iii
of obvious counterfeit Lunatik products (sometimes referred to herein as
24 Fake Lunatik Products) that display Plaintiffs trademarks, in violation of the

25 Trademark Act of 1946, 15 U.S.C. 1051, et seq. (the Lanham Act), the Racketeer
26 Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(c), et seq. (RICO).
27
28
1
COMPLAINT
3.
Since February 2013, Plaintiff has sent eBay more than 5,557 Notices of
2 Claimed Infringement (NOCI) by at least 2,200 individual ebay.com registered

3 sellers.
The NOCI are broken down by product and location of product. At all
4 relevant times, eBay had direct control and the ability to monitor ebay.com, the
5 instrumentality used by ebay.com registered sellers to infringe on Plaintiffs Marks,
6 and has had reasonable means available to withdraw its services and the services of
7 PayPal so that ebay.com could not be used by Unauthorized Sellers to directly
8 infringe on Plaintiffs trademarks. For example, it is reported that the most successful
9 avenue for shutting down a counterfeiter is to cut off its flow of funding from credit
10 card companies and banks, such as the flow of funding facilitated by eBay and
11 PayPal.
12
4.
Recognizing eBays role and expecting, among other things, that eBay
13 would use the reasonable means they have available to take prophylactic and other
14 action against Unauthorized Sellers continuing trademark infringement, the
15 Plaintiffs NOCIs request eBays cooperation in identifying to [Plaintiff] [eBays]
16 source for the infringing products.
17
5.
Instead of cooperating or taking effective remedial action against
18 recidivist counterfeiters, (i) eBay, and PayPal, do not take the reasonable means they
19 have available to withdraw their services to Unauthorized Sellers; and (ii) eBay
20 continues to allow ebay.com and PayPal to be used by thousands of Unauthorized
21 Sellers to advertise Fake Products that display counterfeit Lunatik trademarks that
22 infringe on Plaintiffs trademarks.
23
6.
Plaintiff is informed and believes that eBay and PayPal intentionally turn
24 a blind eye to the infringing activity on ebay.com of many of its sellers.
Because
25 eBay and PayPal cannot continue to enjoy the enormous profits derived from the
26 proliferation of Fake Products sold on the eBay website if the intentional infringing
27 unauthorized sellers are excluded, eBays policies and practices are designed to,
28
2
COMPLAINT
1 among other things, (i) promote the unlawful activities of its unauthorized sellers by
2 soliciting eBay buyers to purchase Fake Lunatik Products knowingly using listings
3 that infringe on Plaintiffs Marks; and (ii) ignore evidence of the unlawful activities
4 by its unauthorized sellers. On account of eBays policies and practices, eBay and
5 PayPal have reason to know and suspect that users of ebay.com are infringing on
6 legitimate rights of trademark holders, such as Plaintiff.
THE PARTIES
7
8
7.
Plaintiff Wimo Labs, LLC, doing business as Lunatik (Lunatik or
9 Plaintiff) is a Delaware limited liability company registered to do business in

10 California with its principal place of business in Irvine, California.
Plaintiff holds
11 multiple federal registrations in its LUNATIK mark.

12
A.
eBay Defendants
13
8.
Defendant eBay Inc. (the Company or eBay) is a Delaware
14 corporation with its principal place of business located in San Jose, California. eBay
15 is an American multinational corporation and e-commerce company, providing
16 consumer to consumer & business to consumer sales services via the Internet.
17
9.
PayPal Holdings, Inc. (PayPal) was incorporated in Delaware in
18 January 2015 for the purpose of owning and operating eBays Payments business in
19 connection with the separation and distribution described in the S-1 Registration
20 Statement recently filed by eBay with the Securities & Exchange Commission. The
21 address of PayPals principal executive offices is PayPal Holdings, Inc., 2211 North
22 First Street, San Jose, California 95131. Before its recent spin-off, PayPal was a
23 wholly-owned subsidiary of eBay. Established in 1998, PayPal had its IPO in 2002,
24 and became a wholly owned subsidiary of eBay later that year.
In 2014, PayPal
25 moved $228 billion in 26 currencies across more than 190 nations, generating total
26 revenue of $7.9 billion (44% of eBays total reported profits). It was announced on
27 September 30, 2014, that eBay would spin off PayPal into a separate publicly traded
28
3
COMPLAINT
1 company. PayPal started trading on NASDAQ on or about July 20, 2015.
PayPal
2 reports that after the spin-off, [it] will derive a significant amount of revenues from
3 eBay. Plaintiff is informed and believes that based on agreements between PayPal
4 and eBay, post spin-off, there will be no material change in the nature and scope of
5 the services that PayPal provides to buyers and sellers who process transactions on
6 ebay.com.
7
B.
Seller Defendants
10.
Defendant Hoonie S. Kang (Kang or Seller 1), identified as eBay
9 Seller 18074, is located in Stevenson Ranch, California according to eBay registered

10 user information.
Kangs eBay user I.D. is scvhills. According to ebay.com,
11 [b]ased in United States, [Seller 1] has been an eBay member since March 22,
12 2000.
Plaintiff is informed and believes that Kang resides in Beverly Hills,
13 California and currently is a partner with Kearny Real Estate Company (Kearny)
14 located in Los Angeles, California. Kang reportedly has been with Kearny since 2001
15 where his responsibilities include the origination and execution of acquisitionsIn the
16 past two years, Kang reportedly played a pivotal role in the acquisitions of over eighty
17 non-performing loans totaling over $400 million. He continues to serve as the asset
18 manager for many of these assets.
19
11.
Defendant D.I.R. Enterprises, Inc. (DIR or Seller 2), is located in El
20 Monte, California. Seller 2 has registered with Defendant PayPal stating that it uses or
21 has used at least
the following email addresses:
22 zhong.beejob@gmail.com,
maizhuhui@hotmail.com,
gaadaptors@gmail.com,
hjx928@163.com,
23 haha2yaya@gmail.com, alanmak@tom.com. Seller 2 has used multiple eBay user

24 IDs in connection with its sale of fake Lunatik products, including the following:
25 accessory-innovation
(previously identified as Seller 4), cyber-innovation
26 (previously identified as Seller 6), usa-cyberlink (previously identified as Seller

27 7), usacyber (previously identified as Seller 8), usgadget-tech (previously
28
4
COMPLAINT
1 identified as Seller 9), laptop-cyber (previously identified as Seller 10), bearbear2 2010 (previously identified as Seller 11).
Seller 2 has also been identified on
3 ebay.com using eBay Seller Nos. 40101, 37283, 41423, 32166, 22596, and 24768.
4
12.
Defendant Simon Chen (Chen or Seller 3) is located in Shanghai.
5 Seller 3 has registered with Defendant PayPal stating that he uses or has used at least
6 the
following
email
addresses:
7 newcomdigicsa@gmail.com,
8 newcomdigifr@gmail.com,
9 hid911@hotmail.com,
10 anson7878@tom.com,
heywholesale@gmail.com,
newcomdigihey@gmail.com,
newcomdigiebay@gmail.com,
netled22@gmail.com,
hid911@gmail.com,
lvyingmingpp@yahoo.com.cn,
netlamp@gmail.com,
newcomdigide@gmail.com,
11 xenon68@gmail.com,
hiking0978@merchantrun.com,
12 wrongpay@gmail.com,
newcomdigiebay@gmail.com,
xenon30@gmail.com,
newcom68@gmail.com.
13 Seller 3 has used multiple eBay user IDs in connection with his sale of fake Lunatik
14 products, including, the following:
ledno3 and netled.
Seller 3 has also been
15 identified on ebay.com as eBay Seller Nos. 14394 and 32903.
JURISDICTION
16
17
13.
This is an action arising under the Trademark Act of 1946, 15 U.S.C.
18 1051, et seq. (the Lanham Act), the Racketeer Influenced and Corrupt
19 Organizations Act, 18 U.S.C. 1962(c), et seq. (RICO).
20
14.
This Court has federal question jurisdiction over this action under 15
21 U.S.C. 1121(a) (action arising under the Lanham Act), 28 U.S.C. 1331 (federal
22 question), 1338(a) (any Act of Congress relating to patents or trademarks), and
23 1338(b) (action asserting claim of unfair competition joined with a substantial and
24 related claim under the trademark law).
VENUE
25
26
15.
Venue is proper in this District under 28 U.S.C. 1391(b), (c) and (d)
27 as Defendants transact business in Los Angeles County, California, a substantial part

28
5
COMPLAINT
1 of the events or omissions giving rise to the claim occurred within this District, and
2 one or more of the Seller Defendants has its principal place of business in this district.
FACTUAL ALLEGATIONS
3
4
C.
Plaintiffs Business and Marks
16.
Plaintiff is the owner of the right, title and interest in and to, inter alia,
6 the following federally registered trademarks and/or service marks:

7
8
9
10
11
U.S.
Registration
No.
4,075,222
Mark
Reg. Date
Goods Covered (summarized)
LUNATIK
Watch bands for holding PDAs
4,296,576
LUNATIK
4,262,488
TAKTIK
Dec. 20,
2011
Feb. 26,
2013
Dec. 18,
2012
12
Cases for electronic devices

Mobile phone cases
13
14
4,542,506
15
16
17
17.
(Lunatik
Logo
Mark)
June 3, 2014
Cases for electronic devices (cell

phones, PDAs (e.g., smart watches)
Annexed hereto as Exhibit 1 are true and correct copies of the United
18 States Patent and Trademark Office (PTO) registration certificates evidencing

19 Plaintiffs ownership of these trademarks and printouts from the PTOs website
20 setting
forth the status of these trademarks. Each mark was first used in
21 commerce on or before the first date of use set forth in Exhibit 1. All of the
22 registrations set forth in Exhibit 1 are valid and subsisting, and Lunatik also owns
23 common law rights in the above and other marks for use in connection with Lunatik
24 Products. These registered and common law trademarks are collectively referred to as
25 the Lunatik Marks or Plaintiffs Marks.
26
18.
The Lunatik Marks are in full force and effect. Lunatik has never
27 abandoned the Lunatik Marks nor has Lunatik ever abandoned the goodwill of its
28
6
COMPLAINT
1 businesses in connection thereto. Lunatik intends to continue to preserve and maintain

2 its rights with respect to the Lunatik Marks.
3
19.
Lunatik does not sell on ebay.com, and does not authorize any of its
4 licensed distributors to sell on ebay.com.

5
20.
Lunatiks website offers various types of
6 products for sale to Internet users.
Lunatik designs
7 premium products that transform and enhance the users

8 mobile, digital life.
As to its iPhone cases, Lunatik
9 categorizes its iPhone cases into different types for iPhone

10 4s, iPhone 5/5s, iPhone 5c, iPhone 6, and iPhone 6 Plus.
11 Lunatik also sells two rugged protection systems for Apple
12 watches, EPIK and EPIK Aluminum. Each product has a
13 different appearance, function, and purpose.
Shown below is a true and accurate
14 screenshot of Lunatiks website at www.lunatik.com on which its iPhone cases and

15 EPIK products are sold.
16
21.
The authentic TAKTIK Extreme for iPhone 4 (TAKTIK Extreme
17 for iPhone 4s), manufactured by Plaintiff, is Lunatiks Premium Protection System

18 for the iPhone 4s. The MSRP for TAKTIK Extreme for iPhone 4s is $99.95.
22.
19
of
Shown to the left is an
20
image
an
authentic
21
Extreme for iPhone 4 with the Corning
22
Gorilla Glass Impact Lens For Screen
23
Protection
24
federally registered trademark names and
25
logo mark. See Ex. 1 (Lunatik U.S. Reg.
which
bears
TAKTIK
Lunatiks
26 Nos. 4,296,576, 4,262,488 and 4,542,506). Lunatik makes the TAKTIK Extreme
27 for iPhone 4s with a ballistic-grade polymer (plastic) and only sells it in white and
28
7
COMPLAINT
1 black. TAKTIK Extreme for iPhone 4s is designed to exceed user expectations in

2 the rugged case market. TAKTIK Extreme for iPhone 4s balances strong iconic
3 aesthetics with innovative performance features to transform the iPhone 4s through
4 bold design, precision engineering and the best performance materials available.
5
23.
The authentic LUNATIK TAKTIK Extreme cell phone case for
6 iPhone 5s (TAKTIK Extreme for iPhone 5s) is manufactured and distributed by

7 Plaintiff. Originally the MSRP was $129.95. In July, 2015, the MSRP was lowered
8 to $89.95.
9
24.
10 image
Shown to the right is an
of an authentic TAKTIK
11 Extreme
for iPhone 5s with the
12 Corning Gorilla Glass Impact Lens

13 For Screen Protection which bears
14 Lunatiks federally registered trademark
15 names and logo mark.
See Ex. 1
16 (Lunatik U.S. Reg. Nos. 4,296,576, 4,262,488 and 4,542,506). Lunatik makes the
17 TAKTIK Extreme for iPhone 5s with a ballistic-grade polymer (plastic) and only
18 sells it in white with a gold port cover, and black with a red port cover. TAKTIK
19 Extreme for iPhone 5s has an upgraded rear bezel to be fully compatible with the new
20 5s iSight camera and flash. TAKTIK Extreme for iPhone 5s delivers refined and
21 ultra-rugged protection from impact, drops and screen damage as well as water and
22 dust ingression.
Featuring an industry-first Corning Gorilla Glass lens,
23 TAKTIK Extreme for iPhone 5s provides screen protection that does not
24 compromise on touch screen responsiveness.
25
25.
TAKTIK 360 for iPhone 6, manufactured by Plaintiff, is the evolution
26 of Lunatiks most protective case, TAKTIK Extreme (TAKTIK 360). The

27 MSRP for TAKTIK 360 for iPhone 6 is $124.95.
28
8
COMPLAINT
26.
Shown to the left is an image of
an authentic TAKTIK 360 for iPhone 6
with the Corning Gorilla Glass Impact
Lens For Screen Protection which bears
Lunatiks federally registered trademark
names and logo mark. See Ex. 1 (Lunatik
7 U.S. Reg. Nos. 4,296,576, 4,262,488 and 4,542,506). The TAKTIK 360 is made
8 with a ballistic-grade polymer (plastic) and is only available in black.
While
9 maintaining Lunatiks tough standards for impact and drop protection, TAKTIK
10 360 provides enhanced protection from water and dust. Installation is made easier
11 with Lunatiks patent pending compression closure system and single latch closure.
12 The Corning Gorilla Glass lens adds an extra layer of screen protection without
13 compromising a fluid touchscreen experience.
TAKTIK 360 is the ultimate in
14 rugged protection.
15
27.
The EPIK Aluminum for Apple Watch (LUNATIK EPIK) is
16 manufactured by Plaintiff. The MSRP for the LUNATIK EPIK is $139.95.

17
28.
Shown to the right is an image of an
18 authentic LUNATIK EPIK Apple Watch Kit only

19 available for sale on a pre-order basis on Plaintiffs
20 website, which bears Lunatiks federally registered logo
21 mark.
See Ex. 1 (Lunatik U.S. Reg. No. 4,542,506).
22 The packaging for the product bears Lunatiks federally

23 registered trademark name.
24 Reg. No. 4,296,576).
See Ex. 1 (Lunatik U.S.
The LUNATIK EPIK transforms the Apple Watch into a
25 ruggedly refined companion more suited for the abuse an everyday active lifestyle
26 dishes out. It is designed to protect the Apple Watch and provides enhanced tactile
27 control and unobstructed access to the watchs sensor and features.
28
9
COMPLAINT
29.
Plaintiff maintains strict quality control standards for its products.
2 Customers, potential customers, and other members of the public and industry
3 associate Plaintiffs products with high quality materials, style, and functionality.
4 Plaintiffs products are among the most sought after iPhone cases offered for sale in
5 the United States. On information and belief, many consumers purchase Plaintiffs
6 products because of Plaintiffs reputation for durable, long-lasting products
7 characteristics that result from Plaintiffs strict material and manufacturing standards.
8
30.
Shown below is an image of the packaging for TAKTIK Extreme
9 iPhone cases which bears Lunatiks federally registered trademark name and logo
10 mark See Ex. 1 (Lunatik U.S. Reg. Nos. 4,227,706 and 4,542,506) is shown below:
11 Plaintiffs products are displayed in their respective advertising and promotional
12 materials. To date, Plaintiff has spent hundreds of thousands of dollars on advertising
13 and promoting its respective marks and products, and Plaintiff has enjoyed millions of
14 dollars in sales.
15
16
17
18
19
20
21
22
23
24
25
26
27
28
10
COMPLAINT
31.
Plaintiffs continuous and broad use of its respective marks on its
2 products and packaging for the products has expanded their renown and enabled
3 Plaintiffs Lunatik Marks and brand to be one of the best known in the industry
4 particularly with respect to high-end, ultra-protective phone cases. Even eBay itself
5 admits and advertises Lunatiks phone cases as being among the most durable
iv
6 smartphone cases on the market.

7
32.
Plaintiffs reputation is a direct result of its extensive advertising and
8 promotion, concomitant widespread sales, the care and skill utilized in the
9 manufacturing of its products, the uniform high quality of such products sold under or
10 in connection with Plaintiffs Marks, and the public acceptance thereof. Plaintiff has
11 created invaluable goodwill throughout the United States and elsewhere by selling
12 products of consistent dependable quality.
Based on the extensive sales of the
13 Plaintiffs Products and the wide popularity of the Lunatik brand, Plaintiffs Marks
14 have developed a secondary meaning and significance in the minds of the purchasing
15 public, and the services and products utilizing and/or bearing such marks and names
16 are immediately identified with Plaintiff by the purchasing public.
Plaintiffs
17 valuable goodwill and brand value is being blurred and has been tarnished by the
18 rampant infringement alleged herein.
19
D.
Counterfeiting and the Internet
20
33.
Perhaps the single greatest threat to brand owners such as Plaintiff is the
21 global sale of counterfeit products, including products with counterfeit marks that
22 intentionally infringe on the legitimate owners trademarks.
23
34.
Reports introduced into the Congressional Record indicate that
24 counterfeiting costs U.S. businesses between $200 and $250 billion every year and
25 results in 750,000 lost jobs.
Congress has recognized that counterfeits not only
26 present grave risks to the health and safety of consumers of these articles, but have
27 a dire effect on the economy as well.
28
11
COMPLAINT
35.
The Internet has become an increasingly popular way to market products
2 with counterfeit marks to consumers globally and in the United States by providing
3 increased access to customers and allowing the infringing goods to be shipped in
4 small quantities to better evade detection by customs and other law enforcement
5 agencies. The lure of the Internet is easy to understand from the perspective of the
6 sellers of counterfeit and fake products: there is a minimal cost for operating a
7 website, a decreased risk of prosecution and, if the counterfeiters are forced to shut
8 down one online store, they can simply open another.
9
E.
eBays Business
10
36.
Founded in 1995, Defendant eBay, Inc. is the proprietor of
11 www.ebay.com (ebay.com), an Internet-based marketplace that allows those who

12 register with it to purchase goods from and sell goods to one another. Through its
13 aggressive marketing and solicitation, it connects buyers and sellers and enables
vi
14 transactions that are carried out directly between eBay members.
In its auction and
15 listing services, it provides the venue for the sale of goods and material support for
16 the transactions.
vii
eBay is the worlds largest online marketplace with an estimated
17 120 million active users worldwide. In 2012, individual buyers and sellers and
viii
18 businesses sold over $75 billion worth of goods on eBay.
In 2014, eBays
ix
19 operating profit margin was 19.63%.

