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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

HANGZHOU CHIC INTELLIGENT

TECHNOLOGY CO. and UNICORN

GLOBAL, INC.,

)

)

)

) Docket No. 20 CV 4806

Plaintiffs, )

) Chicago, Illinois

v. ) November 17, 2022

) 9:12 a.m.

THE PARTNERSHIPS AND

UNINCORPORATED ASSOCIATIONS

IDENTIFIED ON SCHEDULE "A,"

)

)

)

)

Defendants. )

TRANSCRIPT OF TELEPHONIC PROCEEDINGS - Status Hearing

Volume 1A

BEFORE THE HONORABLE THOMAS M. DURKIN

APPEARANCES:

For the Plaintiffs: MR. RICHARD J.L. LOMUSCIO

Tarter Krinsky & Drogin

1350 Broadway

New York, New York 10018

For the Defendants: MR. YU-HAO YAO

Glacier Law LLP

9660 Flair Drive, Suite 328

El Monte, California 91731

ELIA E. CARRIÓN

Official Court Reporter

United States District Court

219 South Dearborn Street, Room 1432,

Chicago, Illinois 60604

(312) 408-7782

Elia_Carrion@ilnd.uscourts.gov

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THE CLERK: The next case is 20 CV 4806,

ABC Corporation v. The Defendants Identified on Schedule "A."

Could I please have the attorney present on behalf of

the plaintiff state their name.

MR. LOMUSCIO: Yes, it's Richard Lomuscio of Tarter

Krinsky & Drogin on behalf of the plaintiffs.

THE CLERK: And on behalf of defendant, please.

MR. YAO: Yeah, this is Attorney Yu-Hao Yao appearing

on behalf of defendants.

THE COURT: Okay. I received a joint status report,

which was filed with each side's positions. We entered an

order dismissing some of the now moot motions, but the main

reason for meeting today was to find out from defendants

whether they intended to sell their products during the

pendency of the summary judgment briefing and, if so -- and if

plaintiffs were going to seek a preliminary injunction,

they're entitled to seek one, but we'd have to have a hearing.

If the parties -- if the defendants did not intend to

sell their product during the pendency of the summary judgment

motion, we would set a briefing schedule for the summary

judgment motion.

So what do you have to report on that from the

defendants?

MR. YAO: Good morning, Your Honor. This is Attorney

Yu-Hao Yao.

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So we -- I did speak with my client and my client is

going to resume selling the products, so -- and also -- we

also conferred with plaintiffs yesterday during a phone call

and we also notified the plaintiffs that we are -- excuse

me -- we are going to continue to sell the products.

THE COURT: Well, by "continue," you mean you started

selling it after the Fed Circuit reversed the injunction,

correct?

MR. YAO: I believe so, yes.

THE COURT: You didn't sell it while the injunction

was in place, I assume.

MR. YAO: No.

THE COURT: No, meaning, you did not sell it,

correct?

MR. YAO: No. Yes, yes, meaning that we did not sell

it while the injunction was in place, yes.

THE COURT: All right. Good. Because even an

injunction that's reversed is still an injunction until it's

reversed, and so I hope your client -- well, you've

represented that your client was not selling the allegedly

infringing products during the pendency of the injunction, the

injunction was vacated, the opinion entering it was reversed

by the Fed Circuit, and at that time there was no injunction

and your client was free to sell the product.

So now the question is, from the plaintiffs' side, do

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you intend to seek a preliminary injunction while we're going

through summary judgment briefing if they are going to --

apparently their intent is to sell the product.

MR. LOMUSCIO: Yes, Your Honor, we would intend to

proceed with our -- our motion for injunction because -- yes.

THE COURT: All right. Well, get your witnesses

ready.

MR. LOMUSCIO: Yeah.

THE COURT: I don't know where they live; I don't

know where all the attorneys are. You can contact my

courtroom deputy by a joint email, after this status call, and

you need to tell her -- well, you can tell me right now: How

long do you expect the injunction hearing to last? What --

how long will your witnesses be to testify -- take to testify?

How many witnesses do you intend to call? And how long do you

expect your arguments to be?

First, on the plaintiff.

