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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 10, 2022

) 4:02 p.m.

THE PARTNERSHIPS AND

UNINCORPORATED ASSOCIATIONS

IDENTIFIED ON SCHEDULE "A,"

)

)

)

)

Defendants. )

TRANSCRIPT OF TELEPHONIC PROCEEDINGS - Status Hearing

BEFORE THE HONORABLE THOMAS M. DURKIN

APPEARANCES:

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

MR. MARK BERKOWITZ

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

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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APPEARANCES (Continued:)

For the Defendants: MR. YU-HAO YAO

Glacier Law LLP

9660 Flair Drive, Suite 328

El Monte, California 91731

MS. QUEENA N. ZHANG

Glacier Law LLP

506 Second Avenue, Suite 1516

Seattle, Washington 98104

MS. WEI YANG

Glacier Law LLP

41 Madison Avenue, Suite 2529

New York, New York 10010

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(Proceedings heard telephonically.)

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

THE CLERK: All right. This is Case No. 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: Richard Lomuscio, Tarter Krinsky &

Drogin, on behalf of plaintiffs, and I have with me my

colleague Mark Berkowitz as well.

THE COURT: Okay.

MR. MATHEW: This is Anand Mathew on behalf of the

plaintiffs, too.

THE CLERK: And on behalf of defendant, please.

MR. YAO: Good afternoon, Your Honor. This is

Attorney Yu-Hao Yao appearing on behalf of defendants. I have

my colleague --

COURT REPORTER: I'm sorry; you broke up. You need

to repeat that, please.

MR. YAO: Yes. Good afternoon, Your Honor. This is

Attorney Yu-Hao Yao appearing on behalf of the defendants, and

I have my colleagues Queena and Wei on the line as well.

THE COURT: Okay. We received a motion for a

temporary restraining order and preliminary injunction filed

by the plaintiff, and then we received an email from defense

counsel objecting to certain aspects of it. We noted that

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really if you have objections, you ought to put it on the

docket, but the critical thing was there is a briefing

schedule proposed in the motion, relatively prompt briefing

schedule proposed by plaintiffs, defendants object to it and

propose a much more leisurely response date back in -- all the

way up to January, and a reply.

My first question is -- and excuse me one second. I

have a question from a jury on an unrelated case. Off the

record for a moment while I just look at this.

(Off the record.)

THE COURT: Okay. Back on the record.

I saw in the docket entries that Judge Cole had set

discovery schedules, the parties had reported to him that they

had completed discovery, including expert discovery, and that

you were not interested in a settlement conference so he sent

the case back to me, essentially. He had suggested dates for

the filing of a summary judgment motion, but those were

suggestions and were not something I have adopted.

Why are we even doing injunctions at this point when

if discovery's over, I assumed -- and tell me if I'm wrong --

one party or the other is going to file a summary judgment

motion?

First, from plaintiff.

MR. LOMUSCIO: Sure. Your Honor, Richard Lomuscio,

Tarter Krinsky & Drogin, on behalf of plaintiffs.

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The reason we're filing a preliminary injunction

motion now, Your Honor, is based upon the recent Federal

Circuit decision which vacated the existing preliminary

injunctions that were in place in this case --

THE COURT: I'm familiar --

MR. LOMUSCIO: -- which happened about a week -- a

week and a half ago.

THE COURT: I'm very familiar with the orders.

MR. LOMUSCIO: Yes. And the -- and we believe that

those -- that the Federal Circuit, you know, had -- their

analysis provides a roadmap for continuing a new PI in this

case while we complete summary judgment motions. And that is

the reason we have made this motion now.

THE COURT: All right. Well, they certainly did --

and I'll hear from defendants in a minute -- they certainly

did object to the process that I followed in granting the

preliminary injunction motion, and there was a question as to

whether the -- there's proper notice and also whether the

analysis was proper, and the Court found that it wasn't, and I

agree with you, they did at least explain what I should've

done. And that's fine.

And certainly, that's the -- that's the rule we'll

have to follow on this, but it seems as if we're -- if there's

going to be a preliminary injunction hearing, it will be a

hearing. You're going to have witnesses brought in, for both

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sides, and it's in effect going to be a mini trial.

If there is a summary judgment -- intent to file

summary judgment by one side or the other, I'm wondering about

the utility for doing that when that may end up being

dispositive if we have a summary judgment motion.

I don't know, does plaintiffs intend to file a

summary judgment motion?

MR. LOMUSCIO: Not at this time, Your Honor.

THE COURT: Okay. And how about on defense side?

I'll let you comment on what plaintiffs' counsel has just said

on all the subjects he raised.

MR. YAO: Thank you, Your Honor. So, Your Honor,

this is Attorney Yu-Hao Yao appearing on behalf of defendants

and also from Glacier Law LLP.