20
37.
The business of eBay is to enable global commerce and payments on

x
21 behalf of users, merchants, retailers and brands of all sizes. As reported in the eBay
22 Form 10-K for the period ending December 31, 2014 (eBay Annual Report), the
23 technologies and services eBay provides through its website, ebay.com, are designed
24 to enable users and merchants worldwide to organize and offer their inventory for sale
25 and buyers to find, buy and pay for it virtually anytime and anywhere. eBay enables
26 commerce
through three reportable segments: Marketplaces, Payments and
27 Enterprise. According to eBay, the company is only successful when the users and
28
12
COMPLAINT
xi
1 merchants we enable are successful.
eBay reports that it is primarily a
2 transaction-based business that generates revenue from the transactions and

xii
3 payments that it successfully enables.

4
38.
(Emphasis added).
eBays Marketplaces segment includes its core global ecommerce

xiii
5 platform, ebay.com and other localized sites around the world.
eBays
6 Marketplaces offer the following features: (i) ebay.com is a leading commerce

7 platform for users and merchants; (ii) ebay.com provides a variety of access points for
8 consumers to shop virtually anytime, anywhere; and (iii) ebay.com provides a large
xiv
9 selection of inventory globally.

10
39.
eBays Payments segment includes its core payments brand PayPal,
11 which enables individuals and businesses to securely, easily and quickly send and
12 receive payments online and through a broad range of mobile devices in
13 approximately 203 markets worldwide and in 26 currencies as of December 31, 2014.
14 eBays Payments platforms offer the following features: (i) eBay enables payment in
15 the online and physical worlds; (ii) eBays global reach and scale provides value for
16 consumers and merchants; and (iii) eBays payments solutions offer leading fraud
xv
17 prevention and protection.

18
40.
eBay measures it footprint in its addressable market using a metric that
19 it calls Enabled Commerce Volume (ECV). ECV consists of the total commerce
20 and payment volume that runs through eBay platforms which eBay enables on behalf
xvi
21 of its merchants and retailers.
As of December 31, 2014, eBays Marketplaces
22 segment had more than 155 million active buyers and more than 800 million listings
xvii
23 globally, while its Payments segment had 162 million active registered accounts.
24 eBay generates revenue by charging sellers to use its listing services. For any listing,
25 it charges an insertion fee. Fee amounts are based on the terms in effect when the
26 listing goes live and when it renews. If a seller selects more than one category for a
xviii
27 listing, insertion and advanced listing upgrade fees apply for each category.
28
13
COMPLAINT
For
1 any completed sale, it charges a final value fee that ranges from 5.25% to 10% of
2 the final sale price of the item. Sellers have the option of purchasing, at additional
3 cost, features to differentiate their listings, such as a border or bold-faced type.
4
41.
xix
eBays business model and pricing is designed so that its Marketplaces
5 business is successful when its merchants are successful.
eBay reports that the
6 majority of its Marketplace revenue comes from a take rate on the Gross
7 Merchandise Volume, or GMV, of transactions closed on our Marketplaces trading
8 platforms.
xx
In 2014, eBay generated $82.95 billion in GMV. eBay defines GMV as
9 the total value of all successfully closed transactions between users on Marketplaces
10 platforms (excluding eBays classifieds websites, brands4friends and Shopping.com)
11 during the applicable period, regardless of whether the buyer and seller actually
xxi
12 consummated the transaction.

13
42.
At all relevant times, eBay also has generated revenue through PayPal,
14 through which it allows users to process their purchases. As a wholly-owned eBay

15 subsidiary, PayPal deducted, as a fee for each transaction that it processes, 1.9% to
16 2.9% of the transaction amount, plus a flat fee of $0.30. This gave eBay an added
17 incentive to increase both the volume and the price of the goods sold on its website.
18
43.
xxii
Today, under the 5-year operating agreement between PayPal and eBay,
19 eBay is contractually bound to maintain the majority of its GMV (the total volume in
20 dollars of sales on eBay) to be processed through PayPal. Specifically, eBay has
21 guaranteed that 80% of GMV is paid via PayPal, otherwise it will have to pay PayPal
22 restitution.
23
44.
xxiii
The success of the eBay and PayPal business models relies on eBays
24 active promotion and facilitation of the sale of an enormous number of Fake Products
25 through ebay.com. The acts and omissions of eBay and PayPal enable manufacturers,
26 distributors and unauthorized sellers of Fake Products by providing them with a
27 global marketplace for such goods, which variously includes, inter alia, aggressive
28
14
COMPLAINT
1 online
marketing, credit card processing, financing, and shipping services.
2 Recognizing that the sale of Fake Products on ebay.com may significantly contribute
3 to reported profits, eBays and PayPals policies and practices, variously, among other
4 things, (i) promote the unlawful activities of unauthorized sellers by soliciting buyers
5 to purchase Fake Products, and (ii) ignore evidence of the unlawful activities by its
6 unauthorized sellers. On account of eBays policies and practices, it has reason to
7 know and suspect that users of ebay.com are infringing on legitimate rights of
8 trademark holders, such as Plaintiff.
9
45.
eBay and PayPal exercise significant control over the unauthorized
10 sellers means of trademark infringement by means of their significant control over

11 the transactions and listings facilitated by and conducted through ebay.com. Given
12 that control, eBay and PayPal have the ability to, among other things, identify and
13 take action against recidivist counterfeiters based on activities on ebay.com.
14
F.
Intentional Use on ebay.com of Counterfeit Marks That Infringe On

Plaintiffs Marks By Defendants
15
16
46.
eBay expressly recognizes that the protection of a companys intellectual
17 property, including its trademarks (in the case of eBay the trademarks covering the
18 eBay and PayPal names), patents, copyrights, domain names, trade dress and trade
19 secrets as critical to the companys success.
For that reason, eBay aggressively
20 protects its intellectual property rights by relying on federal, state and common law
21 rights in the U.S. and internationally, as well as a variety of administrative
xxiv
22 procedures.
23
47.
eBay acknowledges that the listing or sale by eBay users of items that
24 allegedly infringe the intellectual property rights of rights owners, including pirated or
25 counterfeit items, may harm the business of the lawful rights owners. eBay reports
26 that the listing or sale by our merchants of counterfeit goods, has resulted and may
27 continue to result in allegations of civil or criminal liability for unlawful activities
28
15
COMPLAINT
1 against eBay (including the employees and directors of our various entities) involving
2 activities carried out by users through eBays services. In a number of circumstances,
3 third parties, including government regulators and law enforcement officials, have
4 alleged that eBay services aid and abet violations of certain laws, including laws
5 regarding the sale of counterfeit items.
6
48.
xxv
In addition, eBay reports that allegations of infringement of intellectual
7 property rights, including but not limited to counterfeit items, have resulted in
8 threatened and actual litigation from time to time by rights owners, such as
xxvi
9 Lunatik.
Plaintiffs in these and similar suits seek, among other remedies,
10 injunctive relief and damages.
Statutory damages for copyright or trademark
11 violations could range up to $150,000 per copyright violation and $2,000,000 per
12 trademark violation in the United States.
In the past, eBay has paid substantial

xxvii
13 amounts in connection with resolving certain trademark and copyright suits.

14
49.
eBay expressly acknowledges and agrees that unauthorized copies or
15 fake products that are advertised and appear on its website may infringe on the
16 manufacturers trademark. For example, it is eBays publicly stated position that an
17 item that has a companys name or logo on it, but not made or endorsed by the owner
18 of the trademark, is not allowed on eBay. These kinds of things may infringe on
19 someones copyright or trademark. ebay.com warns: [m]ake sure your listing
20 follows these guidelines. If it doesnt, it may be removed, and you may be subject to
21 a range of other actions, including limits of your buying and selling privileges and
22 suspension of your account.
23
50.
xxviii
Notwithstanding eBays knowledge of these claims and practices by its
24 sellers, eBay publicly admits that it has resisted modifying its business practices
25 because such changes could/would increase costs, lower revenue, make eBays
26 websites and mobile platforms less convenient to customers, and require eBay to
27 spend substantial resources to take additional protective measures or discontinue
28
16
COMPLAINT
1 certain service offerings in order to combat these known and acknowledged user
2 practices.
3
xxix
51.
eBay is well aware that: (i) it directly solicits eBay buyers to purchase
4 obvious counterfeit Lunatik products from its Unauthorized Sellers; (ii) Unauthorized
5 Sellers are using ebay.com to list products that display counterfeit marks that infringe
6 on Plaintiffs trademarks; (iii) eBay has an essential role in these infringements, since
7 it is via ebay.com that the advertisements and offers for sale are communicated by
8 eBay and others to buyers on its site; (iv) given what ebay.com does and does not
9 state in response to a shoppers request for Plaintiffs trademarked products is likely
10 to cause confusion as to the source of the product displayed with a counterfeit mark
11 that infringes on Plaintiffs trademarks; (v) eBays take down procedures are at best
12 reactionary rather than proactive; and (vi) changes in its practices, policies and
13 procedures that would assist trademark owners, such as Plaintiff, by proactively
14 removing Fake Products and blocking repeat offenders would lead ebay.com to being
15 less attractive to the sellers of Counterfeit Products, hurting eBays reported profits.
16
52.
In addition, Plaintiff is informed and believes that eBay recognized that
17 the company and PayPal could reap tremendous profits from the sale of Fake Products
18 if ebay.com could provide a platform for sellers to cheaply source those products
19 overseas.
20
53.
To that end, Plaintiff is informed and believes that eBay developed a
21 business strategy that, among other things, (i) launched eBay China; (ii) used non-US
22 eBay account managers to target sellers in foreign markets, where fake products could
23 be cheaply manufactured, to become high volume sellers on ebay.com; and (ii)
24 committed substantial eBay resources to the promotion and development of these
25 sellers business by, inter alia, negotiating highly favorable trilateral agreements
26 between the US Postal Service, eBay China and the Hong Kong Post office to offer
27 China and Hong Kong eBay sellers fast but low cost shipping options.
28
17
COMPLAINT
54.
In or about 2007, eBay China launched www.ebay.cn, an exchange,
2 communication and sharing platform specially built for Chinese cross-border buyers
3 and sellers. Reportedly, it provides training courses to help Chinese sellers expand
4 their business in overseas markets. The mission of eBay China is to open up a new
5 online silk-road for Chinese enterprises and individual users and help more Chinese
6 sellers reaching out to the world.
7
55.
xxx
An important postal service negotiated by eBay to benefit Chinese sellers
8 involved in the sale of Fake Products, launched in or about May 2011, is referred to as
9 ePacket. ePacket offers local pick-up service, label printing, online tracking and pre10 customs declaration for a 7 to 10-day guaranteed delivery period at a 30 to 50%
xxxi
11 discounted price compared with many equivalent.

12 arrangement was touted as follows:
When originally announced, the
The collaborative service and marketing
13 agreement for these lightweight shipments provides U.S. consumers with greater
14 convenience and delivery confirmation information online at usps.com. Sellers using
15 eBay GC can track their shipments with electronic notifications such as in-process
16 and proof-of-delivery scans at ebay.cn. Upon arrival in the U.S., these shipments are
17 processed as domestic First-Class Mail, with a one to three-day delivery standard.
xxxii
18 Sellers in China using the shipping platform through eBay GC were expected to ship
19 small items such as cellular telephone accessories and electronics weighing up to 4.4
20 pounds (2 kilos), with most in the range of 13 ounces and under.
21
56.
xxxiii
This collaboration will increase convenience and improve delivery
22 consistency for American consumers ordering small shipments from merchants in

23 China, and holds great potential for increasing international package volumes for the
24 Postal Service, said Pranab Shah, managing director and vice president, Global
25 Business. We look forward to working with our business partners to build upon this
xxxiv
26 agreement as we move forward.

27
28
18
COMPLAINT
57.
According to the Washington Post, ePacket makes it possible for an
2 [eBay seller] to send a pound of stuff from Hong Kong to D.C. for less than it would
3 cost to send the same package from, say, Seattle.
xxxv
It also has been reported that
4 [n]early 40% of eBay sellers in China are using the ePacket service to ship to the
5 U.S., with over 80% of items delivered in five to 10 days. Upon arrival in the U.S.,
6 these shipments are processed as domestic First-Class Mail, with a one to three-day
7 delivery standard.
58.
xxxvi
eBays Asian Exporter Index is a report that looks at the top eBay sellers
9 across Asia. Most of these sellers are based in China and Hong Kong and sell their
10 items on various eBay sites, the top sites being eBays U.S., U.K., Australian and
11 German marketplaces. The eBay Asian Exporters Index looks at some of the most
12 successful businesses selling on eBay from across Asia. These businesses are
13 exporters with a global customer base. The information in the Index is based on
14 internal eBay data and the results of a Nielsen online survey conducted among eBay
xxxvii
15 sellers with annual sales over US$100,000 based in China and Hong Kong.
The
16 Index looks at sellers and trends from around Asia including China and Hong
xxxviii
17 Kong.
18
59.
eBay has played a big role in Asias economy, says Jay Lee, managing
19 director of eBay Asia Pacific, adding that the average Asian merchant gets 71 percent
20 of his or her total sales through eBay and employs 10 people. The Asian Exporters
21 Index demonstrates the important role eBay plays in the development of e-commerce
22 in Asia, providing a source of job and wealth creation, he says. eBay, which has a
23 reported 97 million active users, has allowed sellers in Asia to market themselves
24 directly to millions of shoppers around the world, adds Jeff Liao, CEO of eBay
25 Greater China and Asian cross-border trade. The top eBay categories for Asian sellers
26 included Clothing & Accessories, Jewelry & Watches, Computers and Cell Phones &
27 PDAs.
28
xxxix
19
COMPLAINT
60.
According to Mr. Liao, eBay enables savvy brands and manufacturers
2 to market directly to consumers around the globe. Combine that with Asias status as
3 the worlds manufacturing engine room and you have a powerful opportunity to
4 create a very efficient market connecting consumers directly to the source.
xl
Cell
5 phones and accessories, such as cellphone cases, are among the top five categories in
xli
6 which Asian exporters sell on eBay.

7
61.
Since at least February 2013, Plaintiff has incurred substantial costs
8 actively monitoring listings on ebay.com and uncovered evidence that one or more
9 listings that infringe on Plaintiffs Marks appear on eBay.com almost daily.
10 Plaintiffs conclusions are consistent with the reported results of a nine-month
11 investigation by The Counterfeit Report.
12
62.
Since at least February 2013, Plaintiff has sent eBay thousands of notices
13 that listings on ebay.com by Unauthorized Sellers display counterfeit marks that

14 infringe on Plaintiffs Marks in connection with the promotion, advertisement, offer
15 for sale, sale and distribution of obvious counterfeit Lunatik products in violation of
16 the Lanham Act, as amended.
At least 20% of those NOCIs involved sellers
17 identified on ebay.com as located in Hong Kong or China. Plaintiffs Marks appear

18 on the products and packaging described in paragraphs 16 through 28 above.
19
63.
Plaintiff and others have repeatedly placed eBay on notice that many of
20 its Unauthorized Sellers are repeat infringers. Nevertheless, eBay has taken no
21 effective steps, such as de-listing the Unauthorized Sellers, to prevent these recidivist
22 Unauthorized Sellers from continuing to operate on eBay and infringing on Plaintiffs
23 Marks.
24
25
26
27
28
20
COMPLAINT
Unauthorized Use of Plaintiffs Marks By Seller 1
1
2
64.
Set forth below is a listing that appeared on ebay.com in or about 2014,
3 which displays one or more counterfeit marks that infringe on Plaintiffs Mark in
4 connection with an offer for the sale of a Fake Lunatik iPhone case by Defendant
5 Kang. EBay identifies on Kangs listing that Kang has sold 9,971 units of the Fake
6 Lunatik iPhone cases described therein to the public.
The listing advertises an
7 Aluminum Gorilla Metal Cover Case iPhone Case for $10.99 in colors never
8 offered by Lunatik.
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
65.
In or about 2014, The Counterfeit Report made several purchases from
25 Defendant Kang in response to the listing above and was shipped by Defendant Kang
26 four iPhone 6 models and three iPhone 5 models in three separate purchases. All of
27
28
21
COMPLAINT
1 the Fake Products shipped by Defendant Kang are aluminum knockoffs absent the
2 LUNATIK name or logo mark.
3
66.
The Fake Lunatik Product advertised mimics the design of the authentic
4 TAKTIK Extreme for iPhone 5 with the Corning Gorilla Glass Impact Lens For
5 Screen Protection and bears an exact copy of Lunatiks federally registered logo
6 mark. The listing images are all linked to the eBay listing by the product ID in the
7 URL at the top of the image. The listing was intended to confuse both the ultimate
8 retail consumer and persons observing the ultimate consumer into believing that it is a
9 genuine Lunatik product.
10
67.
The Counterfeit Report put eBay on notice that the product being sold by
11 Defendant Kang was a counterfeit of Plaintiffs iPhone case. Lunatik does not make
12 red cases.
Further, the Counterfeit Report informed eBay that [t]he product is
13 evidence of a crime and WILL NOT be returned. Returning counterfeit products is