MR. LOMUSCIO: Your Honor, we would expect one day,

Your Honor. We have two witnesses who would proceed. We

would think they would be about an hour each. And then,

you know, we'd -- we'd also allot time for argument on the --

attorney argument on the motions.

THE COURT: All right. And on behalf of defendants,

how many witnesses do you expect to call and how long do you

expect arguments to last?

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MR. YAO: So, Your Honor, I think we would expect to

call, I would say about two -- two witnesses as well. And in

terms of the arguments, I would say at least a day as well, so

pretty similar to the plaintiffs as well, but I would have to

confer --

THE COURT: All right. So realistically, we'd need

two days reserved for this hearing.

Now, you had an objection on the defense side to

Mr. Hatch's supplemental report, but I don't think that

necessarily is -- relates -- that may relate to the briefing

on summary judgment, but for a preliminary injunction, I don't

think the discovery schedule that Judge Cole set necessarily

controls.

If someone wants to seek an injunction and they bring

in any evidence they want, I'm not sure they're necessarily

precluded from providing that information in an injunction

hearing.

If you feel differently, you need to file a motion so

that we can try and resolve that before any hearing takes

place, but I'm not altogether confident that a motion like

that would be meritorious, again, on the preliminary

injunction hearing. It may be different on the summary

judgment because, you know, you all represented to Judge Cole

you completed the discovery, and that has consequences when

you say it's over. But for a preliminary injunction hearing

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where in effect new evidence may be being brought in, I'm not

sure that's the case.

So on behalf of the defendants, if you feel

differently, file your motion so we can resolve it before the

hearing. Alternatively, I can hear evidence at the injunction

hearing on a conditional basis. I can hear what Mr. Hatch's

former opinions were, any new opinions he has, and hear

argument on whether I should not consider the new opinions,

but we at least do it expeditiously by hearing it all -- or I

hear it all, not we, but I hear it all, and then decide if

there's a reason not to consider the new opinions. So those

are some thoughts on that.

MR. YAO: Got it.

THE COURT: So --

MR. YAO: Your Honor, I just wanted to double-check

the motion for summary judgment timeline. So I believe -- we

plan to file that motion for summary judgment on the 23rd, and

we also let the plaintiffs know yesterday as well, and I just

wanted to confirm that that is the date -- that last date to

file the summary judgment.

THE COURT: Provide an agreed briefing schedule on

summary judgment. I'm -- you know, I'm still puzzled why

we're proceeding down two tracks, but that's what you've all

chosen to do, and I assume it's done because your clients want

you to or you think it's all -- the best way to proceed.

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But if you're going to proceed on a summary judgment

track, along with a hearing on a preliminary injunction,

provide the agreed briefing schedule to my courtroom deputy in

light of -- I think you need to know when we're going to hear

this preliminary injunction so you're not running up against

the wall where you're preparing for a hearing and also being

required to brief summary judgment.

So what I'd suggest you do is first determine,

through my courtroom deputy, what days we can have this

hearing, and there are a very limited number of days, but

we'll make -- we'll do what we can, and then once you have

that set, you ought to just meet and confer and agree

collaboratively on what a rational briefing schedule would be

in light of the hearing we're going to have.

I think the first step is find out when the hearing

is so you're not preparing a brief the same day you're in the

middle of a hearing in my courtroom. Okay?

MR. YAO: Yes.

THE COURT: I mean --

MR. YAO: Sorry, Your Honor. I just have two more --

two more questions. As we discussed -- as I discussed last

time -- in the hearing last time, one of the parties

Jiangyou-US, was dismissed from this case. It was back on

June 21, 2022, pursuant to Docket No. 561. And -- and I

checked with the -- the plaintiffs' motion for preliminary

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injunction and apparently Jiangyou-US was still in this

case so -- I'm sorry -- it was still, I guess, like

restrained -- going to be restrained by the injunction, so I

just wanted to check whether Jiangyou-US is actually

dismissed, meaning that, you know, the PI -- if the PI was

granted or supplied, that -- that Jiangyou-US won't be

restrained, [inaudible] dismissed.

THE COURT: Are they your client?

MR. YAO: Yes. It was one -- I believe it was one of

our previous clients and it was already dismissed from this

case, but the name still appear in the plaintiffs' renewed --

renewed motion for preliminary injunction.

