IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

HANGZHOU CHIC INTELLIGENT 

TECHNOLOGY CO. and UNICORN 

GLOBAL, INC., 

Plaintiffs, 

v. 

THE PARTNERSHIPS AND 

UNINCORPORATED ASSOCIATIONS 

IDENTIFIED ON SCHEDULE A, 

Defendants. 

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Case No. 20-cv-4806 

Judge Thomas M. Durkin 

Magistrate Judge Jeffrey Cole 

MEMORANDUM IN SUPPORT OF PLAINTIFFS’ MOTION FOR AN ORDER TO 

SHOW CAUSE WHY DEFENDANTS SHOULD NOT BE HELD IN CONTEMPT OF 

THE PRELIMINARY INJUNCTION ORDER 

Plaintiffs’ Motion for Preliminary Injunction recounted the Defendants’ patent 

infringement as virtual Whack-A-Mole. Under this scheme the Defendants “are abusing the 

anonymity afforded to the internet marketplace to sell infringing products under fictitious stores 

with fictitious monikers, and as soon as one store is shut down (or whacked), a new store with a 

new name emerges.” See Dkt. 106. Even though the Preliminary Injunction (“PI”) should have 

stopped these activities, the Defendants here have brazenly flouted the restrictions of the PI and 

have continued to engage in its Whack-A-Mole scheme by selling enjoined products directly or 

through other storefronts, while moving monetary assets in the process. 

The PI generally restrains all Defendants, their affiliates, confederates, and those acting 

in active concert or participation with them from selling hoverboards that the Court determined 

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were infringing on Plaintiffs’ design patents. See Dkt. 147, ¶ 1(a). The PI is explicit that 

defendants may not “effect[] assignments or transfers” or “form[] new entities or associations” to 

circumvent these prohibitions. Id., ¶ 1(c). Additionally, the Defendants and those acting in 

concert and participation with them are restrained “from transferring or disposing of money or 

other Defendants’ assets until further ordered by this court.” Id., ¶ 3. Yet at least the Defendants 

associated with the Gyroor enterprise—namely, Gyroor-US, Gyroor, Urbanmax, Fengchi-US, 

hgsm Storefront, Gaodeshang-US, Jiangyou-US, and Gyroshoes (“Gyroor Defendants”)—are 

actively participating in activities expressly restrained under the PI. 

Admittedly, the precise nature of the relationships between the Gyroor Defendants 

remains a mystery. Whether the Gyroor Defendants are separately incorporated, legally distinct 

entities, or instead simply d/b/a’s for different storefronts operating on Amazon are open 

questions. Regardless, as Plaintiffs previously explained, any corporate distinctions seem to be a 

fiction. See Dkt. 316, pp. 7–9. The labyrinth of interactions between the Gyroor Defendants—

and potentially other entities operating in concert with them, but not formally before this Court—

makes it impossible for Plaintiffs to determine all of the entities/storefronts that are violating the 

PI, especially given Defendants’ limited participation in discovery. In fact, Plaintiffs have 

suspected since March that some of the Gyroor Defendants were violating the PI, but Plaintiffs 

only recently obtained uncontroverted evidence from third-party Amazon of non-compliance to 

warrant this Motion. That said, Plaintiffs fear that it may take months of discovery to obtain 

sufficient evidence to reveal the full scope of non-compliance, and during that time, the noncompliance and irreparable harm to Plaintiffs will continue—unless this Court takes action now. 

Accordingly, this Court should issue an order to show cause why the Gyroor Defendants, its 

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affiliates, and those parties acting in concert and participation with the Gyroor Defendants should 

not be held in contempt for violating the PI. 