14 against eBay policy and unlawful. eBay customer support reviewed The Counterfeit
15 Reports request for a refund and declined the request for a refund.
16
68.
Though eBays policy is not to return counterfeit productsxlii, upon
17 information and belief, this is exactly what eBay requires for a consumer to receive a
18 refund. Fake Products are evidence of a crime. See 18 U.S.C.A. 2320. Contrary to
19 law, upon reporting a purchased item as counterfeit, the eBay customer is instructed
20 to return the product. Instead of taking any action against the Unauthorized Seller,
21 eBay facilitates the Sellers receipt back of the Fake Products, which are likely then
22 resold to another unsuspecting eBay customer. Plaintiff is informed and believes that
23 PayPal provides buyers with the same or a similar instruction.
24
25
26
27
28
22
COMPLAINT
69.
On May 27, 2015, Plaintiff transmitted a NOCI to eBay in response to a
2 listing on ebay.com of Seller 1 with, among other things, Plaintiffs logo mark on an
3 image of a counterfeit aluminum TAKTIK phone case (Seller 1 NOCI).
The
4 listing also displays a counterfeit aluminum TAKTIK phone case in yellow. The
5 listing reports 400 sold. The listing also reports credit cards are processed by
6 PayPal and that buyers can also apply and use purchase PayPal Credit. Buyers
7 applying for PayPal Credit are eligible to receive $10 back on their first purchase.
8 Shown below is an image of the Seller 1 listing that is the subject of Plaintiffs
9 May 27, 2015 NOCI to eBay.
10
11
12
13
14
15
16
17
18
70.
Lunatik makes its TAKTIK phone cases in two colors: white and
19 black. It has repeatedly made this fact known to eBay, and advised it that phone cases
20 offered under the TAKTIK mark in other colors such as yellow or red are
21 counterfeit goods.
22
71.
Lunatik uses a poly-carbonate plastic material for its TAKTIK phone
23 perimeters. It does not and has never used Aluminum, and has repeatedly made eBay
24 aware of this fact, and advised it that phone cases offered under the TAKTIK mark
25 as aluminum are counterfeit.
26
72.
Given that eBay repeatedly has been informed by Lunatik and The
27 Counterfeit Report that TAKTIK phone cases offered as aluminum are counterfeit
28
23
COMPLAINT
1 and that TAKTIK phone cases offered in colors such as yellow, silver, gold or red
2 are counterfeit, eBay knew, or willfully ignored, that, based on the price, material and
3 color of the iPhone cases advertised in the listings that were the subject of the Seller 1
4 NOCIs, that the iPhone cases advertised by Seller 1 were Fake Lunatik Products.
5
73.
As evidenced by the July 23, 2015 listing below, eBay has continued to
6 allow Seller 1 to sell obvious counterfeit iPhone cases on ebay.com that unlawfully
7 infringe on Plaintiffs Marks.
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
74.
Set forth below is a listing that appeared on ebay.com in or about 2014
27 connection with an offer for the sale of Fake Lunatik iPhone cases by Seller 2. It was
28
24
COMPLAINT
1 reported on ebay.com that 2,705 units of the Fake Lunatik iPhone case described in
2 Seller 2s listing were sold to the public. The listing advertises an Aluminum Metal
3 Temptered Gorilla Glass Film Case For An iPhone 5C 4/4S 5/S 6 for $11.53 in
4 colors never offered by Lunatik. The listing also reports credit cards are processed
5 by PayPal and that buyers can also apply and use purchase PayPal Credit. Buyers
6 applying for PayPal Credit are eligible to receive $10 back on their first purchase.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
75.
Comparing the images in paragraphs 16, 20, 22, 24, 26 and 30 with the
22 images in paragraph 74, it is evident that the Fake Lunatik Products advertised by
23 Seller 2 mimic the design of the authentic TAKTIK Extreme with the Corning
24 Gorilla Glass Impact Lens For Screen Protection and bear an exact copy of
25 Lunatiks federally registered design mark. The listing images are all linked to the
26 eBay listing by the product ID in the URL at the top of the image. The listing was
27
28
25
COMPLAINT
1 intended to confuse both the ultimate retail consumer and persons observing the
2 ultimate consumer into believing that it is a genuine Lunatik product.
3
76.
The Counterfeit Report made several purchases from Seller 2 in response
4 to the listing and was shipped by Seller 2 two silver, two red and two yellow
5 aluminum knockoffs absent the LUNATIK name or design. Plaintiff is informed and
6 believes that The Counterfeit Report put eBay on notice that the iPhone cases being
7 listed by Seller 2 were counterfeits of Plaintiffs iPhone cases.
8
77.
9 black. It has repeatedly made this fact known to eBay, and advised it that TAKTIK
10 phone cases offered in other colors such as yellow or red are counterfeit goods.
11
78.
13 aware of this fact, and advised it that TAKTIK phones offered as aluminum are
14 counterfeit.
15
79.
On July 13, 2015, Plaintiff transmitted a NOCI to eBay in response to
16 listings on ebay.com of Seller 2 for the sale of obvious counterfeit Lunatik products as
17 described more particularly herein (Seller 2 NOCI).
18
80.
24
25
26
27
28
26
COMPLAINT
81.
As evidenced by the July 28, 2015 listing below, eBay has continued to
2 allow Seller 2 to sell obvious counterfeit iPhone cases on ebay.com that unlawfully
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
82.
Set forth below is a listing that appeared on ebay.com on July 15, 2014
20 connection with an offer for the sale of Fake Lunatik iPhone cases by Seller 2
21 (previously identified as Seller 4). It was reported on ebay.com that eight units of the
22 Fake Lunatik iPhone case described in the listing of Seller 2 (previously identified as
23 Seller 4) were sold to the public. The listing advertises an Aluminum Gorilla Glass
24 Metal Cover Case for iPhone 5s 5 Water Shock DUST Proof for $15.68 in gold,
25 silver, red and yellow, colors never offered by Lunatik.
26
83.
On July 15, 2014, Plaintiff transmitted multiple NOCIs to eBay in
27 response to listings on ebay.com of Seller 2 (previously identified as Seller 4) for the

28
27
COMPLAINT
1 sale of obvious counterfeit Lunatik products as described more particularly herein

2 (Seller 2(4) NOCIs).
As evidenced by the July 28, 2015 listing below, eBay
3 continues to allow Seller 2 (previously identified as Seller 4) to list for sale obvious
4 counterfeit iPhone cases on ebay.com that unlawfully infringe on Plaintiffs Marks.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
84.
27 images in paragraphs 81 and 83, it is evident that the Fake Lunatik Products
28
28
COMPLAINT
1 advertised by Seller 2 (previously identified as Seller 4) mimic the design of the

2 authentic TAKTIK Extreme for iPhone with the Corning Gorilla Glass Impact
3 Lens For Screen Protection and bear an exact copy of Lunatiks federally registered
4 design mark. The Fake Products were intended to confuse both the ultimate retail
5 consumer and persons observing the ultimate consumer into believing that it is a
7
85.
Lunatik makes its TAKTIK iPhone cases in two colors: white and
10
86.
13 counterfeit.
14
87.
18 color of the iPhone cases advertised in the listings that were the subject of the Seller
19 2(4) NOCIs, that the iPhone cases advertised by Seller 2 (previously identified as
20 Seller 4) were Fake Lunatik Products.
21
88.
Seller 2 (previously identified as Seller 6) has had multiple listings on
22 ebay.com which display one or more counterfeit marks that infringe on Plaintiffs
23 Marks in connection with an offer for the sale of an obvious Fake Lunatik iPhone case
24 by Seller 2 (previously identified as Seller 6).
25
89.
Set forth below is a listing that appeared on ebay.com on or about
26 July 15, 2014 which displays one or more counterfeit marks that infringe on
27 Plaintiffs Mark in connection with an offer for the sale of Fake Lunatik iPhone cases
28
29
COMPLAINT
It was reported on ebay.com that
2 seventeen units of the Fake Lunatik iPhone case described in the listing of Seller 2
3 (previously identified as Seller 6) were sold to the public. The listing advertises the
4 NEWEST Lunatik Waterproof Shockproof Aluminum Gorilla Cover Case For
5 iPhone 4 4s for $13.59. The listing offers iPhone cases for other iPhone models in
6 gold, silver, red and yellow, colors never offered by Lunatik
7
8
9
10
11
12
13
14
15
16
17
18
19
90.
On or about July 15, 2014 and June 10, 2015, Plaintiff transmitted
20 NOCIs to eBay in response to Seller 2 (previously identified as Seller 6) listings on

21 ebay.com offering for sale obvious counterfeit Lunatik iPhone cases (Seller 2(6)
22 NOCIs). As evidenced by the listing below, as of July 16, 2015, eBay has continued
23 to allow Seller 2 (previously identified as Seller 6) to sell obvious counterfeit iPhone
24 cases on ebay.com that unlawfully infringe on Plaintiffs Marks.
25
26
27
28
30
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
91.
21
92.
24
93.
26
27
28
31
COMPLAINT
2 counterfeit.
3
94.
8 2(60 NOCIs, that the iPhone cases advertised by Seller 2 (previously identified as
10
95.
Seller 2 (previously identified as Seller 7) has had multiple listings on
14
96.
Set forth below is a listing that appeared on ebay.com on or about
16 Plaintiffs Mark in connection with an offer for the sale of Fake Lunatik iPhone cases
17 by Seller 2 (previously identified as Seller 7). It was reported on ebay.com that two
18 units of the Fake Lunatik iPhone case described in the listing of Seller 2 (previously
19 identified as Seller 7) were sold to the public.
The listing advertises a
20 Shock/Dust/WaterProof Aluminum Metal Case with Gorilla Glass For Apple

21 iPhone4s for $13.58. The listing offers iPhone cases for other iPhone models in
22 silver, red and yellow, colors never offered by Lunatik.
23 payment to PayPal.
24
25
26
27
28
32
COMPLAINT
The listing also reports
1
2
3
4
5
6
7
8
9
10
11
12
13
97.
On or about July 15, 2014, Plaintiff transmitted NOCIs to eBay in
14 response to Seller 7 listings on ebay.com offering for sale obvious counterfeit Lunatik
15 iPhone cases (Seller 2(7) NOCIs). As evidenced by the listing below, as of July 15,
16 2015, eBay continues to allow Seller 2 (previously identified as Seller 7) to list for
17 sale obvious counterfeit iPhone cases on ebay.com that unlawfully infringe on
18 Plaintiffs Marks.
19
20
21
22
23
24
25
26
27
28
33
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
98.
22
99.
24 phone cases offered in other colors such as yellow or red are counterfeit goods
25
100. Lunatik uses a poly-carbonate plastic material for its TAKTIK phone
27
28
34
COMPLAINT
2 counterfeit.
3
101. Given that eBay repeatedly has been informed by Lunatik and the
10
102. Seller 2 (previously identified as Seller 8) has had multiple listings on
14
103. Set forth below is a listing that appeared on ebay.com on or about
16 Plaintiffs Mark in connection with an offer for the sale of a Fake Lunatik iPhone case
The listing advertises a Lunatik
18 Shockproof Aluminum Metal Case Gorilla Glass Cover for iPhone 5C Red for
19 $7.99. The listing offers iPhone cases for iPhone models either not manufactured by
20 Plaintiff and/or in colors never offered by Lunatik. The listing also reports credit
21 cards are processed by PayPal.
22
23
24
25
26
27
28
35
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
104. On or about July 15, 2014, Plaintiff transmitted NOCIs to eBay in
15 response to Seller 8 listings on ebay.com offering for sale obvious counterfeit Lunatik
16 iPhone cases (Seller 2(8) NOCIs). As evidenced by the listing below, as of July 13,
17 2015, eBay continues to allow Seller 2 (previously identified as Seller 8) to list for
18 sale obvious counterfeit iPhone cases on ebay.com that unlawfully infringe on
20
21
22
23
24
25
26
27
28
36
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
105. Comparing the images in paragraphs 16, 20, 22, 24, 26 and 30 with the
26
27
28
37
COMPLAINT
106. Lunatik makes its TAKTIK phone cases in two colors: white and
4
7 counterfeit.
8
108. Given that eBay repeatedly has been informed by Lunatik and The
15
109. Set forth below is a July 2014 listing for the sale of Fake Lunatik iPhone
16 cases to the public on ebay.com by Defendant Here-Buy, Seller 2 (previously

17 identified as Seller 9).
As of July 15, 2014, it was reported on ebay.com that
18 Defendant Here-Buy sold 141 units of the advertised Fake Lunatik iPhone case based
19 on this listing.
The listing advertises Lunatik For Apple iPhone 5c Glass Metal
20 Cover Case Aluminum Gorilla Waterproof cases for $15.56 with the LUNATIK
21 design mark in colors never offered by Lunatik.
22
23
24
25
26
27
28
38
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
110. Set forth below is another listing for the sale of Fake Lunatik iPhone
cases to the public on ebay.com by Seller 2 (previously identified as Seller 9). As of
June 1, 2015, it was reported on ebay.com that Seller 2 (previously identified as Seller
9) sold 325 units of the advertised Fake Lunatik iPhone case based on this listing.
The listing advertises a Shockproof Waterproof Gorilla Glass Metal Aluminum Case
Cover For iPhone 4 4S for $11.89 in yellow with the LUNATIK design mark in
silver, red, and yellow, colors never offered by Lunatik.
19
20
21
22
23
24
25
26
27
28
39
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
111.
21
23 phone cases offered in other colors such as yellow, silver, gold or red are counterfeit
24 goods.
25
27
28
40
COMPLAINT
2 counterfeit.
3
114. On July 14, 2014, June 1, 2015, and July 15, 2014 Plaintiff transmitted
4 NOCIs to eBay in response to listings on ebay.com of Seller 2 (previously identified

5 as Seller 9) for the sale of obvious counterfeit Lunatik products as described more
6 particularly herein (Seller 2(9) NOCIs).
7
115. Given that eBay repeatedly has been informed by Lunatik and the
9 and that TAKTIK iPhone cases offered in colors such as yellow, silver, gold or red
12 NOCIs, that the iPhone cases advertised by Seller 2 (previously identified as Seller 9)
13 were Fake Lunatik Products.
14
18
117. Set forth below is a listing that appeared on ebay.com on or about July
19 15, 2014 which displays one or more counterfeit marks that infringe on Plaintiffs
20 Mark in connection with an offer for the sale of Fake Lunatik iPhone cases by Seller 2
21 (previously identified as Seller 10). The listing advertises a Water-Resistant-Anti22 Shock-Aluminum-Gorilla-Glass-Metal-Case-for-iPhone-5-5S-NEW for $15.59. The
23 listing offers iPhone cases in gold, silver, red and yellow, colors never offered by
24 Lunatik. The listing also reports payment through PayPal.
25
26
27
28
41
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14 response to Seller 2 (previously identified as Seller 10) listings on ebay.com offering

15 for sale obvious counterfeit Lunatik iPhone cases (Seller 2(10) NOCIs).
As
16 evidenced by the listing below, as of July 29, 2015, eBay continues to allow Seller 2
17 (previously identified as Seller 10) to list for sale obvious counterfeit iPhone cases on
18 ebay.com that unlawfully infringe on Plaintiffs Marks.
19
20
21
22
23
24
25
26
27
28
42
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
25
28
43
COMPLAINT
4 counterfeit.
5
11 Seller 10) were Fake Lunatik Products
12
16
124. Set forth below is a listing that appeared on ebay.com on or about July
17 15, 2014 which displays one or more counterfeit marks that infringe on Plaintiffs
18 Mark in connection with an offer for the sale of Fake Lunatik iPhone cases by Seller 2
19 (previously identified as Seller 11). It was reported on ebay.com that 12 units of the
21 Seller 11) were sold to the public.
The listing advertises an Authentic Lunatik
22 Aluminum Metal Case Waterproof Shockproof For iPhone 5 5S 100% High quality
23 metal material #5 colours Reals!!!! for $15.53. The listing offers iPhone cases for
24 other iPhone models either not manufactured by Plaintiff and/or in colors never
25 offered by Lunatik.
26
27
28
44
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14 response to Seller 11 listings on ebay.com offering for sale obvious counterfeit

15 Lunatik iPhone cases (Seller 2(11) NOCIs). As evidenced by the listing below, as
16 of July 29, 2015, eBay continues to allow Seller 2 (previously identified as Seller 11)
17 to list for sale obvious counterfeit iPhone cases on ebay.com that unlawfully infringe
18 on Plaintiffs Marks.
19
20
21
22
23
24
25
26
27
28
45
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
28
46
COMPLAINT
4
7 counterfeit.
8
12 color of the iPhone cases advertised in the listings that were the subject of the
13 Seller 2(11) NOCIs, that the iPhone cases advertised by Seller 2 (previously identified
14 as Seller 11) were Fake Lunatik Products.
15
16
130. Set forth below is a listing that appeared on eBay in or about 2014 for the
17 sale of Fake Lunatik iPhone cases to the public by Defendant Chen. As reported by
18 ebay.com, Defendant Chen, Seller 3, sold 23,726 units of the advertised Fake Lunatik
19 iPhone case based on this listing. The listing advertises Aluminum Gorilla Metal
20 Cover Case iPhone Case for $15.99, uses the LUNATIK logo mark, and shows a
21 counterfeit red TAKTIK model case, a color never offered by Lunatik for that
22 model.
23
24
25
26
27
28
47
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
131. The Counterfeit Report made several purchases from Seller 3 in response
18 to the listing and was shipped by Seller 3 iPhone 5 & 6 models in red, yellow, rose
19 and white.
All of the Fake Products shipped by Defendant Chen are aluminum
20 knockoffs absent the LUNATIK name or logo mark.

21
22
23
24
25
26
27
28
48
COMPLAINT
132. On May 19 and 27, 2015, Plaintiff transmitted NOCIs to eBay in
2 response to listings on ebay.com of Seller 3 which display, among other things,

3 images of a counterfeit aluminum TAKTIK phone case displaying Plaintiffs logo
4 mark (Seller 3 NOCIs). In one listing shown below, the counterfeit iPhone case is
5 displayed is red.
One listing reports 23,952 sold. The listings also report that
6 credit cards processed by PayPal and that buyers can apply and use purchase
7 PayPal Credit. Buyers applying for PayPal Credit are eligible to receive $10 back
8 on their first purchase.
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
27
28
49
COMPLAINT
1 advertised by Seller 3 mimic the design of the authentic TAKTIK Extreme for
2 iPhone with the Corning Gorilla Glass Impact Lens For Screen Protection and
3 bear an exact copy of Lunatiks federally registered design mark. The Fake Products
4 were intended to confuse both the ultimate retail consumer and persons observing the
5 ultimate consumer into believing that it is a genuine Lunatik product
6
8 phone cases offered in other colors such as yellow, or red are counterfeit goods.
9
12 counterfeit.
13
19
20
21
22
23
24
25
26
27
28
50
COMPLAINT
137. As evidenced by the July 23, 2015 listing below that unlawfully infringes
2 on Plaintiffs Marks, eBay has continued to allow Seller 3 to list obvious counterfeit
3 iPhone cases on ebay.com.
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

ebay.com which display one or more counterfeit marks that infringe on Plaintiffs
Marks in connection with an offer for the sale of obvious Fake Lunatik iPhone cases
by Seller 3 (previously identified as Seller 5). According to The Counterfeit Report,
Seller 3 (previously identified as Seller 5) sold The Counterfeit Report three iPhone
cases listed with the LUNATIK design logo but sent to The Counterfeit Report
51
COMPLAINT
1 three counterfeit iPhone cases. As reported on ebay.com, as of May 29, 2015, Seller
2 3 (previously identified as Seller 5) had sold 8,208 units of the Fake Lunatik iPhone
3 cases described in the listings of Seller 3 (previously identified as Seller 5) on
4 ebay.com. Plaintiff is informed and believes that The Counterfeit Report put eBay on
5 notice that the iPhone cases being sold by Seller 3 (previously identified as Seller 5)
6 were counterfeits of Plaintiffs iPhone cases.
7
139. Set forth below is a listing that appeared on ebay.com on July 18, 2015
9 connection with an offer for the sale of Fake Lunatik iPhone cases by Seller 3
10 (previously identified as Seller 5). It was reported on ebay.com that 58 units of the
12 Seller 5) were sold to the public. The listing advertises a Waterproof Shockproof
13 Aluminum Gorilla Metal Cover Case For iPhone Models. Available for iPhone 6 +
14 6PLUS + 4/4S/5/5S/5C for $10.59. As of the date of the listing, Plaintiffs iPhone
15 case for iPhone 6 and 6Plus was not available for sale; it could only be pre-ordered.
16 The listing offers iPhone cases for other iPhone models either not manufactured by
17 Plaintiff and/or in colors never offered by Lunatik. The listing also reports credit
18 cards are processed by PayPal and that buyers can also apply and use purchase
19 PayPal Credit. Buyers applying for PayPal Credit are eligible to receive $10 back
20 on their first purchase.
21
140. On or about July 17, 2015, Plaintiff transmitted NOCI to eBay in
22 response to Seller 3 (previously identified as Seller 5) listings 252029571090 and

23 261912044349 on ebay.com offering for sale obvious counterfeit Lunatik iPhone
24 cases. In response, ebay.com reported on July 17, 2015 [w]e are pleased to inform
25 you that [listings 252029571090 and 261912044349] you reported have been
26 removed from eBay in response to the Notice of Claimed Infringement you recently
27 sent. Days later, on or about July 20, 2015, Plaintiff transmitted NOCI to eBay in
28
52
COMPLAINT
1 response to Seller 3 (previously identified as Seller 5) listings 261896177346,

2 261705267694 and 261706158253 on ebay.com offering for sale obvious counterfeit
3 Lunatik iPhone cases. In response, ebay.com reported on July 20, 2015 [w]e are
4 pleased
to
inform
you
that
[listings
261896177346,
261705267694
and
5 261706158253] you reported have been removed from eBay in response to the Notice
6 of Claimed Infringement you recently sent. Plaintiff is informed and believes that as
7 of July 27, 2015, eBay was allowing Seller 3 (previously identified as Seller 5) to
8 continue to sell obvious counterfeit iPhone cases that unlawfully infringe on
9 Plaintiffs Marks using the name ledno8.
10
141. As evidenced by the listing below, as of July 19, 2015, eBay has
11 continued to allow Seller 3 (previously identified as Seller 5) to sell obvious

12 counterfeit iPhone cases on ebay.com that unlawfully infringe on Plaintiffs Marks.
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
53
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
21
24
27 counterfeit..
28
54
COMPLAINT
6 3(5) NOCIs described above, that the iPhone cases advertised by Seller 3 (previously
7 identified as Seller 5) were Fake Lunatik Products.
Unauthorized Use of Plaintiffs Marks By eBay
8
9
146. eBay aggressively supports its business model by mining the data it
10 collects on ebay.com, including, but not limited to, data relating to purchases, sales,
11 current bidding, failed bids, watch list activity and wish list activity. eBay uses this
12 data
in
connection
with
its
direct
marketing
of
products
listed
on
13 ebay.com. Specifically, eBay causes the transmittal via email of listings of products
14 listed on ebay.com (eBay Marketing Email), including listings for Fake Lunatik
15 products that infringe on Plaintiffs marks.
16
147. For example, on or about July 25, 2015, eBay caused a Marketing Email
17 to be transmitted to a prospective eBay buyer informing the prospective buyer Great

18 news: 2 other items youre interested in are ALSO discounted for a limited time.
19 Thank you for shopping on eBay. The products listed on ebay.com that were the
20 subject of the Marketing Email were Fake Lunatik iPhone cases listed for sale by
21 Seller 2.
The listings that eBay caused to be forwarded to the prospective buyer
eBays final message of the Marketing eMail is
23 WATCH WHAT YOU WANT. WELL SEND YOU DISCOUNTS!.