THE COURT: Well, I had asked you after our last

hearing to check with plaintiffs' counsel to see if that was a

mistake or intentional.

What is it, Mr. Lomuscio?

MR. LOMUSCIO: Yeah, Your Honor, yes, we did speak

with them. And the issue arose because that party was

included in the -- in defense most recent round of expert

reports. But as we informed the plaintiff on -- the defense

yesterday -- excuse me -- we would -- if there's -- if they --

if they are no longer proceeding on behalf of them in this

case, then we would, you know, withdraw them from the -- from

the -- seeking PI against them.

THE COURT: What do you mean if they're no longer

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proceeding on behalf of them?

MR. LOMUSCIO: It -- it was unclear whether or not

they were continuing to seek any sort of relief or otherwise

based upon their inclusion in the expert reports. If -- if

that is not the case, then we're -- then -- then we would not

include them in the PI.

THE COURT: All right. Well -- and is that true from

defense counsel, that you're not -- if their name was in the

report, that doesn't mean you're asserting they're still in

the case, correct?

MR. YAO: Yeah, yes, we're just -- we're just

wondering if that was still -- you know, Jiangyou-US was still

in the case or not.

THE COURT: If they're dismissed, they're dismissed.

MR. YAO: Okay.

THE COURT: If you incorrectly included their name in

an expert report, that doesn't put them back in the case,

so --

(Indiscernible crosstalk.)

THE COURT: -- short of the plaintiff amending the

complaint to add them.

You have no -- do you have any desire to do that on

the plaintiffs' side -- or any intention to do that on the

plaintiffs' side?

MR. LOMUSCIO: No, we do not, Your Honor.

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THE COURT: All right. Well, then I think you're

safe in assuming, from the defense, that they're not in the

case.

Other question.

MR. YAO: Yes, thank you, Your Honor. So -- and it

was also noted in the minute entry that defendants' motion to

clarify, Docket 560, was denied as moot, so we just want to, I

guess, get a clarification to the denied as moot. It is -- it

is unclear whether the G11 Model Hoverboard that's -- that was

referenced in the preliminary injunction was also no longer an

accused product in this case that --

THE COURT: I can't answer that off the top of my

head. If you think you need clarification, file a motion for

clarification. I thought the order we entered was clear. I'm

not going to speak off the cuff on something where you're

making that kind of a question, so ask -- file a motion for

clarification if you feel it needs clarification.

I would really encourage you to meet and confer with

plaintiffs' counsel so that you can likely reach agreement on

the scope of the order we entered to the extent you think it's

ambiguous. But file a motion for clarification if you feel

it's necessary.

MR. YAO: Okay. One more -- one more, I guess,

comment that defendants -- defendants plan to file a motion to

seek the appropriate damages associated with the

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wrongfully-issued preliminary injunction as well.

THE COURT: Fine. I mean, nothing is preventing you

from filing it. Obviously -- I think you noted in the status

report you had lost net profits in the amount of over

$600,000, and prejudgment interest of close to 40,000. You

obviously have to support any request by way of affidavit and,

you know, the appropriate -- I'm assuming there's appropriate

financial records to support such a request and that's,

you know, routine. That's a motion you need to file, and if

you can reach an agreed briefing schedule on that, you should

suggest that when you contact my courtroom deputy that -- when

you're going to file such a motion, what the agreed briefing

schedule is on it, and if there's no agreement, what the

disagreement is, and I'll rule on an appropriate schedule

based on what you say each side needs.

MR. YAO: Got it.

THE COURT: Okay. Anything else from defendant?

MR. YAO: No, that's -- that's everything,

Your Honor. Thank you.

THE COURT: Anything else from plaintiff?

MR. LOMUSCIO: Nothing else, Your Honor. Thank you.

THE COURT: All right. Contact my courtroom deputy,

see if we -- I'm not sure we'll get two consecutive days, but

we'll give you two days at some point before I start the very

lengthy trial I've got in January.

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I can't help but note when I looked at Document 602,

the joint status report, it's really unnecessary to use

adjectives in a simple status report to characterize -- this

is on page 3, defendants' position -- to characterize tactics

used by plaintiffs as vile tactics, evil-hearted tactics, and

then the Court's wrongful and unscrupulous analysis.

I've been called many things, but not unscrupulous.