Actually, so, you know, this is the plaintiffs' third

bite at the preliminary injunction, which, you know, it's

just -- it would be extremely prejudicial to defendants when,

you know, as we talked about, the expert discovery has already

closed, the fact discovery period has already closed,

you know, also defendant is also planning to file a motion for

summary judgment, and it would just -- does not make sense to

have another PI and TRO when the, you know, summary -- motion

for summary judgment would be dispositive and given that,

you know, it's the third attempt, which I know the Federal

Circuit has laid out a roadmap, but also addresses the

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deficiency in the previous preliminary injunction orders so

that it does not make sense for plaintiffs to continue to file

preliminary injunctions when it's already at this stage of the

litigation --

THE COURT: Are you still selling --

(Indiscernible crosstalk.)

THE COURT: I'm sorry to interrupt. Are you still

selling the allegedly infringing products?

MR. YAO: Well, I mean, I haven't -- I have to

confirm that with my client, you know, but I'm pointing to the

preliminary injunction -- according to the Federal Circuit

order, that one has -- the preliminary injunction was vacated,

but we're still confirming it with the -- the process with

Amazon and all that stuff, but I would have to confirm that

with my client.

THE COURT: I understand. And you were not selling

it for quite some time. There was a bond posted and,

obviously, if you're correct that it was an improper

injunction or that plaintiffs can't prevail, you may be

entitled to some type of damages relating to lost sales.

But if you're not selling it -- if you weren't

selling it during the preliminary injunction period, I know

there was some question about whether you were or not, because

I think there was some contempt issues relating to that, but

if you're not selling it now and you intend to file a summary

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judgment, I need to know whether you intend to keep -- intend

to start selling it. If you are, it doesn't matter how many

times the plaintiff has sought summary -- sought preliminary

injunction. I have to follow what the Fed Circuit rule is

and, understandably, you know, follow the roadmap they gave as

to whether or not an injunction could be properly entered.

But it doesn't matter if it's been entered in the past and

been vacated.

But I don't want to be doing this if your client, at

least in the -- for a period of time while summary judgment

briefing is going on doesn't intend to sell their product. If

they do and plaintiffs want to try and enjoin that, then

they're entitled to do it, but it's going to cost each side, I

would think, some amount of resources and certainly amount of

time because what's very clear from the -- from what the

Fed Circuit said is I need to have an in-person hearing with

your experts on each side testifying, and I need to carefully

analyze the evidence and use the -- as they said, the roadmap

from the Fed Circuit in making a decision whether to grant the

preliminary injunction or not.

But it's a waste of everyone's time if your client

doesn't intend to sell the product while a summary judgment

motion gets briefed and decided. So I think if --

understandably, you may not know the answer to that right now,

but I think it's something you need to check with your client.

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If they do want to sell the product, then plaintiffs

are entitled to seek preliminary injunction. If they don't,

then we ought to just proceed with the matter of summary

judgment briefing. And it's almost a self-imposed injunction

at that point by the defendants. Your client may not want to

do that, and that's fine. There's no law that requires them

at this point to -- that prevents them, rather, from selling

their product.

So I really don't want to spend much more time on

this right now, but I'd like you to consider that and find out

what your client's intentions are from the defense side, talk

it over with plaintiffs, and I'd like you all to think about

what is the utility -- what's the most expeditious way to get

a resolution to the case.

You can't settle. You -- Judge Cole asked about that

and the parties said no, and that's fine; there's no need to

settle. But if we're going to have a preliminary injunction

briefing, and I can assure you after that briefing, we're

going to have a hearing, and when I can do that hearing is

a -- I'll give it with all due haste after the briefing is

completed.

And if, in fact, your client isn't going to settle --

sell these hoverboards, it's not enough of a -- well, whatever

the business interests are on that, then we shouldn't be

wasting our time on an injunction hearing because there's no

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irreparable harm if you're not selling anything.

So I'll welcome any comments briefly, but that's what

I have to say on this, and I'll probably have you back in on a

phone call next week sometime to give me the results of what

you've reached any type of resolution or proposed path going

forward given what I've said.

So I'll hear first from plaintiff, then I'll hear

from defendant.

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

Our -- our -- we'll obviously discuss this with

defendants, you know, but our -- our view is that there is,

you know, a -- I guess a voluntary injunction in place and

we're moving to summary judgment. We -- we would be amenable

to that. Our issue really is that -- that no sales of the

products occur while -- while this issue is pending.

THE COURT: Well, I think at this point it's unlikely

you're going to prevent sales until I decide a preliminary

injunction motion. I'm not going to enter -- you know, the

TRO and the preliminary have essentially the same standards in

the Seventh Circuit, and again, I'm not going to decide that

if there's intent by the defendants to sell their product

until we've had a hearing.