24
148. Plaintiff is informed and believes that Marketing Emails are highly
25 tailored email notification recommendations that are an integral part of eBays

26 marketing strategy, created by eBay using complex algorithms which are the result of
27
28
55
COMPLAINT
1 eBays substantial investment in, among other things, what at the time was a New
2 York start-up that eBay acquired, Hunch.
3
149. At or about the time eBay acquired Hunch on or about November 21,
4 2011, it was publicly reported that Hunch will enable eBay to move beyond standard
5 item-to-item recommendations and use a broader variety of members online tastes
6 and interests to suggest new and interesting items for them to browse and buy on
7 eBay, the online auctioneer said. Hunchs ability to tailor data to meet customer needs
8 can also be used in other areas at eBay including search and advertising, it added.
9 powerful software programs, highly trained software engineers and programmers.
10
150.
eBay also publicly reported on November 21, 2011 that
xliii
Hunchs
11 technology talent and its deep expertise in areas like machine learning, data mining
12 and predictive modeling are expected to help eBay expand and grow merchandising
13 and relevance capabilities to further improve the shopping and selling experience for
14 eBay customers. For example, eBay buyers are expected to benefit from Hunchs
15 predictive ability to generate meaningful, yet often non-obvious, recommendations for
16 items available on eBay based on their specific tastes.
17
xliv
151. Further, acknowledging that its acquisition of Hunch was to enhance
18 eBays marketing function, eBay publicly stated: We are engaging consumers in

19 innovative ways and attracting top technologists to shape the future of commerce,
20 said Mark Carges, Chief Technology Officer and Senior Vice President, Global
21 Products, Marketplaces. With Hunch, were adding new capabilities to personalizing
22 the shopping experience on eBay to the individual relevant tastes and interests of our
23 customers. We expect Hunchs technologies to benefit eBay shoppers as they browse
24 and buy, and to bring sellers on eBay new ways to connect the right products with the
25 right customers.
26
xlv
152. Using this technology, eBay has designed and implemented computer
27 algorithms that can (and on information, do) identify a users proclivity toward
28
56
COMPLAINT
1 infringing/Fake Products.
For example, such algorithms specifically operate to
2 identify users based on the users (1) interest in items offered too far under retail price
3 to reasonably be expected to be legitimate, (2) interest in items offered by storefronts
4 known by eBay to have a past history selling counterfeit goods, or (3) interest in, or
5 willingness to purchase, name-brand products shipped directly from China. Once the
6 algorithms identify such users, the users are then targeted with offers to purchase fake
7 products, or directed to listings for such products by eBay.
8
153. Further, Plaintiff is informed and believes that eBay, using Hunch or a
9 similar technology, on a regular and continuous basis promotes the sale of obvious
10 counterfeit Lunatik Products that infringe on Plaintiffs Marks by Unauthorized
11 Sellers by, among other things, the transmittal of automated emails to eBay buyers
12 who have browsed similar items.
13
154. For example, set forth below is an email transmitted to an eBay buyer on
14 July 25, 2015, offering to sell counterfeit Lunatik iPhone cases described as
15 Waterproof Shockproof Aluminum Grilla [sic] Glass Metal Case Cover for Apple
16 iPhone @@ for $9.23.
17
18
19
20
21
22
23
24
25
26
27
28
57
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
155. In response to eBays email solicitation, the aforementioned eBay buyer
18 purchased four cases from Seller 2 in black, red, yellow, and silver in iPhone sizes 4,
19 4S, 5, and 6, respectively. The images below depict the Fake Lunatik Products sent to
20 that eBay buyer. None of the Fake Lunatik Products sent to the buyer had any of
21 Plaintiffs Marks as advertised by eBays email.
22
23
24
25
26
27
28
58
COMPLAINT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
17 advertised by eBay mimic the design of the authentic TAKTIK Extreme for iPhone
18 with the Corning Gorilla Glass Impact Lens For Screen Protection and bear an
19 exact copy of Lunatiks federally registered design mark. The Fake Products were
20 intended to confuse both the ultimate retail consumer and persons observing the
21 ultimate consumer into believing that it is a genuine Lunatik product.
22
25
27
28
59
COMPLAINT
2 counterfeit.
3
7 color of the iPhone cases advertised in its July 25, 2014 email were Fake Lunatik
8 Products.
9
The Counterfeit Report Confirms Unauthorized Use of Plaintiffs Marks by
10
eBay Sellers and Knowing Contribution by eBay.
11
160. During the period November
12 2014 through June 2014, The Counterfeit

13 Report responded to infringing listings on
14 ebay.com offered by seventy-three eBay
15 sellers and received from those sellers,
16 including at least Seller Defendants 1, 2
17 and 3, 121 Fake Lunatik Cases. Seventy18 one of the 121 Fake Lunatik Cases bore Lunatik Marks on the product and/or
19 packaging. These Fake Lunatik Cases were received from fifty-one eBay sellers. The
20 remaining fifty cases shipped by twenty-two eBay sellers to The Counterfeit Report
21 were identified in eBay listings showing the Lunatik word mark or logo mark, but no
22 Lunatik Mark was on the product shipped to The Counterfeit Report.
23
161. The Counterfeit Report performed a similar study with Lunatik products
24 on www.amazon.com, and brought the results to Amazons attention. Specifically,

25 The Counterfeit Report identified to Amazon that Lunatik does not sell TAKTIK
26 brand phone cases in colors other than white and black, and does not make them using
27 aluminum.
28
Using this information, Amazon was able to clear away nearly 7,000
60
COMPLAINT
1 counterfeit listings in a single day using a simply search algorithm to identify and
2 remove TAKTIK brand cases of the wrong color or material.
3
162. Not only has eBay refused to take such a proactive and simple step, it
4 intentionally acquires companies, such as Hunch, so that it is able to use similar

5 algorithms to aggressively advertise to help consumers find these off-color and
6 wrong-material Fake Lunatik Products on ebay.com. For example, a user can go on
7 to ebay.com, search lunatik taktik and select yellow or red and will either be
8 directed by eBay to such counterfeit products or receive an alert from eBay when an
9 Unauthorized Seller offers such a counterfeit product.
10
163. Thus, on information and belief, eBay has the same search and isolation
11 capability as Amazon, but has used it to directly and indirectly traffic in and profit
12 from the sale of Fake Lunatik profits rather than to remove such fake products from
13 ebay.com.
14
Unauthorized Use of Plaintiffs Marks In Connection with Listings for
15
LUNATIK EPIK.
16
164. Set forth below is a listing dated May 28, 2015 for the sale of a Fake
17 Lunatik iWatch case to the public on ebay.com by a seller listed on ebay.com. The
18 listing advertises a Luxury Full Metal Aluminum Wrist watch bands Strap Case for
19
Apple
20
$36.89 with the LUNATIK logo
21
mark on the power button. The
22
listings also report that credit
23
cards [are] processed by PayPal
24
and that buyers can apply and
25
use purchase PayPal Credit.
26
Buyers applying for PaylPal
27 Credit are eligible to receive $10 back on their first purchase.

28
61
COMPLAINT
Watch
iWatch
for
165. On May 15, 2015, Plaintiff transmitted a NOCI to vero@eBay.com in
2 response to the listing described in paragraph 154 above.
In the NOCI, Plaintiff
3 informed eBay [s]eller has [Plaintiffs] registered trademark on the watch power
4 button. [Plaintiff] just launched this watch case [on May 15, 2015] at Apple stores
5 only. EBay effectively ignored Plaintiffs NOCI. Fifteen minutes after Plaintiffs
6 NOCI was sent, vero@ebay.com responded as follows: If you feel that these listings
7 do infringe on your intellectual property rights, please respond to this message and
8 provide us with a more detailed explanation. Since May 15, 2015, multiple listings
9 have appeared to ebay.com for the sale of Fake Lunatik iWatch cases by
10 Unauthorized Sellers.
11
166. Comparing the image in paragraph 36 with the image in paragraph 164,
12 it is evident that the Fake Lunatik Products advertised on ebay.com mimic the design
13 of the authentic LUNATIK EPIK and bear an exact copy of Lunatiks federally
14 registered design mark.
The Fake Products were intended to confuse both the
15 ultimate retail consumer and persons observing the ultimate consumer into believing
16 that it is a genuine Lunatik product.
17
G.
PayPals Processing of Counterfeit Sales Through ebay.com
18
167. eBay sold the Fake Lunatik Products through its online retail
19 marketplaces with the payment processing services of its wholly-owned subsidiary,

20 PayPal. In 2014, PayPal moved $228 billion in 26 currencies across more than 190
21 nations, generating a total revenue of $7.9 billion (44% of eBays total profits). The
22 same year, eBay announced plans to spin-off PayPal into an independent company the
23 following year.
24
xlvi
168. eBay reports that PayPal connects with financial institutions around the
25 world, and allows consumers to make purchases using a broad range of payment
26 methods, regardless of where a seller is located. Users of our PayPal payments
27 solutions can engage in cross-border shopping, which can help merchants to increase
28
62
COMPLAINT
1 sales volume by allowing them to sell to a global base of consumers, who can make
2 payments in a wide range of currencies.
3
xlvii
169. eBay reports that the Company had 162 million active registered
4 accounts as of December 31, 2014. The term active registered accounts means, as
5 of a given date, all registered accounts that successfully sent or received at least one
6 payment or payment reversal through PayPal payments networks, including PayPal
7 Credit, within the last 12 months and which are currently able to transact. Users may
8 have more than one account with PayPal or PayPal Credit and therefore the number of
9 active registered accounts may be greater than the number of underlying users.
10
xlviii
170. PayPal started as a payment solution for online transactions between
11 consumers and merchants through a traditional online experience (i.e., an Internet12 connected computer). As a result of being simple and secure for consumers, PayPal
13 can help merchants to increase conversion of online traffic to sales. An online
14 merchant can typically open a standard PayPal account and begin accepting payments
15 through PayPal within a few minutes. Most online or mobile merchants are approved
16 instantly. Processing online with PayPal does not require a merchant to invest in new
17 or specialized hardware. PayPals technology platform supports growth with a variety
18 of value-added services. This is designed to help businesses of all sizes manage their
19 cash flow, invoice clients and pay bills, and to reduce the need for merchants to
20 receive and store sensitive customer financial information, enabling Payment Card
21 Industry, or PCI, compliant transactions. PayPal does not charge merchants any setup
22 fees and offers a standard service with no recurring monthly fees.
23
xlix
171. PayPal facilitates transactions on ebay.com through its payment
24 processing services, which enable payments in the online and physical worlds and
25 offer consumers choice by providing a variety of funding mechanisms.
26 Consumers can typically fund their PayPal accounts in a variety of ways, including
27 by credit card, debit card, electronic funds transfers from their bank account and
28
63
COMPLAINT
1 through a PayPal account balance if the consumer has previously received payments
2 through PayPal or chosen to pre-fund their PayPal account. eBay refers to the
3 allocation of funding sources used by PayPal consumers as its funding mix.
4
172. eBay also provides credit products through [its] PayPal Credit service.
5 Currently, when a consumer funds a purchase using PayPal Credit, a chartered

6 financial institution extends credit to the consumer, funds the extension of credit at
7 the point of sale and advances funds to the merchant. PayPal Credit is neither a
8 chartered financial institution nor is it licensed to make loans in any state.
9 Accordingly, PayPal Credit must rely on a bank or other licensed lender to issue
10 credit products and extend credit to customers. Although the chartered financial
11 institution continues to own each of the customer accounts, [eBay] subsequently
12 purchase[s] and retain[s] most of the consumer receivables related to the consumer
13 loans made by the chartered financial institution and [is] also responsible for servicing
14 functions related to the customer account.
15
li
173. PayPal has obtained licenses to operate as a money transmitter (or its
16 equivalent) in the United States, in the states where it is required, and the District of
17 Columbia, the U.S. Virgin Islands and Puerto Rico. PayPals subsidiary, Venmo, is
lii
18 also licensed as a money transmitter in certain U.S. states.

19
174. PayPal is subject to various anti-money laundering and counter-terrorist
20 financing laws and regulations around the world that prohibit, among other things, its
21 involvement in transferring the proceeds of criminal activities. PayPal has programs
liii
22 designed to comply with new and existing legal and regulatory requirements.
23
175. eBay publicly acknowledges that PayPals payment system is
24 susceptible to potentially illegal or improper uses, including . . . piracy of software,

25 movies, music, and other copyrighted or trademarked goods . . . and encouraging,
26 promoting, facilitating or instructing others to engage in illegal activities.
eBay
27 further reports that [t]here has been an increased focus by intellectual property rights
28
64
COMPLAINT
1 owners and government officials on the role that payments systems play in the sale of,
2 and payment for, pirated digital goods on the Internet, primarily through file sharing
3 services. Changes in law have increased the penalties for intermediaries providing
4 payment services for certain illegal activities and additional payments-related
5 proposals are under active consideration by government authorities. Intellectual
6 property rights owners may seek to bring legal action against payment companies
7 such as PayPal and other entities that are peripherally involved in the sale of
8 infringing items. Rights owners have also increasingly gone into U.S. courts and
9 obtained injunctions requiring PayPal to cease handling transactions for named
10 websites and third parties (in most cases located outside the United States) and to hold
11 the funds of such parties pending judicial resolution of the rights owners claims,
12 which disrupts the relationship between PayPal and such parties.
13
liv
176. PayPal is subject to regulation as a money transmitter by the Financial
14 Crimes Enforcement Network (FinCEN).
lv
Money transmitters must make
15 extensive reporting to FinCEN concerning the personal information of their customers

16 as well as transactional data, sometimes outright deny service to certain customers,
17 and even continue servicing customers while permitting government agencies to
18 monitor each of the transactions. Suspicious transactions or even transactions in
19 due course over a certain dollar amount must be reported to FinCEN. In effect, the
20 Bank Secrecy Act deputizes financial institutions, requiring them to act as the
21 governments foot soldiers in its war on money laundering and illicit finance. In the
22 cases of international or otherwise high risk clients, the business must take even
lvi
23 more stringent identification measures.

24
177. As a regulated entity, PayPal has an affirmative obligation to perform the
25 appropriate level of diligence on its merchants that would entail determining whether
lvii
26 a merchant is selling counterfeit or other illegal goods.

27
28
65
COMPLAINT
178. At all relevant times, eBay and PayPal, variously, had the ability to
2 exercise control over the means of any eBays sellers infringement and the offer and
3 sale of Fake Products on ebay.com by adopting Best Practices for Voluntary
4 Measures in Addressing the Sale of Counterfeits on the Internet by Payment Service
5 Providers (PSPs) promulgated by the International Trademark Association. Best
6 Practices include, but are not limited to, the following: (i) PSPs should have policies
7 in place prohibiting the use of their services for the purchase and sale of goods that
8 are determined to be counterfeit under applicable law; (ii) PSPs should have
9 procedures for trademark owners to report websites that use a PSPs network to
10 process payments for the unlawful sales; and (iii) if a PSP observes repeated
11 violations of the PSPs policies and applicable trademark laws through the use of its
12 payment service, PSPs may choose to impose appropriate remedies in accordance
13 with their own internal procedures, including, for example, termination of service.
14
179. As a result of, inter alia, PayPals extensive knowledge of its online sales
15 transactions, buyer feedback and the diligence PayPal is required to perform on its
16 merchants, and as publicly admitted by PayPal and eBay, both Defendants have actual
17 knowledge that they are providing payment processing services to merchants selling
18 infringing products. In addition, at all relevant times, PayPal and eBay, variously,
19 have been and are in a position to exercise control over the means of any eBay sellers
20 infringement and based on that control could impose appropriate remedies in
21 accordance with their own internal procedures, including, termination of service.
22 Plaintiff is informed and believes that the most successful avenue for shutting down
23 the Unauthorized Sellers and other counterfeiters who display products in listings on
24 ebay.com that infringe on one or more of Plaintiffs Marks, is to cut off the flow of
25 funding to such sellers, working with credit card companies and banks.
26
180. EBay and PayPal refuse to take such reasonable remedial action and
27 instead promote the unlawful activities of the Unauthorized Sellers, as described more
28
66
COMPLAINT
1 particularly hereinafter, and/or manufacture the false optic that they have no
2 knowledge or reason to suspect that users of its services are infringing on Plaintiffs
3 protected marks.
4
H.
eBay Is an Indispensable Part of the Enterprise that Sells Obvious
Counterfeit Products that Infringe on Plaintiffs Trademarks,
Resulting in Consumer Confusion and Harm to Plaintiff
181. The Seller Defendants could not have sold Fake Lunatik Products
8 through ebay.com but for eBays operation of ebay.com as well as eBays role
9 enabling the relationship between online consumers to online merchants selling
10 obvious counterfeit products that infringe on Plaintiffs Marks.
11
182. eBay has provided and continues to provide essential services to its
12 online sellers who display listings with counterfeit Lunatik Products that infringe on
14
183. eBay offers Market Data Services to sellers of Fake Products to direct
15 consumers to, among other things, Fake Lunatik Products offered. As advertised on
16 ebay.com [t]he eBay Market Data Program offers rich consumer insight data about
17 what is purchased on eBay and who is purchasing it. Access to this business
18 intelligence can help [sellers] make effective buying and selling decisions for [their]
19 business, regardless of whether you do business on eBay or outside of the eBay
20 Marketplace.
21
lviii
184. eBay has been an indispensable participant in the sale of the Seller
22 Defendants Fake Lunatik Products. eBay provided ebay.com for sales of Fake
23 Lunatik Products and facilitated the financing and commercial operations of the
24 merchants selling Fake Lunatik Products by providing marketing and key word and
25 search engine optimization services that direct buyers to Fake Lunatik Products and
26 by facilitating the processing of online payment transactions for the Fake Lunatik
27 Products through its wholly-owned subsidiary, PayPal. eBays Enterprise segment
28
67
COMPLAINT
1 includes its Magento business and provides commerce technologies, omnichannel