So I take no personal offense; I'm just noting that it's

unnecessary. It really is, to put these kind of adjectives in

a simple court status report. Again, I take no offense and

I'm -- I can't speak for plaintiffs, but it really is not a

good way to proceed if we're going to try and get this

resolved in an expeditious manner going forward.

So please, you know, work within the spirit of

professionalism and the spirit of cooperation to try and get

this resolved. We're all -- you both have clients; that's

your role is to represent your clients. My job is to fairly

and within the best of my ability decide this based on the

facts. So let's keep it at a professional level.

All right. I'll look forward to your corresponding

with my courtroom deputy so we can get a preliminary

injunction hearing set.

Thank you, both.

MR. YAO: Thank you, Your Honor.

MR. LOMUSCIO: Thank you.

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(Proceedings concluded at 9:27 a.m.)

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

HANGZHOU CHIC INTELLIGENT

TECHNOLOGY CO. and UNICORN

GLOBAL, INC.,

)

)

)

) Docket No. 20 CV 4806

Plaintiffs, )

) Chicago, Illinois

v. ) November 17, 2022

) 3:31 p.m.

THE PARTNERSHIPS AND

UNINCORPORATED ASSOCIATIONS

IDENTIFIED ON SCHEDULE "A,"

)

)

)

)

Defendants. )

TRANSCRIPT OF TELEPHONIC PROCEEDINGS - Status Hearing

Volume 1B

BEFORE THE HONORABLE THOMAS M. DURKIN

APPEARANCES:

For the Plaintiffs: MR. RICHARD J.L. LOMUSCIO

Tarter Krinsky & Drogin

1350 Broadway

New York, New York 10018

MR. ANAND C. MATHEW

Palmersheim & Mathew, LLP

401 North Franklin Street, Suite 4S

Chicago, Illinois 60654

For the Defendants: MR. YU-HAO YAO

Glacier Law LLP

9660 Flair Drive, Suite 328

El Monte, California 91731

ELIA E. CARRIÓN

Official Court Reporter

United States District Court

219 South Dearborn Street, Room 1432,

Chicago, Illinois 60604

(312) 408-7782

Elia_Carrion@ilnd.uscourts.gov

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(Proceedings heard telephonically.)

THE COURT: All right. Emily, please call the case.

THE CLERK: This is Case No. 20 CV 4806,

ABC Corporation v. The Defendants Identified on Schedule "A."

Could I please have the attorneys present on behalf

of the plaintiff state their name.

MR. LOMUSCIO: Richard Lomuscio of Tarter Krinsky &

Drogin on behalf of the plaintiffs.

THE CLERK: And --

MR. MATHEW: Anand Mathew for plaintiffs.

THE CLERK: All right. And on behalf of defendants.

MR. YAO: This is Attorney Yu-Hao Yao appearing on

behalf of defendants.

THE COURT: Okay. We had a hearing this morning, and

I had asked the parties to contact my courtroom deputy to

arrive at a date, or dates, for the preliminary injunction

hearing, recognizing that my schedule is very limited because

of other criminal matters often involving incarcerated

defendants and trials that have been set for some time.

We had suggested dates of December 2nd and

December 9th, which apparently the plaintiffs could conduct

their hearing and were available for, but defendants said they

were not available. We then gave dates in early January,

which defendants said they were not available.

This is not really optional. The plaintiffs -- if

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you intend to sell your product, the defendants, they're

entitled to seek an injunction to prevent it, and we're going

to go with the first available dates.

It's in the nature of an emergency motion so our

hearings will be December 2nd and December 9th. You're going

to have to reschedule things, get your witnesses together if

you need to, reschedule things from your own professional and

personal calendars, but that is their right to seek an

injunction if your desire is to sell your products.

Now, I have a couple other comments, and then I'll

let you all speak.

From the plaintiffs' side, if they sell their

products and it turns out they violate your patent -- they're

infringing your patent, you get damages and an injunction. I

don't know how long it'll take to -- for that to accomplish,

but if you're successful, you'll get damages for all this.

Why you need to enjoin it right now, I'm not sure the

hoverboard sales are going to create a significant crisis for

either company if those sales take place, and you get to

measure the damages based on the amount of sales they conduct.