And looks like there's -- from that email that I

received, there's going to be some contest as to whether or

not your revised expert report from Mr. Hatch is going to be

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able to be used, and there's a variety of other preliminary

issues we would have to decide.

I can tell you schedulewise, I have a trial starting

in -- two trials in January, one of which will last through

April. So if we don't get this done in December, it's going

to take some time to get done. So keep that in mind on

your -- on any briefing schedule you propose for a preliminary

injunction, which is just a matter of information telling you

what my schedule is.

MR. LOMUSCIO: Thank you, Your Honor.

THE COURT: It doesn't mean I can't hear this on

possibly -- the trials will -- the lengthy trial will go four

days a week, so I can hear you on consecutive Fridays. We may

not finish an injunction hearing on a Friday, but I can hear

you on one Friday and the next Friday and the next Friday. I

wish it weren't that way. I know it's inconvenient for the

parties and the witnesses, but that's the best I can promise

you if we bleed into 2023.

Okay. Let's hear from defendant.

MR. YAO: Thank you, Your Honor. So given to the

first point, so I will have to confirm with my client whether,

you know, they have resumed [inaudible] and they'll provide --

we'll file an update with the Court once I confirm with my

client.

And second, I looked at the plaintiffs' motion for

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preliminary injunction and TRO, they attempt to restrain a

dismissed party that was -- a party that was already dismissed

from this case. It was Jiangyou-US. That was already

dismissed by this Court back in June, and then plaintiffs

decided to bring a motion for PI and TRO again against that

dismissed party which, you know, is prejudicial when the party

has already been dismissed. And --

THE COURT: I expect -- on that one -- let me

interrupt. On that one, I would expect you to consult with

plaintiffs' counsel and resolve that. It sounds like it -- if

it's a party that's been dismissed for a -- and I'd have to go

back and look at the docket and review the reasons for it, but

I would discuss that with plaintiffs' counsel and see if

that's a mistake or whether that was intentional to seek to

enjoin that party, and remind them, because they're new

lawyers on this, they were not involved back at that time, I

think, of what the litigation was relating to that party.

Go ahead. I interrupted you.

MR. YAO: No problem, Your Honor. The briefing

schedule, you know, as I said, back -- defendants filed a

motion for summary judgment or -- as of right now, planning to

file in November and the response time is just -- it'll be too

short given that defendants will have to respond to this

motion for a TRO and PI at the same time it's preparing for a

summary judgment, so I think that, you know, as we indicated

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in the email, that push back the response time until at least

January is -- it will just be the best interest for both

parties.

THE COURT: Well, best interest for your -- from your

party, one party. Not in the --

MR. YAO: Yeah.

THE COURT: -- best interest of plaintiffs. It's in

the best interest of your client, which is who you're

representing.

What I don't want to do, hopefully, is have you

briefing a preliminary injunction and briefing summary

judgment at the same time. That's an awful lot of attorney

hours, expense to your client, and I'm not sure it advances

the case in a productive way. Maybe that's the only way we

can do it, but what I'm going to ask you to do is come back

for a call next week.

Emily, what day can we do it? I'm just looking at

the call sheets.

THE CLERK: We can do Tuesday if you like. Or

Thursday.

THE COURT: Let's do Thursday. I think that's --

what day is that, the 17th?

THE CLERK: Yes.

THE COURT: Let me just look at the schedule that

day. Yeah, let's do Thursday.

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Are the parties available for a call Thursday

morning?

MR. LOMUSCIO: Plaintiffs are, Your Honor.

MR. YAO: What time?

THE COURT: Pardon me? It will be 9 o'clock.

MR. LOMUSCIO: Plaintiffs are, Your Honor.

THE COURT: Okay. And defendants?

MR. YAO: That works for defendants as well,

Your Honor.

THE COURT: Okay. I would ask, though, that you meet

and confer on the issues I've raised. I think you ought to

look for practical ways to resolve the litigation one way or

the other in an as least costly a way as possible for your

clients, and then also -- you know, given all the issues I've

raised.

Hopefully, you can come up with a plan that works,

but if we are compelled to do a preliminary injunction

hearing, it will be live, it will be in my courtroom, and the

briefing will have to be such that it's completed before I

hold the hearing and the time is getting short for a hearing

possibly this year. I have other matters and bench trials

set, and I've given you my schedule starting in January, so

keep that in mind when you decide how we would conduct a

hearing.

Okay. Anything else from plaintiff?

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

THE COURT: And defendant?

MR. YAO: No, nothing else, Your Honor. Thank you.

THE COURT: All right. Thanks for coming on the call

so quickly today. Thank you.

MR. LOMUSCIO: Thank you, Your Honor.

MR. YAO: Thank you, Your Honor.

MR. BERKOWITZ: Thank you, Your Honor.

(Proceedings concluded at 4:19 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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