2 operations and marketing solutions for merchants of all sizes that operate in general
3 merchandise categories, including, but not limited to, categories that include products
4 that infringe on Plaintiffs trademarks.
5
185. In addition, and demonstrated herein, eBay actively promotes the illegal
6 activity of its Unauthorized Sellers by, among other things, soliciting buyers to
7 purchase Fake Lunatik Products using advertising that eBay has been informed by at
8 least Plaintiff and the Counterfeit Report that unlawfully infringes on Plaintiffs
9 Marks.
10
186. eBay knew or should have known that it was facilitating the sale of
11 Lunatik Fake Products by the Seller Defendants and more than 2,000 other sellers
12 who are registered and approved as sellers on ebay.com.
13
187. eBay has derived substantial profits from the sale of Fake Products,
14 including the sale of Fake Products that infringe on Plaintiffs trademarks on

15 ebay.com, including, but not limited to, revenue derived from each payment
16 transaction for which it provides processing services, through its wholly-owned
17 subsidiary, PayPal.
18
I.
eBays Unwillingness to Refrain from Trademark Infringement
19
188. Readily identifiable infringements, listings that display Fake Lunatik
20 Products, are easily found on ebay.com using eBays own search engine and email
21 notification system. As Plaintiff has informed eBay, these products, such as red and
22 yellow TAKTIK brand phone cases, or EPIK brand watch cases, have never been
23 (or at least have not yet been) offered in the Lunatik product line.
24
189. Under the heading What are we doing to prevent counterfeit listings?
25 eBay states on ebay.com that it is constantly working to make its site safer by doing
26 the following: (i) proactively removing suspicious items; (ii) removing items reported
27 as counterfeit by brand owners; (iii) working closely with law enforcement to
28
68
COMPLAINT
1 prosecute offenders; (iv) providing free tools for rights owners to efficiently identify
2 and report items to us for immediate removal; and (v) partnering with brand owners
3 and industry initiatives to bring attention to and combat the issue worldwide. eBays
4 statements about what it is doing to prevent counterfeit listings are materially false
5 and misleading.
6
lix
190. For example, Lunatik has sent eBay more than 5,557 NOCIs since
7 February 2013, broken down by product and location of product. So that Lunatik can
8 take prophylactic and other action against, inter alia, Unauthorized Sellers continuing
9 trademark infringements, the Lunatik NOCIs request eBays cooperation in
10 identifying to Lunatik [eBays] source for the infringing products. Notwithstanding
11 Plaintiffs repeated NOCI to eBay frequently identifying the same eBay sellers as
12 engaged in the offer and sale of Fake Lunatik Products on ebay.com, eBay has not
13 proactively removed obvious Fake Lunatik Products from eBay.com notwithstanding
14 that infringing products offered by the Unauthorized Sellers are easily found on
15 ebay.com using ebays own search engine and notification system. Instead, it requires
16 Lunatik to search for and isolate infringing sales and identify them specifically each
17 time, despite the fact that eBay is well aware that recidivist Unauthorized Sellers
18 continue to use ebay.com to list obvious counterfeit Lunatik products that infringe on
20
191. That eBays statements about what it is doing to prevent counterfeit
21 listings are false and misleading is also evidenced by the results of an investigation
22 conducted by an independent third party. Commencing in or about March 2013, The
23 Counterfeit Report conducted an investigation of over 250 counterfeit products that
24 were purchased from eBay sellers and promptly attempted to report the results of its
25 investigation to eBay. eBays negative response to this third party initiative cannot be
26 reconciled with its promise to constantly work to make its site safer for legitimate
27 brand owners. [According to] The Counterfeit Report, [i]nstead of adhering to their
28
69
COMPLAINT
1 own standards, embracing the results and protecting the eBay community, eBay
2 retaliated by blocking The Counterfeit Reports corporate eBay accounts.
eBay
3 altered feedback, changed resolved case dispositions and removed counterfeit

4 comments and warnings protecting consumers and legitimate trademark owners such
5 as Plaintiff. In contrast, the sellers of counterfeit products remained on eBay, and
6 transaction fees continued. [eBay] Management did not respond to The Counterfeit
7 Reports request for comment. The confirmed counterfeit and fake products included
8 over-the-counter (OTC) drugs, sporting goods, fragrances, auto accessories, phone
9 chargers and more.
10
lx
192. The Counterfeit Report reported the offending sellers to eBay, the
11 manufacturer and the FBIs Internet Crime Complaint Center (IC3), or US customs
12 for non-US eBay sellers. Disputes on the counterfeit purchases were initiated, and
13 following eBays [stated] counterfeit policy, the counterfeit products were not
14 returned. Trafficking in counterfeits is a crime, and while eBay sellers conceded to the
15 dispute claims, occasionally admitted to the fakes, and refunded the purchase
16 amounts, eBay allowed counterfeit sellers and listings to remain on eBay.
Even
17 sellers admitting to selling counterfeits were allowed to remain on the eBay website.
18 eBay states they do not notify the prior buyers of identified counterfeit sellers, which
19 may be thousands, that they may have received a counterfeit product.
20
lxi
193. According to The Counterfeit Report, eBays [blocking] practices are
21 not unprecedented. Early in the investigation, eBay blocked consumer protection

22 Counterfeit Product Alert tips published by The Counterfeit Report [on ebay.com]
23 to help consumers identify and avoid fake products listed on eBay. An eBay Office24 of-the-President spokesperson stated the alerts didnt violate eBay policy, but claimed
25 they violated the spirit of eBay.
lxii
26
27
28
70
COMPLAINT
194. The free tool that rights owners, such as Plaintiff, can use to report Fake
2 Products listed on ebay.com to eBay is described as follows on ebay.com under the

3 heading How eBay protects intellectual property (VeRO).
4
Were committed to protecting the intellectual property rights of third parties
and to providing our members with a safe place to buy and sell. We created the
Verified Rights Owner (VeRO) Program so that intellectual property owners
can easily report listings that infringe their rights.
We require that a rights owner be registered through VeRO before reporting
items to us. Rights owners sign legally binding documents when reporting
10
items to eBay.lxiii
11
195. As demonstrated herein, The VeRO program is a sham because, among
12 other things: (1) eBay promotes the unlawful activities of its Unauthorized Sellers by
13 soliciting eBay buyers to purchase obvious counterfeit products; (2) eBay takes no
14 action to remove or block sellers that it knows or should know are repeat infringers;
15 and (3) eBay takes no proactive steps to identify, isolate, and remove infringement
16 despite being on notice that certain types and descriptions of items are ipso facto
17 infringing because they are not offered by the rights holder. eBay routinely allows its
18 sellers to provide incomplete and/or false eBay User Personal Information so that it
19 is impossible for a trademark owner, such as Plaintiff, to correctly identify the sellers
20 of Fake Lunatik Products and take action against the many sellers who use eBay to
21 offer and sell Fake Lunatik Products.
22
196. Plaintiff, as the trademark holder for the Lunatik and TAKTIK brands
23 has been signed up on eBays VERO program as Lunatik since at least March 4,
24 2013. A true and correct copy of the EBAY VERO REPORTING TOOL USER
25 AGREEMENT between eBay and Plaintiff is annexed hereto as Exhibit 2.
26
197. The responses that Plaintiff has received from eBay in connection with
27 the VERO program are designed by eBay to create the false optic that, inter alia, it
28
71
COMPLAINT
1 has no knowledge or reason to suspect eBay received multiple NOCIs from Plaintiff
2 regarding repeated sale by the same ebay sellers identified of products that infringe on
3 Plaintiffs Marks. Virtually identical obvious infringing products continue to be listed
4 on ebay.com in July 2015 for Sellers 1, 2 and 3. If eBay and PayPal, in fact, were
5 working to make ebay.com safer, at a minimum, (i) each would mandate that every
6 seller provide complete and current contact information, consistent with the
7 requirements of [FinCEN]; and (ii) they would agree to adopt the best practices for
8 voluntary measures in addressing the sale of counterfeit products on the Internet,
9 described herein.
10
198. An eBay spokesperson is reported to have informed Julie Bort of the
11 Business Insider on or about November 11, 2014 that eBay takes accusations of
12 counterfeits seriously and is quoted as stating eBay runs several anti-counterfeit
13 initiatives including the Verified Rights Owner Program, and is continually
14 introducing new proactive measures to combat the global trade in counterfeits.
lxiv
15 But, Plaintiff is not aware of any new proactive measures to combat the rampant offer
16 and/or sale of Fake Products by eBay or PayPal since November 2014.
17
199. Rather, consistent with the disclosures in eBays Annual Report, eBay is
18 unwilling to refrain from trademark infringement. Specifically, eBay publicly admits

19 that it has resisted modifying its business practices in response to claims involving
20 trademark infringement because such changes allegedly could/would increase cost,
21 lower revenue, make eBays websites and mobile platforms less convenient to
22 customers, and require eBay to spend substantial resources to take additional
23 protective measures or discontinue certain service offerings in order to combat these
24 known and acknowledged illegal user practices.
25
26
27
28
72
COMPLAINT
J.
The Financial Services Provided by eBays Partner, PayPal, to
Unauthorized Sellers Materially Aid and Abet the Enterprise that
Trafficks In The Sale of Counterfeit Goods
4
5
6
7
8
9
10
263. eBay and PayPal hold themselves out as two great businesses with
leading global positions in commerce and payments, respectively. eBay publicly
reports that for more than a decade, eBay and PayPal have mutually benefited from
being part of one company. Until September 2014, the combination of the two
businesses and the synergies and benefits they offered to each other were so valuable
that the eBay board determined that separation of the two companies was not
appropriate.lxv
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
264. In September 2014, eBays board decided to separate eBay and PayPal.
According to eBay, as independent companies, it is expected that eBay and PayPal
will be sharper and stronger, and more focused and competitive as leading, standalone
companies in their respective markets. eBay and PayPal also will benefit from
additional flexibility and agility to pursue new market and partnership opportunities.
lxvi
265. PayPals reported mission post spin-off is to increase its relevance for
merchants, such as the Seller Defendants, and move their money anywhere in the
world, anytime, on any platform and through any device (e.g., mobile, tablets,
personal computers or wearables). To that end, PayPal operates a proprietary global
technology platform that enables merchants and consumers around the globe to
connect. In 2014, approximately162 million active customer accounts processed
payments on the PayPal platform. Total payment volume in or about 2014 increased
by 26% to $235 billion, as more consumers and merchants trusted PayPal to pay and
get paid. PayPal has significant global reach, processing transactions in more than 200
markets, allowing PayPal merchants, including the Seller Defendants, to receive
27
28
73
COMPLAINT
1 payments in more than 100 currencies, withdraw funds to their bank accounts in
2 57currencies and hold balances in their PayPal accounts in 26 currencies. PayPal
3 holds itself out as a leader in mobile payments and processed nearly 1 billion mobile
4 transactions in 2014 for [its] customers.
5
lxvii
266. That PayPal and eBay have been and post spin-off will continue to be
6 related parties, partners and joint venturers is admitted by both. Specifically, material
7 related party transactions between eBay and PayPal before the PayPal spin-off are
8 described in eBays publicly filed documents, including but not limited to in the notes
9 to the PayPal audited financial statements (opinion dated 2/25/15) included in the
10 PayPal Holdings, Inc. Registration Statement filed on or about February 2, 2015.
11
267. eBay and PayPal have also publicly reported that in connection with the
12 spin-off, PayPal will enter into various material agreements to effect the separation
13 and provide a framework for the continuing relationship between eBay and PayPal
14 post spin-off. Those material agreements include, but are not limited to, an operating
15 agreement, a transition services agreement, a tax matters agreement, an employee
16 matters agreement, an intellectual property matters agreement, an information
17 technology services agreement, data sharing agreements and a joint development
18 agreement. These agreements will provide for the allocation between PayPal and
19 eBay of eBays assets, employees, liabilities and obligations (including its
20 investments, property and employee benefits, indemnification obligations and tax
21 liabilities) attributable to periods prior to, at and after PayPals separation from eBay
22 and will govern certain relationships between PayPal and eBay after the spin-off.
23
268. Under the parties 5-year operating agreement, eBay is contractually
24 bound to maintain the majority of its GMV (the total volume in dollars of sales on
25 eBay) to be processed through PayPal. Specifically, eBay has guaranteed that 80% of
26 GMV is paid via PayPal, otherwise it will have to pay PayPal restitution.
27
28
74
COMPLAINT
269. Plaintiff is informed and believes that in furtherance of the eBay-PayPal
2 5-year operating agreement, on or about August 28, 2015, eBay announced that it is
3 now banning sellers from offering PayPal rivals ProPay and Skrill as payment
4 methods on its marketplace. The move comes the same day PayPal raised fees for
5 merchants processing over $3,000/month in payments - a 32% increase for higher
6 volume sellers.
7
270. In doing the acts herein alleged, eBay and PayPal each were acting
8 within the scope and course of their authority as such partners and joint venturers and
9 were acting with the permission and consent of each other Defendant. Moreover, by
10 operating a proprietary global technology platform that enables consumers around the
11 globe and merchants, such as the Seller Defendants, to connect, PayPal has materially
12 aided and abetted and will continue to materially aid and abet the Enterprise described
13 herein.
14
15
16
17
18
19
20
21
22
23
24
25
FIRST CAUSE OF ACTION AGAINST eBAY AND

THE SELLER DEFENDANTS
(Trademark Infringement Under Sections 32 and 43(a) of the
Lanham Act, 15 U.S.C. 1114, 1125(a))
271. Plaintiff repeats and realleges each and every allegation in the foregoing
paragraphs as though fully set forth herein.
272. Plaintiffs Marks are valid, federally registered trademarks entitled to
protection under the Lanham Act.
273. Plaintiffs Marks and the goodwill of the businesses associated with them
in the United States and throughout the world are of great and significant value, are
highly distinctive and the public and industry associate Plaintiffs Products with high
quality materials, style, and functionality.
26
27
28
75
COMPLAINT
274. eBay and the Seller Defendants and each of them are engaging in
2 intentional illegal conduct including but not necessarily limited to, the promotion,
3 advertisement, offer for sale, sale and distribution of obvious counterfeit Lunatik
4 products in violation of the Lanham Act, as amended.
5
275. As alleged more particularly herein, Plaintiff is informed and believes
6 that eBay on a regular and continuous basis promotes the sale of obvious counterfeit
7 Lunatik Products that infringe on Plaintiffs Marks by Unauthorized Sellers by,
8 among other things, the transmittal of automated emails to eBay buyers who have
9 browsed similar items.
10
276. According to eBay, in response to the Plaintiffs NOCIs, each of the
11 Seller Defendants should have been made aware that the Seller Defendant was
12 engaged in the promotion, advertisement, offer for sale, sale and distribution of
13 obvious counterfeit Lunatik Products that infringed on Plaintiffs Marks.
Also
14 according to eBay, each of the Seller Defendants should have been instructed to cease
15 and desist from such conduct. In response, the Seller Defendants and each of them
16 did not refrain from the promotion, advertisement, offer for sale, sale and distribution
17 of obvious counterfeit Lunatik products, as alleged more particularly herein. As of
18 July 2015, at least nine of the Seller Defendants continue to sell obvious counterfeit
19 Lunatik Products on ebay.com.
20
277. eBays and the Seller Defendants offering of counterfeit Lunatik
21 products bearing Lunatik registered trademarks is likely to cause consumer confusion

22 in violation of 15 U.S.C. 1114 by, among other things, selling products of inferior
23 quality under the brand. eBays and the Seller Defendants actions also constitute
24 unfair competition under 15 U.S.C. 1125(a) by, for example, eliminating Lunatiks
25 ability to excite the market with new colors of TAKTIK model phone cases other
26 than those it legitimately has offered. eBay and the Seller Defendants actions are
27
28
76
COMPLAINT
1 willful and purposeful, in violation of 15 U.S.C. 1117, entitling Lunatik to attorneys

2 fees and enhanced damages.
3
278. Plaintiff has been damaged by each of eBays and the Seller Defendants
4 infringement in an amount to be determined at trial.
For example and without
5 limitation, eBay and the Seller Defendants and each of them have been unjustly
6 enriched through their intentional unlawful and unauthorized sales of Fake Lunatik
7 Products.
8
279. Plaintiff has been, and absent injunctive relief will continue to be,
9 irreparably harmed by the actions of eBay and the Seller Defendants and each of
10 them.
11
280. Plaintiff has no adequate remedy at law for the foregoing wrongful
12 conduct.
13
SECOND CAUSE OF ACTION AGAINST eBAY
14
(Contributory Trademark Infringement and
15
Counterfeiting Under the Lanham Act)
16
17 paragraphs as though fully set forth herein.

18
19 protection under the Lanham Act.