From the defendants' side, are you going to sell so

many of these things before summary judgment is decided that

it's worth it to not forgo selling until you get a ruling on

summary judgment if you're successful?

You've already made a calculation of what your lost

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profits will be based on what you -- what was an injunction

that was granted improvidently by me, so you've -- that was

requested by the plaintiffs -- but you've made a calculation

as to what your lost profits were, if, in fact, you could, if

the parties were speaking to each other, and I hope you are,

one way to protect the defendants and the plaintiff is if

defendants, in effect, agreed to not sell the product as if

there were an injunction in place, but they did so with the

agreement of the plaintiff that if it turns out that there

is no infringement, the lost profits that would take place now

and during the period of time before the summary judgment

motion is decided or before we have trial, would be something

that they would be compensated for.

That seems like a logical way to protect both

parties' positions without speeding through a preliminary

injunction hearing. I'll do it. That's my job, and I'll be

happy to do it, but we're going to do it December 2nd and

December 9th. We're not going to keep delaying this, because

it's in the nature of an emergency motion.

But I think there are ways for both of you to

protect -- you know, plaintiffs to get a -- you know, you get

damages if it turns out their sales are improper; easy way to

measure that. And from the defendants, if you forgo selling

your products, there ought to be a way to reach an agreement

with the plaintiff that if that forbearance was unnecessary

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because your product does not infringe, then the lost profits

for this short period of time between, really, the entire

period from when you were originally enjoined until there's a

resolution would be something that you can seek damages on.

So I'll hear first from plaintiffs as to any thoughts

on what I've just said.

MR. LOMUSCIO: Yeah, Your Honor. Thank you,

Your Honor.

First off, you know, as to the -- the need for the

injunction, we are entering into the -- the holiday selling

season, which is typically the height of the period for sales

of these products. And sales of these, if there are

infringing products out there, it's causing irreparable harm

to our clients with those sales.

Second, the injunction that has -- was in place we

believe was only vacated for technical reasons, which we have

further supported through our preliminary -- you know, our

current motion, and, you know, we think the -- the issue here

is the injunction that was in place, there should be -- should

have been an injunction in place and the injunction should

continue.

We are -- we are always, though -- you know, and we

will speak with the defendants if there's some other way to do

it, but we did make proposals along those lines prior to

today, they were rejected, and, you know, we do need to -- our

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clients need to protect their rights and that's why they will

be proceeding with the -- the preliminary injunction motion.

THE COURT: Okay. And from defendants.

MR. YAO: Thank you, Your Honor.

So given -- I'll just go back to the dates. I know

you said that December 2nd, and I -- one of the reasons that

defendant is proposing -- sorry -- a later date is to

generate -- one of them is to, you know, we have to contact

our experts. Given the upcoming Thanksgiving holiday and

upcoming Christmas season, as we all know, that people will be

traveling and it's just not -- it was just not reasonable to

have the experts, you know, to be ready at December 9th --

I'm sorry -- December 2nd for the preliminary injunction

hearing.

And second, the preliminary injunction -- delaying --

not delaying, but postponing the preliminary injunction

hearing to January, which is a month after -- which is only a

month after will not cause any prejudice or undue burden to

the plaintiffs.

Second, you know, defendants have already been

enjoined these past few years leading to, you know, as we've

already calculated -- excuse me -- defendants have already

calculated the amount of loss of profits, as well as business

reputation. And, simply, one of the defendants in this case

were restrained by the plaintiffs for selling hovershoes

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which, you know, have no connection whatsoever to the

allegedly infringed products in this case and --

THE COURT: Well, that's what we're going to -- that

we'll decide at the hearing. That's the whole point of the

hearing. If you want to sell your product, which is your

right, and you want to sell them over the Christmas season,

which is your right, then they have alleged you violate

their patents, then they're entitled to a preliminary

injunction hearing because they're at least alleging there

will be irreparable harm because your client wants to sell

what they believe to be an infringing product over a busy

holiday season.

So there's no two ways about it. If you want to sell

your product, that is your right. But they filed a lawsuit;

they have a right to proceed under the Federal Rules of Civil

Procedure to seek an injunction to prevent it. I'm -- I'm not

frustrated by any of this, but I see a lot of business ways to

resolve this, but the parties aren't going into that, and

that's -- that's your business.