20
21 in the United States and throughout the world are of great and significant value, are
22 highly distinctive and the public and industry associate Plaintiffs Products with high
23 quality materials, style, and functionality.
24
284. The Seller Defendants are engaging in intentional illegal conduct
25 including but not necessarily limited to the promotion, advertisement, offer for sale,
26 sale and distribution of obvious counterfeit Lunatik products in violation of the
27 Lanham Act, as amended.
28
Defendant eBay has actual knowledge of the Seller

77
COMPLAINT
1 Defendants illegal activities from, among other things, written notification by Plaintiff
2 to eBay and feedback that eBay collects from buyers.
3
285. eBay, by offering online marketing, financing, shipping, and/or payment
4 processing to the Seller Defendants that allowed the Seller Defendants to infringe
5 upon Plaintiffs Marks, aided, facilitated, participated in, and materially contributed to
6 the sale of Fake Products in violation of the Lanham Act, 15 U.S.C. 1114, 1116(d),
7 1117(b)-(c), and 1125(a).
For example and without limitation, Defendant eBay,
8 through PayPal participated in the sales of Fake Lunatik Products by accepting the
9 credit card numbers for the sales transactions of Fake Lunatik Products through its
10 wholly-owned subsidiary PayPal, processing the transactions and paying the proceeds
11 of the sales of the Fake Lunatik Products to the Seller Defendants.
Further, and
12 without limitation, eBay participated in the sales of Fake Lunatik Products by

13 knowingly allowing Internet merchants to offer Fake Lunatik Products for sale to
14 consumers, including the use of marketing techniques that infringed upon Plaintiffs
15 Marks.
16
286. eBay has materially encouraged, enabled and contributed to the
17 promotion, advertisement, offer for sale, sale and distribution of obvious counterfeit
18 Lunatik products on ebay.com by, among other things, providing critical online
19 marketing, financing and/or payment processing to the Seller Defendants, eBay
20 supplied the necessary marketplace for the sale of Fake Lunatik Products, and eBay
21 received a direct financial benefit for providing such services.
22
287. eBay exercised control over the means of the infringement, including, the
24 Lunatik products on ebay.com, described above. eBay maintains direct control and
25 monitoring of ebay.com, the instrumentality used by the third party Seller Defendants
26 to infringe on the plaintiffs mark. eBay knowingly provided essential services to the
27 Seller Defendants and other Unauthorized Sellers engaged in the promotion,
28
78
COMPLAINT
2 products in violation of the Lanham Act, as amended.
For example and without
3 limitation:
4
a.
Defendant PayPal handled the payment transactions for many of
the infringing sales, including sales by the Seller Defendants. Knowing that
sellers used PayPals payment processing and payment services to facilitate the
sale of Fake Lunatik Products through ebay.com, eBay nonetheless continued
to provide such sellers with PayPals services.
b.
ebay.com provided the marketplace for the sales of Fake Lunatik
10
Products and facilitated the financing and commercial operations of the Seller
11
Defendants and other eBay sellers involved in the offer and sale of Fake
12
Lunatik Products by providing marketing and search optimization services that
13
direct buyers to the Fake Lunatik Products, including the knowing use of
14
federally-registered marks as keywords in order to attract consumers to Fake
15
Lunatik Products offered for sale by the Seller Defendants, processing online
16
payment transactions for the Fake Lunatik Products, and shipping the Fake
17
Lunatik Products to consumers.
18
c.
ebay.com provided online marketing services to the Seller
19
Defendants and other eBay sellers whom eBay knew and had reason to know
20
were selling Fake Lunatik Products based on, inter alia, their alleged proactive
21
monitoring of counterfeit listings and proactive measures to combat the global
22
trade in counterfeits.
23
d.
eBay controls who may sell products on their platforms, and
24
online sellers are required to verify their identity before they are allowed to
25
list their products and services on ebay.com. eBay routinely protects and
26
conceals the identity of its sellers who are engaged in the offer and/or sale of
27
Fake Products
28
79
COMPLAINT
e.
eBay facilitates the continued operation of known infringers by
allowing them to continue selling infringing products through similar listings or
replacement listings after being placed on notice that a particular listing
infringes and removing it. It further facilitates this continued operation by
returning counterfeit products to the sellers, only for them to be resold through
infringing listings.
f.
eBay offers search options that help lead consumers to items that
eBay knows or should know are infringing because the brand owner does not
make items of the variety sought by the consumer. Indeed, eBay even sends
10
alerts to consumers when infringing products become available if none of the
11
type desired are available when a search is performed.
12
288. The Seller Defendants and other Unauthorized Sellers, with the intent to
13 pass off or borrow from Plaintiffs established good will, have displayed and in some
14 instances continue to display Plaintiffs Marks on obvious counterfeit Lunatik
15 Products in violation of the Lanham Act, as amended.
16
289. The intent of the Unauthorized Sellers to cause confusion, as described
17 herein, coupled with the use by the Unauthorized Sellers of counterfeit marks that
18 infringe on Plaintiffs Marks, gives rise to a presumption of the likelihood of
19 confusion.
20
290. eBays actions described above have caused and are likely to cause
21 confusion and mistake and to deceive potential customers and the general purchasing
22 public as to the source, origin, or sponsorship of the Fake Lunatik Products, and are
23 likely to deceive the public into believing that the Fake Lunatik Products that are the
24 subject of promotion, advertisement, offer for sale, sale and distribution of obvious
25 counterfeit Lunatik products by Unauthorized Sellers are associated with, or are
26 otherwise authorized by Plaintiff, all to the damage and detriment of Plaintiffs
27 reputation, goodwill, and sales.
28
80
COMPLAINT
291. eBay is aware of the infringing activities of its sellers on ebay.com as
2 alleged herein or has attempted to manufacture the false optic that it is not willfully
3 blind to such unlawful activity. eBay through PayPal investigates chargebacks and
4 chargeback disputes involving the sale of products of obvious counterfeit Lunatik
5 products and received documentation that provided eBay with notice that ebay.com
6 was being used by thousands of sellers in connection with the promotion and sale of
7 counterfeit iPhone cases that infringe on Plaintiffs Marks. In addition, eBay was
8 made aware of such activities on or about November 14 2014, when consumer
9 watchdog organization, The Counterfeit Report, alerted eBay that it had found
10 hundreds of counterfeits on the site, including obvious counterfeit Lunatik Product.
11 In response, eBay blocked the whistleblowers accounts and removed its comments
12 warning people about fake products.
eBay did this instead of removing the fake
13 products and blocking the sellers of them.

14
lxviii
292. Given that eBay had received thousands of NOCIs from Lunatik by
15 November 2014, eBay was already on notice when it received information about the
16 results of The Counterfeit Reports investigation, of the rampant infringement of
17 Plaintiffs Marks occurring through ebay.com. eBay should have investigated further,
18 but instead chose to ignore the obvious trademark infringements detailed in The
19 Counterfeit Report investigative report. eBays acts and omissions constitute willful
20 blindness to the rampant infringing activities of its sellers who promote and sell
21 counterfeit products on ebay.com
22
293. eBay therefore bears contributory liability for the infringement and
23 counterfeit use of Plaintiffs Marks by the Seller Defendants and other Unauthorized
24 Sellers, and each of them in violation of 15 U.S.C. 1051, et seq.
25
294. Plaintiff has been damaged by eBays contributory infringement in an
26 amount to be determined at trial and no less than the statutory damages to which
27 Plaintiff is entitled pursuant to 15 U.S.C. 1117(c)(2). For example and without
28
81
COMPLAINT
1 limitation, eBay has been unjustly enriched through the ebay.com sellers unlawful
2 and unauthorized sales of Fake Lunatik Products, for which eBay receives income
3 and/or transaction fees.
Further, the Seller Defendants actions are willful and
4 purposeful, in violation of 15 U.S.C. 1117, entitling Lunatik to attorneys fees and

5 enhanced damages.
6
7 irreparably harmed by eBays actions.

8
9 conduct.
10
THIRD CAUSE OF ACTION AGAINST eBAY AND
11
THE SELLER DEFENDANTS
12
(Trademark Dilution Under Section 43(c) of the
13
Lanham Act, 15 U.S.C. 1125(c))
14

16
298. Plaintiffs Marks have become famous marks within the meaning of the
17 Trademark Dilution Revision Act of 2006, and are immediately recognizable to the
18 relevant public as being associated with Lunatik. Plaintiffs Marks are the subject of
19 valid and subsisting registrations under the Lanham Act.
20
299. Because Plaintiffs Products have gained a reputation for superior quality
21 and excellence, Plaintiffs Marks have gained substantial renown and reputation.
22
300. Defendants use of Plaintiffs Marks is likely to cause blurring to and of
23 Plaintiffs Marks and impair the distinctiveness of Plaintiffs Marks. Consumers are
24 likely to associate Defendants uses of Plaintiffs Marks with the Plaintiffs Marks
25 themselves because of the similarity between Defendants use of Plaintiffs Marks
26 and Plaintiffs Marks themselves. In particular, the following factors make dilution
27 by blurring likely: (1) Defendants are making uses of Plaintiffs Marks themselves;
28
82
COMPLAINT
1 (2) Plaintiffs Marks have acquired tremendous distinctiveness through Plaintiffs

2 continuous promotion and uses of Plaintiffs Marks; (3) Plaintiffs Marks have
3 become famous and achieved a high level of recognition among the consuming
4 public; (4) Plaintiffs commercial use of its Marks is substantially exclusive to
5 Plaintiff and its agents and licensees; (5) Defendants intend to create an association
6 between Defendants uses of Plaintiffs Marks and Plaintiffs Marks themselves; and
7 (6) on information and belief, many consumers actually associate Defendants uses of
8 Plaintiffs Marks confusingly similar thereto with Plaintiffs Marks themselves.
9
301. Defendants conduct as alleged above is also likely to cause tarnishment
10 among Plaintiffs Marks that harms the reputation of Plaintiff because of the
11 similarity between Defendants uses of Plaintiffs Marks and Plaintiffs Marks
12 themselves. In particular, the Fake Lunatik Products sold, offered for sale, and/or
13 distributed by Defendants, which are of notoriously bad quality and made with cheap
14 materials, display Plaintiffs Marks in a manner that is confusingly similar to
15 Plaintiffs Products and therefore mislead consumers to believe that Plaintiffs
16 Products are of low quality.
17
302. Defendants conduct described above dilutes, blurs, tarnishes, and
18 whittles away at the distinctiveness of Plaintiffs Marks, and has caused actual
19 dilution and has detracted from the distinctiveness of the famous Plaintiffs Marks
20 with consequent damage to Plaintiff and to the substantial business and goodwill
21 symbolized by Plaintiff Marks in violation of the Federal Trademark Dilution Act, 15
22 U.S.C. 1125(c).
23
303. Defendants acts of trademark dilution have caused and, unless restrained
24 will continue to cause, great and irreparable injury to Plaintiff, to Plaintiffs Marks,
25 and to the substantial business and goodwill represented thereby, in an amount that
26 cannot be presently ascertained, leaving Plaintiff with no adequate remedy at law.
27
28
83
COMPLAINT
304. Defendants conduct has been undertaken with a willful intent to trade on
2 the reputation of Plaintiff and to cause dilution of the famous Plaintiffs Marks, and
3 this conduct entitles Plaintiff to damages and the other remedies available pursuant to
4 15 U.S.C. 1125(c)(2).
5
FOURTH CAUSE OF ACTION AGAINST eBAY
(Direct Trademark Infringement Through Initial Interest Confusion)

9
10 protection under the Lanham Act.

11
12 in the United States and throughout the world are of great and significant value, are
13 highly distinctive and the public and industry associate Plaintiffs Products with high
14 quality materials, style, and functionality.
15
308. Lunatik does not sell on ebay.com, and does not authorize any of its
16 distributors to sell on ebay.com.

17
309. Since at least February 2013, obvious counterfeit Lunatik products
18 bearing Lunatik marks and mirroring Lunatik designs, represented as being new
19 have been the subject of listings on ebay.com. In addition, at all relevant times, a
20 search for the words Lunatik or Taktik Plaintiffs federally registered
21 trademarks produces lists of products that directly compete with Lunatiks products
22 and in many cases infringe patents and trademarks covering them.
23
310. These products are often designed to look like Lunatik products, and are
24 advertised to make a consumer believe they are Lunatik products. In many cases the
25 advertisements associated with the listings are lifted from advertisements created by
26 and used by Lunatik.
27
28
84
COMPLAINT
311. There is no statement on ebay.com advising consumers that Lunatik does
2 not offer or sell its new products through ebay.com.

3
312. By producing images of products designed to look like legitimate
4 Lunatik products, some even using Lunatik registered trademarks, in response to a

5 search using Lunatiks registered LUNATIK and TAKTIK trademarks, and without
6 identifying that said images are of products NOT made or endorsed by Lunatik, eBay
7 is causing initial interest confusion that detracts from the possibility of a consumer
8 finding and purchasing a legitimate Lunatik product..
9
313. Plaintiff has been damaged by eBays infringement in an amount to be
10 determined at trial.
For example and without limitation, eBay has been unjustly
11 enriched through the unlawful and unauthorized sales of Fake Lunatik Products.
12
13 irreparably harmed by eBays actions.

14
15 conduct.
16
FIFTH CAUSE OF ACTION AGAINST ALL DEFENDANTS
17
(Violations of Racketeer Influenced and Corrupt Organizations Act
18
(RICO) 18 U.S.C. 1962(c))
19

21
317. At all relevant times, Plaintiff is a person within the meaning of 18
22 U.S.C. 1961(3) and 1962(c).

23
318. At all relevant times, each Defendant is a person within the meaning of
24 18 U.S.C. 1961(3) and 1962(c).

25
The RICO Enterprise
26
319. The Defendants and their co-conspirators constitute an association-in-
27 fact enterprise within the meaning of 18 U.S.C. 1961(4) and 1962(c), referred to
28
85
COMPLAINT
1 herein as the Enterprise. Each of the Defendants participated in the operation or

2 management of the Enterprise because they engaged in acts that they knew would
3 further the scheme to sell and profit from the sale of obvious Fake Lunatik Products,
4 and that they further intended to further that scheme, and exercised substantial
5 discretion in doing so.
6
320. The Enterprise consists of eBay, PayPal, the Seller Defendants, and other
7 Unauthorized Sellers, some of whom are unidentified co-conspirators, using

8 eBay.com and PayPals proprietary global technology platform to effect the
10 Lunatik products in violation of the Lanham Act, who have joined together to form an
11 enterprise in fact whose purpose is to sell and profit from the promotion,
13 products. The Unauthorized Sellers knowingly have engaged in the promotion,
15 products, using eBay.com and the services of eBay and PayPal to effect such
16 activities.
eBay knowingly provided the Seller Defendants with the online
17 marketplace and other services to facilitate the activities of the Unauthorized Sellers,
18 including marketing, shipping and/or financing services that allowed the Seller
19 Defendants to transact their illegal sales of the Fake Lunatik Products, and from
20 which Defendants eBay and PayPal derived substantial profits.
PayPal knowing
21 provided the Seller Defendants with its proprietary global technology platform to
22 facilitate the activities of the Unauthorized Sellers.
23
321. Defendants and their co-conspirators are a group of persons associated
24 together in fact for the common purpose of carrying out an ongoing criminal
25 enterprise, as described in the foregoing paragraphs of this Complaint; namely,
26 through a systematized operation to sell and profit from the sale of obvious
27 counterfeit goods including obvious Fake Lunatik Products that infringe on one or
28
86
COMPLAINT
1 more of Plaintiffs Marks.
These Defendants and their co-conspirators have
2 organized their activities into a cohesive group with specific and assigned
3 responsibilities and division of tasks, operating in the United States, China, and
4 elsewhere.
Merchants including the Unauthorized Sellers have engaged in the
6 Lunatik products through ebay.com. While Plaintiff is informed and believes that the
7 membership of this Enterprise has changed over time and its members may have held
8 different roles at different times, the Enterprise has generally been structured to
9 operate as a unit in order to accomplish the goals of the criminal scheme, profiting
10 from the promotion, advertisement, offer for sale, sale and distribution of obvious
11 counterfeit Lunatik products in violation of the Lanham Act, as amended, including
12 through the following acts:
13
a.
eBay and PayPal have participated in the operation and
14
management of the Enterprise by knowingly facilitating the promotion,
15
advertisement, offer for sale, sale and distribution of obvious counterfeit
16
Lunatik products, including, inter alia, Fake Products that bear Plaintiffs
17
Marks and copy the designs and packaging associated with Plaintiffs Products,
18
through ebay.com.
19
Lunatik Products with storefronts on ebay.com and (i) permits them to list their
20
Fake Lunatik Products for sale, (ii) permits known sellers of obvious Fake
21
Lunatik Products to continue selling obvious Fake Lunatik Products on
22
ebay.com, (iii) provides marketing and search optimization services that solicits
23
and direct buyers to the Fake Lunatik Products, which use federally-registered
24
marks as keywords in order to attract consumers to Fake Lunatik Products
25
offered for sale by the Unauthorized Sellers, and insert additional terms and
26
phrases into the metadata for searches performed on ebay.com in order to direct
27
consumers to particular Fake Lunatik Products offered for sale. In addition,
28
Specifically, eBay knowingly provides sellers of Fake
87
COMPLAINT
eBay has directed and/or contracted with other conspirators, including PayPal,
to take actions necessary to accomplish the overall aims of the criminal
enterprisenamely, processing payments for the sale of Fake Lunatik
Products, and providing shipping and delivery services for Fake Lunatik
Products purchased through eBay.com. There can be no doubt that this is
willful and intentional. eBays knowledge is demonstrated by at least the
following (i) the fact that the Fake Lunatik Products sold on ebay.com
obviously infringe on Plaintiffs Marks because the Fake Lunatik Products that
bear Plaintiffs Marks, identified in the listings, are not in Plaintiffs product
10
line; (ii) Plaintiffs repeated notifications to eBay regarding the presence of
11
Fake Lunatik Products on ebay.com: (iii) eBays ineffective takedown
12
procedures; (iv) eBays aggressive solicitation to attract consumers to Fake
13
Lunatik Products offered for sale by the Seller Defendants; (vi) the association
14
of specific metadata with keywords to direct prospective purchasers to
15
storefronts selling Fake Lunatik Products; and (vii) eBays failure to adopt
16
recognized best practices for voluntary measures in addressing the sale of
17
counterfeit products on the Internet for either eBay or PayPal.
18
b.
Defendant PayPal has also participated in the operation and
19
management of the Enterprise by, among other things, its operation of a
20
proprietary global technology platform that enables merchants, including the
21
Seller Defendants, and consumers around the globe to connect, processing the
22
transactions for the sale of Fake Lunatik Products and conducting online
23
payment processing for counterfeit goods purchased through ebay.com,
24
including Fake Lunatik Products that infringe on one or more of Plaintiffs
25
Trademarks. PayPal admits in publicly filed reports with the SEC that it
26
knowingly allows its services to be used by Unauthorized Sellers in connection
27
28
88
COMPLAINT
with Unauthorized Sellers trafficking in counterfeit products being sold on
ebay.com.
c.
The Seller Defendants have also participated in the operation and
management of the Enterprise by the promotion, advertisement, offer for sale,
sale and distribution of obvious counterfeit Lunatik products on ebay.com. The
Seller Defendants knowledge and intent is demonstrated by their knowing and
conscious promotion, advertisement, offer for sale, sale and distribution of
obvious counterfeit Lunatik products on ebay.com, and their repeated shipment
of such goods to the United States and elsewhere.
10
d.
Unidentified co-conspirators have been integrally involved in
11
various stages of the Defendants criminal enterprise, directing, controlling,
12
ratifying, facilitating, or otherwise participating in the manufacture,
13
distribution, sale, and advertisement of Fake Lunatik Products through
14
ebay.com.
15
322. At all relevant times, the Enterprise was engaged in, and its activities
16 affected, interstate and foreign commerce within the meaning of 18 U.S.C. 1962(c),
17 because Defendants have sold and continue to sell a substantial volume of Fake
18 Lunatik Products into the United States, causing harm to Plaintiff in their business
19 and property.
Pattern of Racketeering Activity
20
21
323. The Defendants conducted or participated, directly or indirectly, in the
22 conduct, management, or operation of the Enterprises affairs through a pattern of

23 racketeering activity within the meaning of 18 U.S.C. 1961(5) and in violation of
24 18 U.S.C. 1962(c).
This pattern included multiple instances of trafficking in
25 counterfeit goods in violation of 18 U.S.C. 2320(a)(1), and wire fraud in violation

26 of 18 U.S.C. 1341, 1343. These predicate acts are all related to each other and to
27 the Enterprises purpose of selling and profiting from the sale of counterfeit goods.
28
89
COMPLAINT
1 Moreover, this pattern has been ongoing and will likely continue into the future.
2 Indeed, Plaintiff is informed and believes that there are at least fifty storefronts on
3 ebay.com now involved in the promotion, advertisement, offer for sale, sale and
4 distribution of obvious counterfeit Lunatik products on ebay.com. Each sale of Fake
5 Lunatik Products, and each transfer of funds in payment for the purchase of Fake
6 Lunatik Products using services offered by PayPal, causes new injury to Plaintiff in
7 the form of brand dilution, loss of goodwill and lost sales, as set forth below, injuries
8 that Plaintiff would not have suffered but for the conduct of the Enterprise.
9
Pattern of Racketeering Activity:
10
Numerous Instances of Trafficking in Counterfeit Goods
11
In Violation of 18 U.S.C. 2320(a)(1)
12
324. At all times material to this Complaint, Plaintiff was engaged in
13 interstate commerce and in an industry that affects interstate commerce.

14
325. As described herein, Defendants have engineered an organized operation
15 to offer, sell and profit from the sale of counterfeit goods through ebay.com by, and
16 among other things, the promotion, advertisement, offer for sale, sale and distribution
17 of obvious counterfeit Lunatik products which in listings on ebay.com bear marks that
18 are identical to, or substantially indistinguishable from, Plaintiffs federally registered
19 marks, the use of which is likely to cause confusion, mistake, or to deceive are
20 used.
21
326. In furtherance of their scheme, and as described herein, Defendants
22 transported, transferred, or otherwise disposed ofand attempted to transport,

23 transfer, or otherwise dispose ofcounterfeit goods sold on ebay.com to their online
24 purchasers in exchange for money, and/or made or obtained control of the counterfeit
25 goods with intent to so transport, transfer, or dispose of. Such counterfeit goods that
26 Defendants transported, transferred, or otherwise disposed of, or made or obtained
27 control of with intent to so transport, transfer, or dispose of, include, but are not
28
90
COMPLAINT
1 limited to, Fake Products that infringe on one or more of Plaintiffs Trademarks by
2 copying the designs and packaging associated with Plaintiffs Products.
While
3 Plaintiff contends that Defendants sale and transport of such Fake Lunatik Products
4 is vast in volume and will be revealed by discovery in this action, such sales and
5 transport to the United States include at least the following instances:
6
a.
On or about May 27, 2015, Seller 1 caused a listing to be posted
on ebay.com for the sale of obvious Fake Lunatik iPhone cases for iPhone 6. It
has been reported on ebay.com that Seller 1 has sold at least 10,520 counterfeit
Lunatik iPhone cases. As alleged more particularly herein, eBay continues to
10
allow Seller 1 to list for sale obvious counterfeit iPhone cases on ebay.com that
11
unlawfully infringe on Plaintiffs Marks.
12
b.
On or about July 27, 2015, Seller 2 caused a listing to be posted on
13
ebay.com for the of the following obvious Fake Lunatik iPhone cases:
14
Waterproof Shockproof Aluminum Grilla Glass Metal Case Cover For Apple
15
iPhone @@. It has been reported on ebay.com that Seller 2 has sold at least
16
2,711 counterfeit Lunatik iPhone cases. As alleged more particularly herein,
17
eBay continues to allow Seller 2 to list for sale obvious counterfeit iPhone
18
cases on ebay.com that unlawfully infringe on Plaintiffs Marks.
19
c.
On or about May 19, 2015, Seller 3 caused multiple listings to be
20
posted on ebay.com for the sale of obvious Fake Lunatik iPhone cases for
21
iPhone 5. It has been reported on ebay.com that Seller 3 has sold at least
22
25,069 counterfeit Lunatik iPhone cases.
23
d.
On or about May 27, 2015, Seller 3 caused at least two listings to
24
be posted on ebay.com for the sale of obvious Fake Lunatik iPhone cases for
25
iPhone 5. As alleged more particularly herein, eBay continues to allow Seller 3
26
to list for sale obvious counterfeit iPhone cases on ebay.com that unlawfully
27
infringe on Plaintiffs Marks.
28
91
COMPLAINT
e.
On or about July 15, 2014, Seller 2 (previously identified as
Seller 4) caused multiple listings to be posted on ebay.com for the sale of
obvious Fake Lunatik TAKTIK iPhone cases.
ebay.com that Seller 2 (previously identified as Seller 4) has sold at least
eBay continues to allow Seller 2 (previously identified as Seller 4) to list for
sale obvious counterfeit iPhone cases on ebay.com that unlawfully infringe on
Plaintiffs Marks.
f.
It has been reported on
10
Seller 5) caused a listing to be posted on ebay.com for sale of the following
11
obvious Fake Lunatik iPhone cases:
12
Gorilla Metal Cover Case For iPhone Models.
13
6PLUS + 4/4S/5/5S/5C. It has been reported on ebay.com that Seller 3
14
(previously identified as Seller 5) has sold at least 10,448 counterfeit Lunatik
15
iPhone cases. As alleged more particularly herein, eBay continues to allow
16
Seller 3 (previously identified as Seller 5) to list for sale obvious counterfeit
17
iPhone cases on ebay.com that unlawfully infringe on Plaintiffs Marks.
18
g.
Waterproof Shockproof Aluminum

Available for iPhone 6 +
19
20
21
ebay.com that Seller 2 (previously identified as Seller 6) has sold at least 299
22
counterfeit Lunatik iPhone cases. As alleged more particularly herein, eBay
23
continues to allow Seller 2 (previously identified as Seller 6) to list for sale
24
obvious counterfeit iPhone cases on ebay.com that unlawfully infringe on
25
Plaintiffs Marks.
26
27
28
h.

92
COMPLAINT
Plaintiffs Marks.
i.
10
11
12
13
14
Plaintiffs Marks.
15
j.
16
17
18
k.
On or about June 1, 2015, Seller 2 (previously identified as
19
20
obvious Fake Lunatik iPhone cases for iPhone 5 and iPhone 6. It has been
21
reported on ebay.com that Seller 2 (previously identified as Seller 9) sold at
22
least 787 counterfeit Lunatik iPhone cases.
23
herein, eBay continues to allow Seller 2 (previously identified as Seller 9) to
24
list for sale obvious counterfeit iPhone cases on ebay.com that unlawfully
25
26
27
28
l.
As alleged more particularly
93
COMPLAINT
288 counterfeit Lunatik iPhone cases. As alleged more particularly herein,
eBay continues to allow Seller 2 (previously identified as Seller 10) to list
for sale obvious counterfeit iPhone cases on ebay.com that unlawfully infringe
on Plaintiffs Marks.
m.
10
11
12
13
14
Plaintiffs Marks.
15
n.
On or about July 25, 2015, eBay transmitted an email to an eBay
16
buyer offering to sell counterfeit Lunatik iPhone cases described as
17
Waterproof Shockproof Aluminum Grilla [sic] Glass Metal Case Cover for
18
Apple iPhone @@ for $9.23. Days later, on July 30, 2015, the same eBay
19
buyer was directly solicited by eBay to purchase obvious counterfeit Lunatik
20
iPhone cases.
21
o.
Plaintiff is informed and believe that eBay directly solicited a
22
buyer to purchase some or all of the following Fake Lunatik Products on or
23
about the dated indicated:
24
(i)
On or about June 24, 2015, eBay directly solicited a buyer
25
to purchase a counterfeit yellow aluminum LUNATIK branded iPhone 6
26
Cell Phone Case listed on ebay.com by eBay seller firsttopmall2013
27
(7892).
28
94
COMPLAINT
(ii)
to purchase a counterfeit red aluminum LUNATIK branded iPhone 6
Cell Phone Case listed on ebay.com by eBay seller misskiss6699
(729).
(iii)
to purchase a counterfeit black aluminum LUNATIK branded iPhone 6
Cell Phone Case listed on ebay.com by eBay seller max-access (799).
(iv)
On or about June 4, 2015, eBay directly solicited a buyer to
purchase counterfeit gold plated and yellow aluminum LUNATIK
10
branded and boxed TakTik iPhone 4 Cell Phone Cases listed on
11
ebay.com by eBay seller et8shop_hy (20731)
12
(v)
On or about May 15, 2015, eBay directly a buyer to
13
purchase a counterfeit black aluminum LUNATIK branded and packaged
14
TakTik Extreme iPhone 6 Cell Phone Case listed on ebay.com by eBay
15
seller 9hkk0432 (152).
16
(vi)
On or about January 15, 2015, eBay directly solicited a
17
buyer to purchase a counterfeit gold aluminum LUNATIK branded
18
iPhone 5 Cell Phone Case listed on ebay.com by eBay seller
19
uncletommall (11661).
20
(vii)
On or about November 30, 2014, eBay directly solicited a
21
buyer to purchase a counterfeit yellow aluminum LUNATIK branded
22
iPhone 5 Cell Phone Case listed on ebay.com by eBay seller slysky6688
23
(3493).
24
(viii) On or about November 30, 2014, eBay directly solicited a
25
buyer to purchase a counterfeit red aluminum LUNATIK branded iPhone
26
5 Cell Phone Case listed on ebay.com by eBay seller sohishopping525
27
(8380).
28
95
COMPLAINT
Case 8:15-cv-01330-JLS-KES Document 58 Filed 11/20/15 Page 100 of 117 Page ID

#:490
(ix)
On or about May 15, 2015, eBay directly solicited a buyer
to purchase a counterfeit white aluminum LUNATIK branded and
packaged TakTik Extreme iPhone 6 Cell Phone Case listed on ebay.com
by eBay seller Casemasterelite (136).
(x)
to purchase a white counterfeit aluminum LUNATIK branded and
by eBay seller ultradeal2013 (2566).
(xi)
10
to purchase a black counterfeit aluminum LUNATIK branded and
11
12
by eBay seller alanw (22).
13
(xii)
14
to purchase a silver counterfeit aluminum LUNATIK branded and
15
16
by eBay seller nysltd (9530).
17
(xiii) On or about February 16, 2015, eBay directly solicited a
18
buyer to purchase a counterfeit aluminum LUNATIK branded and
19
20
by eBay seller b4sos (266).
21
327. Defendants participated in the scheme knowing full well that the goods
22 they were (1) transporting, transferring, or otherwise disposing of; (2) attempting to
23 transport, transfer, or otherwise dispose of; and/or (3) making or obtaining control of
24 with intent to so transport, transfer, or dispose of, were counterfeit. Defendants are
25 engaged in a wide-ranging scheme to sell and profit from the sale of goods upon
26 which or in connection with which counterfeit marks are knowingly used.
27
28
96
COMPLAINT

#:491
328. Moreover, Defendants participation in the scheme was intentional
2 Defendants intended to (1) transport, transfer, or otherwise dispose of; (2) attempt to
3 transport, transfer, or otherwise dispose of; and/or (3) make or control goods known
4 by them to be counterfeit.
5
329. Accordingly, Defendants have unlawfully trafficked, attempted to traffic
6 and aided and abetted the trafficking, as that term is defined in 18 U.S.C.
7 2320(e)(2), of goods upon which or in connection with which counterfeit marks, as
8 that term is defined in 18 U.S.C. 2320(f)(1), were used, in violation of 18 U.S.C.
9 2320(a)(1).
10
Pattern of Racketeering Activity: Multiple Instances of Wire Fraud
11
In Violation of 18 U.S.C. 1343
12
330. As described herein, utilizing the proprietary global online technology
13 platform operated by Defendant PayPal that enables merchants and consumers around
14 the globe to connect, the Enterprise has engaged in a scheme to sell and profit from
15 the sale of counterfeit goods through ebay.com by, among other things, the
16 promotion, advertisement, offer for sale, sale, financing and distribution of obvious
17 counterfeit Lunatik products. In furtherance of this scheme, the Enterprise has
18 engaged in multiple counts of wire fraud in violation of 18 U.S.C. 1343.
19 Specifically, Defendants misappropriation of Plaintiffs intellectual property through
20 the promotion, sale, and shipment of Fake Lunatik Products for profit, constitutes a
21 scheme or artifice to defraud, or for obtaining money or property by means of false
22 or fraudulent pretenses, representations, or promises, within the meaning of Section
23 1343, and Defendants have knowingly transmitted or caused to be transmitted by
24 means of wire communication in interstate and foreign commerce multiple
25 communications for the purpose of executing this scheme, specifically through the
26 operation of interactive websites used to promote and sell Fake Lunatik Products,
27 including specifically targeting consumers in the United States, and by means of
28
97
COMPLAINT

#:492
1 electronic communications used to facilitate and complete such sales with consumers
2 in the United States and elsewhere. By means of this scheme, Defendants have (1)
3 obtained money from consumers purchasing Fake Lunatik Products because of their
4 misappropriation of Plaintiffs Marks; and (2) wrongfully obtained the value of
5 Plaintiffs intellectual property through the sale of Fake Lunatik Products.
This
6 conduct has directly harmed both consumers and Plaintiff by sowing confusion
7 among consumers seeking authentic Plaintiffs Products and post-sale confusion
8 among consumers who come in contact with the Fake Products and associate their
9 inferior quality with Plaintiffs Marks.
10
331. As evidenced by the routine nature of Defendants promotion and sale of
11 counterfeit items and the volume of traffic experienced by ebay.com, Plaintiff

12 believes that the actual volume of Defendants use of the sales and shipments of Fake
13 Lunatik Products to customers in the United States and elsewhere is vast and will be
14 revealed in discovery in this action, but such sales and shipments include at least the
15 following specific instances:
16
a.
On or about May 27, 2015, Seller 1 caused a listing to be posted
17
on ebay.com for the sale of obvious Fake Lunatik iPhone cases for iPhone 6. It
18
has been reported on ebay.com that Seller 1 has sold at least 10,520 counterfeit
19
Lunatik iPhone cases. As alleged more particularly herein, eBay continues to
20
allow Seller 1 to list for sale obvious counterfeit iPhone cases on ebay.com that
21
unlawfully infringe on Plaintiffs Marks.
22
b.
On or about July 27, 2015, Seller 2 caused a listing to be posted
23
on ebay.com for the of the following obvious Fake Lunatik iPhone cases:
24
Waterproof Shockproof Aluminum Grilla Glass Metal Case Cover For Apple
25
iPhone @@. It has been reported on ebay.com that Seller 2 has sold at least
26
27
eBay continues to allow Seller 2 to list for sale obvious counterfeit iPhone
28
98
COMPLAINT

#:493
1
2
cases on ebay.com that unlawfully infringe on Plaintiffs Marks.

c.
On or about May 19, 2015, Seller 3 caused multiple listings to be
posted on ebay.com for the sale of obvious Fake Lunatik iPhone cases for
iPhone 5. It has been reported on ebay.com that Seller 3 has sold at least
25,069 counterfeit Lunatik iPhone cases.
d.
On or about May 27, 2015, Seller 3 caused at least two listings to
be posted on ebay.com for the sale of obvious Fake Lunatik iPhone cases for
iPhone 5. As alleged more particularly herein, eBay continues to allow Seller 3
to list for sale obvious counterfeit iPhone cases on ebay.com that unlawfully
10
11

e.
12
13
14
15
16
17
18
Plaintiffs Marks.
19
f.
20
Seller 5) caused a listing to be posted on ebay.com for sale of the following
21
obvious Fake Lunatik iPhone cases:
22
Gorilla Metal Cover Case For iPhone Models.
23
6PLUS + 4/4S/5/5S/5C. It has been reported on ebay.com that Seller 3
24
(previously identified as Seller 5) has sold at least 10,448 counterfeit Lunatik
25
iPhone cases. As alleged more particularly herein, eBay continues to allow
26
Seller 3 (previously identified as Seller 5) to list for sale obvious counterfeit
27
iPhone cases on ebay.com that unlawfully infringe on Plaintiffs Marks.
28
99
COMPLAINT
Waterproof Shockproof Aluminum

Available for iPhone 6 +

#:494
g.
Plaintiffs Marks.
h.
10
11
12
13
14
15
16
Plaintiffs Marks.
17
i.
18
19
20
21
22
23
24
Plaintiffs Marks.
25
j.
26
27
28
100
COMPLAINT

#:495
k.
On or about June 1, 2015, Seller 2 (previously identified as
obvious Fake Lunatik iPhone cases Seller 2 (previously identified as Seller 9)
sold at least 787 counterfeit Lunatik iPhone cases. As alleged more particularly
herein, eBay continues to allow Seller 2 (previously identified as Seller 9) to
list for sale obvious counterfeit iPhone cases on ebay.com that unlawfully
8
9
l.
10
11
12
288 counterfeit Lunatik iPhone cases. As alleged more particularly herein,
13
14
15
Plaintiffs Marks.
16
m.
17
18
19
20
21
22
23
Plaintiffs Marks.
24
n.
On or about July 25, 2015, eBay transmitted an email to an eBay
25
buyer offering to sell counterfeit Lunatik iPhone cases described as
26
Waterproof Shockproof Aluminum Grilla [sic] Glass Metal Case Cover for
27
Apple iPhone @@ for $9.23. Days later, on July 30, 2015, the same eBay
28
101
COMPLAINT

#:496
buyer was directly solicited by eBay to purchase obvious counterfeit Lunatik
iPhone cases.
o.
Plaintiff is informed and believe that eBay directly solicited a
buyer to purchase some or all of the following Fake Lunatik Products on or
about the dated indicated:
(i)
to purchase a counterfeit yellow aluminum LUNATIK branded iPhone 6
Cell Phone Case listed on ebay.com by eBay seller firsttopmall2013
(7892).
10
(ii)
11
to purchase a counterfeit red aluminum LUNATIK branded iPhone 6
12
Cell Phone Case listed on ebay.com by eBay seller misskiss6699
13
(729).
14
(iii)
15
to purchase a counterfeit black aluminum LUNATIK branded iPhone 6
16
Cell Phone Case listed on ebay.com by eBay seller max-access (799).
17
(iv)
On or about June 4, 2015, eBay directly solicited a buyer to
18
purchase counterfeit gold plated and yellow aluminum LUNATIK
19
branded and boxed TakTik iPhone 4 Cell Phone Cases listed on
20
ebay.com by eBay seller et8shop_hy (20731)
21
(v)
On or about May 15, 2015, eBay directly a buyer to
22
purchase a counterfeit black aluminum LUNATIK branded and packaged
23
TakTik Extreme iPhone 6 Cell Phone Case listed on ebay.com by eBay
24
seller 9hkk0432 (152).
25
26
(vi)
On or about January 15, 2015, eBay directly solicited a
buyer to purchase a counterfeit gold aluminum LUNATIK branded
27
28
102
COMPLAINT

#:497
iPhone 5 Cell Phone Case listed on ebay.com by eBay seller
uncletommall (11661).
(vii) On or about November 30, 2014, eBay directly solicited a
buyer to purchase a counterfeit yellow aluminum LUNATIK branded
iPhone 5 Cell Phone Case listed on ebay.com by eBay seller slysky6688
(3493).
(viii) On or about November 30, 2014, eBay directly solicited a
buyer to purchase a counterfeit red aluminum LUNATIK branded iPhone
5 Cell Phone Case listed on ebay.com by eBay seller sohishopping525
10
11
(8380).
(ix)
12
to purchase a counterfeit white aluminum LUNATIK branded and
13
14
by eBay seller Casemasterelite (136).
15
(x)
16
to purchase a white counterfeit aluminum LUNATIK branded and
17
18
by eBay seller ultradeal2013 (2566).
19
(xi)
20
to purchase a black counterfeit aluminum LUNATIK branded and
21
22
by eBay seller alanw (22).
23
(xii) On or about May 12, 2015, eBay directly solicited a buyer
24
to purchase a silver counterfeit aluminum LUNATIK branded and
25
26
by eBay seller nysltd (9530).
27
28
103
COMPLAINT

#:498
(xiii) On or about February 16, 2015, eBay directly solicited a
buyer to purchase a counterfeit aluminum LUNATIK branded and
by eBay seller b4sos (266).
Summary of the Pattern of Racketeering Activity Alleged
Against Each RICO Defendant
332. eBay has committed numerous counterfeiting violationsintentionally
8 trafficking or causing to traffic counterfeit goods, conspiring to traffic counterfeit

9 goods, and aiding and abetting the trafficking of counterfeit goodsall in furtherance
10 of Defendants organized operation to sell and profit from the sale of obvious
11 counterfeit goods, including Fake Lunatik Products bearing Plaintiffs Marks. eBay
12 has also committed numerous mail and wire fraud violations, in which eBay used or
13 caused to be used the mail or wires in furtherance of Defendants widespread scheme
14 to sell and profit from the sale of Fake Lunatik Products
15
333. Using its proprietary global online technology platform that enables
16 merchants and consumers around the globe to connect, Defendant PayPal has
17 committed numerous predicate acts, including mail and wire fraud and trafficking in
18 counterfeit goods. PayPal used or caused to be used the mail or wires in furtherance
19 of Defendants wide-spread scheme to sell and profit from the sale of counterfeit
20 goods, including the Fake Products bearing Plaintiff Marks. In addition, PayPal has
21 both conspired to traffic in counterfeit goods and aided and abetted the trafficking of
22 counterfeit goods in furtherance of Defendants organized operation to sell and profit
23 from the sale of counterfeit goods.
24
334. The Seller Defendants have committed numerous counterfeiting
25 violationsintentionally trafficking or causing to traffic counterfeit goods, conspiring

26 to traffic counterfeit goods, and aiding and abetting the trafficking of counterfeit
27 goods, including the Fake Products bearing Plaintiffs Marks, all in furtherance of
28
104
COMPLAINT

#:499
1 Defendants organized operation to sell and profit from the sale of Fake Products.
2 The Seller Defendants have also committed numerous mail and wire fraud violations,
3 including without limitation website postings and online advertising of Fake Lunatik
4 Products for sale, in which the Seller Defendants used or caused to be used the mail or
5 wires in furtherance of Defendants widespread scheme to sell and profit from the sale
6 of Fake Lunatik Products.
7
335. Each of the Defendants has engaged in multiple predicate acts, including
8 trafficking in Fake Lunatik Products, and engaging in mail and wire fraud in order to
9 effectuate such sales, as described in the foregoing paragraphs. The conduct of each
10 of the Defendants described in the foregoing paragraphs constitutes a pattern of
11 racketeering activity within the meaning of 18 U.S.C. 1961(5).
12
336. Plaintiff has been injured in their businesses and property by reason of
13 Defendants violations of 18 U.S.C. 1962(c). The injuries to Plaintiff caused by

14 reason of the violations of 18 U.S.C. 1962(c) include but are not limited to damage
15 to the value of Plaintiffs intellectual property and other assets, lost sales, and direct
16 expenses from Plaintiffs efforts to stop the sale of Fake Lunatik Products through
17 eBays ineffective takedown procedures. More specifically, Defendants racketeering
18 activities have caused damage to Plaintiffs reputation, goodwill, and sales, including
19 but not limited to lost sales from customers that would have purchased Plaintiffs
20 Authentic Products but for the availability of inexpensive Fake Lunatik Products, and
21 prospective customers who choose not to purchase Plaintiffs Authentic Products
22 because of the availability of inferior inexpensive Fake Lunatik Products. Further,
23 these injuries to Plaintiff were a direct, proximate, and reasonably foreseeable result
24 of the violation of 18 U.S.C. 1962(c), and Defendants conduct is the direct and but
25 for cause of these injuries. Furthermore, each new sale of Fake Lunatik Products, and
26 each new commission of one of the predicate acts identified above, causes new
27 injuries to Plaintiff.
28
105
COMPLAINT

#:500
337. Given the organized and pervasive nature of the Enterprises promotion
2 and sale of Fake Lunatik Products, and the Enterprises continued and ongoing
3 operations, which are likely to extend into the future, Plaintiff has been and will
4 continue to be injured in its business and property in an amount to be determined at
5 trial.
6
338. Pursuant to 18 U.S.C. 1964(c), Plaintiff is entitled to recover treble
7 damages plus costs and attorneys fees from Defendants.