And as to -- I know I interrupted you; you have

another point, but I just want to address that point. And as

to the point of, you know, it's the busy season, it's tough to

get witnesses in, and Thanksgiving and Christmas, I -- I,

you know, that's -- that's the way it goes. There's no

getting around it.

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They're alleging irreparable harm. They do make a

point, frankly, that given the holiday season, we can't keep

delaying. And it doesn't make sense logically that many of

these boards, both your clients and their clients, are sold

over the holiday season, so, you know, I don't even know if

you contacted your experts yet, but you can get them in.

You'll have to get them in, or we'll hear them by

video, if necessary. I have no problem with hearing

witnesses' testimony if they're remote, in a courtroom. It'll

be in the courtroom. The attorneys need to be there, but I

have no problem at all accommodating a request to have someone

testify live but -- you know, by video, which may help with

the travel situation or any other scheduling situations.

And that's true for both sides. I prefer live

testimony in the courtroom, but given the emergency nature of

this and the fact that the travel -- busy holiday travel

season, I'm happy to accommodate a reasonable request, as long

as both sides agree to allow a witness to testify remotely by

video. Not by audio. I want to see the person's face, but by

video, if necessary.

Okay. Those were the first two points. I

interrupted your third one, and I apologize. Go ahead.

MR. YAO: No problem, Your Honor.

And I guess, you know, the third point is given

that -- I've spoken about the holidays travel and you

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mentioned that. And then I would say the last -- last few

points are there's no -- as, you know, why defendants are

alleging that there are no merits to this preliminary

injunction, but rather is going to interfere with defendants'

business operation and driving defendants out of the

competition, the business, and the market.

And lastly, you know, the Federal Circuit has already

ruled on that plaintiff has no likelihood of success on the

merits. And so given that, you know, just simply delaying the

preliminary injunction hearing to January will not prejudice

any parties -- or any parties, and it would be the best -- it

would also conserve the Court's time and resources as well.

THE COURT: Well, the Court's time and resources is

no one's concern but mine, and I'm making -- and I'm moving

other cases on December 2nd and December 9th to accommodate

the emergency motion. Your client wants to sell his

product -- its products, that's fine.

The Fed Circuit did not find that there was no

likelihood of success on the merits. That's not how I read

the opinion. That's inaccurate. It simply said that I could

not have assumed likelihood of success on the merits given the

affidavit of -- the competing affidavits, I couldn't just

assume likelihood of success on the merits. I needed to

conduct a hearing, at the very least. And that's what I'm

going to allow the parties to have.

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So, Emily, what time are we starting on December 2nd?

THE CLERK: I'm pulling up the calendar here.

We can start at 10 o'clock if we reschedule the noon

change of plea.

THE COURT: Okay. We'll do that before -- before the

hearing. So 10 o'clock, December 2nd. If there's any papers

anyone wants to file beyond what's already on the record, you

should do so. I would like notice of who the -- each side

should tell the other side who they intend to call as

witnesses, and I'd like some notice of that, and you can give

that notice to my courtroom deputy simply by email.

Okay. And then we'll also -- if we're not done on

the 2nd, we'll continue it to December 9th. I think we have

the final pretrial conference -- oh, we have a phone call on

Shah at 4:00.

And can we rearrange things where we can start at

10 o'clock again on the 9th if we're not done on the 2nd?

THE CLERK: Yes, I think we could, yeah.

THE COURT: Okay. All right. Well, that's the

schedule, and I look forward to seeing you all in Chicago on

December 2nd at 10 o'clock.

If you have any questions, communicate -- not legal

arguments, but scheduling questions -- you can email my

courtroom deputy and she'll make sure she gets me the message.

Anything else from plaintiff?

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MR. LOMUSCIO: Nothing else, Your Honor. Thank you.

THE COURT: Anything else from defendant?

MR. YAO: No, that's it. Thank you, Your Honor.

THE COURT: Okay. Thank you all. Bye-bye.

(Proceedings concluded at 3:43 p.m.)

CERTIFICATE

I certify that the foregoing is a correct transcript from

the record of proceedings in the above-entitled matter.

/s/ Elia E. Carrión 21st day of November, 2022

______

Elia E. Carrión Date

Official Court Reporter

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