8
339. Plaintiff is further entitled to, and should be awarded, a permanent
9 injunction that enjoins Defendants, their assignees, and anyone else acting in concert
10 with them from directly or indirectly contributing to, aiding, or abetting the
11 marketing, promotion, or sale of Fake Lunatik Products or any unauthorized or
12 counterfeit products that bear, contain, display, or utilize any of Plaintiffs Marks, any
13 derivation or colorable imitation thereof, or any mark confusingly similar thereto or
14 likely to dilute or detract from Plaintiffs Marks.
WHEREFORE, Plaintiff respectfully requests that this Court:
15
16
1.
Permanently enjoin eBay, PayPal and the Seller Defendants and their
17 respective officers, directors, agents, representatives, successors or assigns, and all

18 persons acting in concert or in participation with any of them from, with respect to
19 any products offered as new:
20
(a)
manufacturing, distributing, delivering, shipping, importing,
21
exporting, advertising, marketing, promoting, selling, or otherwise offering for
22
sale Fake Lunatik Products or any other products confusingly similar to
23
Plaintiffs Authentic Products, or that otherwise bear, contain, display, or
24
utilize any of Plaintiffs Marks, any derivation or colorable imitation thereof, or
25
any mark confusingly similar thereto or likely to dilute or detract from the
26
Plaintiffs Marks;
27
28
106
COMPLAINT

#:501
(b)
processing credit card transactions or otherwise facilitating the
sales of Fake Lunatik Products or any other products confusingly similar to
Plaintiffs Authentic Products, or that otherwise bear, contain, display, or
utilize any of Plaintiffs Marks, any derivation or colorable imitation thereof, or
any mark confusingly similar thereto or likely to dilute or detract from the
Plaintiffs Marks;
(c)
making or employing any other commercial use of Plaintiffs
Marks, any derivation or colorable imitation thereof, or any mark confusingly
similar thereto or likely to dilute or detract from the Plaintiffs Marks;
10
(d)
using any other false designation of origin or false description or
11
representation or any other thing calculated or likely to cause confusion or
12
mistake in the mind of the trade or public or to deceive the trade or public into
13
believing that Defendants products or activities in connection with the offer
14
and/or sale of Fake Lunatik Products are in any way sponsored, licensed or
15
authorized by or affiliated or connected with Plaintiff; and
16
(e)
doing any other acts or things calculated or likely to cause
17
confusion or mistake in the mind of the public or to lead purchasers or
18
consumers or investors into the belief that the products or services promoted,
19
offered, or sponsored by Defendants come from Plaintiff or its licensees, or are
20
somehow licensed, sponsored, endorsed, or authorized by, or otherwise
21
affiliated or connected with Plaintiff; and
22
(f)
moving, returning, or otherwise disposing of, in any manner, any
23
Fake Lunatik Products or any other products confusingly similar to Plaintiffs
24
Products, or that otherwise bear, contain, display, or utilize any of Plaintiffs
25
Marks, any derivation or colorable imitation thereof, or any mark confusingly
26
similar thereto or likely to dilute or detract from the Plaintiffs Marks; and (g)
27
secreting, destroying, altering, removing, or otherwise dealing with the
28
107
COMPLAINT

#:502
unauthorized products or any books or records which contain any information
relating to the importing, manufacturing, producing, distributing, circulating,
selling, marketing, offering for sale, advertising, promoting, renting, or
displaying of all unauthorized products which infringe Plaintiffs Marks; and

(h)
5
6
further diluting and infringing all Plaintiffs Marks and damaging
Plaintiffs goodwill;
(i)
otherwise competing unfairly with Plaintiff in any manner; and
(j)
assisting, aiding, or abetting any other person or business entity in
engaging in or performing any of the activities referred to in the above
10
subparagraphs (a) through (i), or effecting any assignments or transfers,
11
forming new entities or associations, or utilizing any other device for the
12
purpose of circumventing or otherwise avoiding the prohibitions set forth in
13
subparagraphs (a) through (i).
14
2.
Exercise the Courts inherent equitable authority and its statutory
15
equitable authority under 15 U.S.C. 1116 to direct Defendants to account to
16
Plaintiffs for the profits obtained through the unlawful activities alleged herein and
17
unjust enrichment obtained through the unauthorized use of Plaintiffs Marks.
18
3.
Order that the Plaintiffs recover their damages arising out of the acts of
19
deception and infringement described above, and a sum equal to three times such
20
profits or damages (whichever is greater), pursuant to 15 U.S.C. 1117(a) and (b);
21
4.
Award Plaintiffs statutory damages in an amount to be determined
22
representing $2 million per counterfeit mark per type of goods or services sold,
23
offered for sale, or distributed, pursuant to 15 U.S.C. 1117(c);
24
25
26
27
28
5.
Award Plaintiffs treble damages in an amount to be determined plus
costs and attorneys fees from Defendants pursuant to 18 U.S.C. 1964(c).

6.
Direct Defendants to recall and remove from all websites, online
markets, or other channels of commerce any Fake Lunatik Products or any other
108
COMPLAINT

#:503
products confusingly similar to Plaintiffs Authentic Products, or that otherwise bear,
contain, display, or utilize any of Plaintiffs Marks, any derivation or colorable
imitation thereof, or any mark confusingly similar thereto or likely to dilute or
detract from the Plaintiffs Marks, that are in Defendants possession or control, and
all means of making the same;
7.
Direct Defendants to deliver up for destruction all Fake Lunatik Products
or any other products confusingly similar to Plaintiffs Products, or that otherwise
bear, contain, display or utilize any of Plaintiffs Marks, any derivation or colorable
imitation thereof, or any mark confusingly similar thereto or likely to dilute or
10
detract from the Plaintiffs Marks, that are in Defendants possession or control, and
11
all means of making the same, in accordance with 15 U.S.C. 1118;
12
8.
Direct Defendants to deliver up for destruction any and all guarantees,
13
circulars, price lists, labels, signs, prints, packages, wrappers, pouches, receptacles,
14
advertising matter, promotional, and other materials in the possession or control of
15
Defendants bearing any of Plaintiffs Marks, any derivation or colorable imitation
16
thereof, or any mark confusingly similar thereto or likely to dilute or detract from
17
Plaintiffs Marks, in accordance with 15 U.S.C. 1118;
18
9.
Direct Defendants to supply Plaintiff with a complete list of entities from
19
whom they collected and to whom they distributed and/or sold Fake Lunatik
20
Products or any other products confusingly similar to Plaintiffs Products, or that
21
otherwise bear, contain, display or utilize any of Plaintiffs Marks, any derivation or
22
colorable imitation thereof, or any mark confusingly similar thereto or likely to dilute
23
or detract from Plaintiffs Marks, and to provide documentation of the manner
24
through which the Fake Lunatik Products or other products were paid, including any
25
bank accounts to, through or from which funds were wired;
26
27
28
10.
Direct Defendants to file with the Court and serve on counsel for
Plaintiffs within thirty (30) days after entry of any injunction issued by the Court in
109
COMPLAINT

#:504
this action, a sworn written statement pursuant to 15 U.S.C. 1116(a) setting forth in
detail the manner and form in which Defendants have complied with any injunction
which the Court may enter in this action;

11.
Award Plaintiffs their reasonable attorneys fees along with the costs and
disbursements incurred herein as a result of Defendants intentional and willful
infringement, pursuant to 15 U.S.C. 1117;

12.
Award Plaintiffs such other and further relief as the Court deems just and
proper.
DEMAND FOR JURY TRIAL
13.
10
Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiffs
demand a jury trial on all issues so triable.
11
12 Dated: November 20, 2015
Respectfully submitted,
R. REX PARRIS LAW FIRM
13
14
15
By:
16
/s/ R. Rex Parris

R. REX PARRIS, ESQ.
DEBORAH A. KLAR, ESQ.
Attorneys for Plaintiff
WIMO LABS, LLC
17
18
19
20
21
www.thecounterfeitreport.com
22
ii
U.S. Department of Homeland Security, Intellectual Property Rights Seizures

Statistics, Intellectual Property Rights Seizures Statistics, Fiscal Year 2013.
iii
As used herein, the term Unauthorized Sellers refers to every person or entity
who has infringed on Plaintiffs Marks in connection with the promotion,
advertisement, offer for sale, sale and distribution of obvious counterfeit
Lunatik products in violation of the Lanham Act, as amended, and includes the
Seller Defendants identified in paragraphs 10 through 20 of the Complaint.
23
24
25
26
27
28
110
COMPLAINT

#:505
iv
http://www.ebay.com/gds/Top-5-most-durable-smartphone-cases/10000000178519568/g.html
S. Rep. No. 104-177, at 2 (1995) (quoting H.R. Rep. 98-997, at 56 (1984)).39.
vi
Tiffany, Inc. v. eBay, Inc., 600 F.3d 93 (2d Cir. 2009) (Tiffany).
vii
Id.
viii
About eBay, EBAY PARTNER NETWORK,

https://ebaypartnernetwork.com/files/hub/en-US/aboutEbay.html (last visited
Jul. 23, 2015).
ix
See www.stock-analysis-on.net/NASDAQ/Company/eBayInc/Ratios/Profitability#Operating-Profit-Margin
2015 eBay ANN. REP. at 4.
10
xi
Id.
11
xii
Id.
12
xiii
Supra at 5.
13
xiv
Supra at 5-6.
14
xv
Supra at 6-8.
15
xvi
Supra at 4.
16
xvii
Supra at 5-6.
17
xviii
http://pages.ebay.com/help/sell/promoting_ov.html
18
xix
Tiffany at 97.
19
xx
20
xxi
Supra at 5.
21
xxii
Id.
22
xxiii
See http://www.ecommercebytes.com/cab/abn/y15/m08/i28/s02
23
xxiv
24
xxv
Supra at 26.
25
xxvi
Id.
26
xxvii
Id.
27
xxviii
ebay.com/help/policies/replica counterfeit.html.
1
2
3
4
5
6
7
8
28
111
COMPLAINT

#:506
1
xxix
xxx
See http://about.usps.com/news/national-releases/2010/pr10_058.htm
xxxi
See http://www.sellertools.org/epacket/#sthash.VifI2f7M.dpuf
xxxii
See http://about.usps.com/news/national-releases/2010/pr10_058.htm
xxxiii
Id.
xxxiv
Id.
2
3
4
5
6
7
xxxv
8
9
https://www.washingtonpost.com/news/storyline/wp/2014/09/12/the-postalservice-is-losing-millions-a-year-to-help-you-buy-cheap-stuff-from-china/
xxxvi
http://www.ecommercebytes.com/cab/abn/y11/m08/i31/s02 USPS Deal with

eBay Helps Expedite Chinese Imports
xxxvii
https://www.ebayinc.com, Aug 30, 2011 eBay Asian Exporters Drive Global

Trade and Ecommerce Growth.
12
xxxviii
Id.
13
xxxix
http://au.andale.com/edu/entry.aspx?id=Asian-Exporters-Thrive-on-eBay
(Sept. 1, 2011.)
xl
Id.
xli
Id.
xlii
http://pages.ebay.com/help/policies/money-back-guarantee.html
10
11
14
15
16
17
xliii
18
19
xliv
http://www.businesswire.com/news/home/20111121005831/en/eBay-AcquiresRecommendation-Engine-Hunch.com
xlv
Id.
xlvi
PayPal Q4 2014 Fast Facts (PDF). eBay Inc. Retrieved 22 June 2015
xlvii
xlviii
Id.
xlix
Supra at 7-8.
li
20
21
22
23
24
25
26
27
28
http://www.pcworld.com/article/244493/ebay_buys_ecommerce_recommendatio
ns_service_hunch.html
112
COMPLAINT

#:507
lii
liii
liv
lv
See http://www.treasury.gov/resourcecenter/sanctions/CivPen/Documents/20150325_paypal_settlement.pdf
(PayPal Settlement)
lvi
https://coincenter.org/2015/04/what-is-money-transmission-and-why-does-itmatter.
lvii
See, e.g., PayPal Settlement
lviii
https://go.developer.ebay.com/ebay-market-data
lix
https://pages.ebay.com/againstcounterfeits/
lx
https://thecounterfeitreport.com/press_release_details.php?date=2014-1110&id=443
12
lxi
Id.
13
lxii
Id.
14
lxiii
http://pages.ebay.com/help/policies/programs-vero-ov.html
15
lxiv
http://finance.yahoo.com/news/ebay-admits-banned-whistleblower-warning032449045.html
lxv
PAYPAL HOLDINGS, INC. FORM 10-12B (Registration Statement) Filed

02/25/15, Exhibit 99.1
lxvi

02/25/15, Exhibit 99.1
lxvii

02/25/15, Exhibit 99.1
lxviii
http://www.businessinsider.com/ebay-admits-it-banned-a-whistleblower-201411.
5
6
7
8
9
10
11
16
17
18
19
20
21
22
23
24
25
26
27
28
113
COMPLAINT

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Case 8:15-cv-01330-JLS-KES Document 58 Filed 11/20/15 Page 1 of 117 Page ID #:391

1 R. Rex Parris, Esq. (SBN 96567)

2 Kitty K. Szeto, Esq. (SBN 258136)

3 R. REX PARRIS LAW FIRM

43364 10th Street West

Telephone: (661) 949-2595

6 Deborah A. Klar, Esq. (SBN 124750)

7 2934 1/2 Beverly Glen Circle

Bel Air, California 90077

8 Telephone: (310) 858-9500

WIMO LABS, LLC

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

Wimo Labs, LLC

CASE NO.: 8:15-CV-01330

16 eBay, Inc., a Delaware Corporation;

PayPal Holdings, Inc., a Delaware

17 Corporation, Hoonie S. Kang, an

individual; D.I.R. Enterprises, Inc., a

18 California Corporation; and Simon

Case 8:15-cv-01330-JLS-KES Document 58 Filed 11/20/15 Page 2 of 117 Page ID #:392

NATURE OF THE ACTION ...................................................................................... 1

4 THE PARTIES ............................................................................................................ 3

eBay Defendants ..................................................................................... 3

Seller Defendants .................................................................................... 4

10 FACTUAL ALLEGATIONS ...................................................................................... 6

Plaintiffs Business and Marks ............................................................... 6

Counterfeiting and the Internet ............................................................. 11

eBays Business .................................................................................... 12

Intentional Use on ebay.com of Counterfeit Marks That

Unauthorized Use of Plaintiffs Marks By Seller 1................................................... 21

Unauthorized Use of Plaintiffs Marks By Seller 3................................................... 47

20 Unauthorized Use of Plaintiffs Marks By eBay ....................................................... 55

Marks by eBay Sellers and Knowing Contribution by eBay. ................................... 60

23 Unauthorized Use of Plaintiffs Marks In Connection with

Listings for LUNATIK EPIK. ................................................................................ 61

PayPals Processing of Counterfeit Sales Through ebay.com .............. 62

Case 8:15-cv-01330-JLS-KES Document 58 Filed 11/20/15 Page 3 of 117 Page ID #:393

eBay Is an Indispensable Part of the Enterprise that

eBays Unwillingness to Refrain from Trademark Infringement ......... 68

The Financial Services Provided by eBays Partner,

FIRST CAUSE OF ACTION AGAINST eBAY AND THE

13 SECOND CAUSE OF ACTION AGAINST eBAY (Contributory

Trademark Infringement and Counterfeiting Under the Lanham Act) .................... 77

THIRD CAUSE OF ACTION AGAINST eBAY AND THE

17 FOURTH CAUSE OF ACTION AGAINST eBAY (Direct

(Violations of Racketeer Influenced and Corrupt Organizations Act

The RICO Enterprise ................................................................................................. 85

Pattern of Racketeering Activity ............................................................................... 89

24 Pattern of Racketeering Activity: Numerous Instances of Trafficking

in Counterfeit Goods In Violation of 18 U.S.C. 2320(a)(1).................................. 90

Pattern of Racketeering Activity: Multiple Instances of Wire

Case 8:15-cv-01330-JLS-KES Document 58 Filed 11/20/15 Page 4 of 117 Page ID #:394

Summary of the Pattern of Racketeering Activity Alleged

DEMAND FOR JURY TRIAL ............................................................................... 110

Case 8:15-cv-01330-JLS-KES Document 58 Filed 11/20/15 Page 5 of 117 Page ID #:395

NATURE OF THE ACTION

5 wide range of consumers in their efforts to sell obvious counterfeit versions of

This is an action against eBay, Inc. (eBay), PayPal, Inc. (PayPal)

17 (formerly eBays wholly-owned subsidiary now publicly-traded PayPal Holdings,

of obvious counterfeit Lunatik products (sometimes referred to herein as

24 Fake Lunatik Products) that display Plaintiffs trademarks, in violation of the