I. PROCEDURAL BACKGROUND OF THE PRELIMINARY INJUNCTION 

Plaintiffs manufacture, license, and sell hoverboard products in the United States and 

throughout the world, under U.S. Design Patent Nos. D737,723, D738,256, D785,112, and 

D784,195 (“Patents-in-Suit”). Third Am. Compl. ¶¶ 6, 14. Defendants are Chinese-based entities who operate e-commerce stores and sell unauthorized products that infringe the Patents-inSuit. Id. ¶ 9. To combat this infringement Plaintiffs filed this action in August 2020 and moved 

for an ex parte temporary restraining order. Dkt. No. 1, 17. The Court entered an injunction in 

September (“TRO”) and then later extended it in October. Dkt. No. 42, 50. In November the 

Court entered the preliminary injunction (“PI”) and later modified it in December. Dkt. 113, 

147. One of the defendants named at that time was Gyroor-US. See Dkt. 101, Schedule A, ln. 2. 

In January 2021, Plaintiffs discovered additional storefronts (associated with Gyroor-US) 

that were facilitating Gyroor-US’s infringement by engaging in the same conduct that the PI 

barred Gyroor-US from engaging. See Dkt. 317, ¶ 4. Plaintiffs thus requested that Amazon 

restrain their assets. Dkt. 316, ¶ 5. Subsequent conduct by those storefronts provided definitive 

proof that they were, at minimum, acting in active concert or participation with Gyroor-US or 

other affiliated entities. See id., ¶¶ 6–11; Dkt. 316, pp. 7–9. In May Plaintiffs amended the list 

of defendants in this case to formally incorporate these apparent affiliates and alter egos. See

Dkt. 227-1, ¶ 3; 253. Plaintiffs voluntarily dismissed one Gyroor-related entity—Runchenyun—

on May 25, the same day counsel for Runchenyun appeared in this Court. Dkt. 264, 267. 

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II. FACTS RELEVANT TO VIOLATIONS OF THE PRELIMINARY INJUNCTION 

A. Amazon Storefronts and Products Sold via ASINs 

The first step a seller takes when selling products on Amazon is associating the product 

with an Amazon Standard Identification Number (“ASIN”). Declaration of Jing Cui (“Cui 

Decl.”), ¶ 7. There are two ways to do so: (a) create a new, unique ASIN, or (b) use an existing 

ASIN created by someone else. Id., ¶ 8. Typically, the brand owner or licensee creates a new 

ASIN, as Amazon limits the ability of non-brand users to create ASINs. Id., ¶¶ 8–9. If a store is 

selling the same product, but is not affiliated with or working in concert with the brand owner 

associated with the ASIN, Amazon would not approve the creation of a new ASIN. Id., ¶ 9. The 

merchant who created the ASIN may choose to disable or remove the webpage or description of 

the product associated with the ASIN from its store. Id., ¶ 10. Tag-along merchants using the 

brand owner’s ASIN could continue to sell if the brand owner merely removes that specific 

product from its store. Id. While only Amazon is able to delete the ASIN from its database once 

it is created, the brand owner could prevent unauthorized tag-along merchants from selling under 

its ASIN by disabling or removing the product webpage or the “listing.” Id. 

Amazon merchants often purchase advertisements for their products. Id., ¶ 16. Such 

advertisements can be paid for using the merchant’s Amazon seller account. Id. Sellers can also 

use their seller account to pay for order fees related to inventory fulfilled by Amazon. Id., ¶ 15. 

If an Amazon warehouse stocks a seller’s product, the merchant may elect to have the product 

shipped from the warehouse, in which case the product listing and shipping label will state that it 

was “Fulfilled by Amazon.” Id., ¶ 11. Alternatively, the merchant store itself may directly ship 

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the product. Id. If there is any other entity whose name is indicated on the shipping label, one 

can reasonably assume that entity is affiliated with the storefront selling the product. Id., ¶ 13. 

B. “Pop-Up” Gyroor Stores Selling Enjoined Products During PI 

A recurring challenge for enforcement of intellectual property rights on marketplaces like 

Amazon is the relatively short-lived storefronts. Declaration of Arthur Yuan (“Yuan Decl.”), ¶ 

40. Such storefronts pop up to briefly sell infringing products, then go underground (i.e., close) 

after a short period of time only to be later replaced by other storefronts. Id. Such reoccurring 

tactics allow storefronts to evade enforcement actions by simply staying active just short enough 

to avoid any asset restraints. Id. Plaintiffs have identified over a dozen storefronts that follow 

this pattern and have offered to sell products enjoined under the PI. Id., at ¶¶ 39–40. 

Publicly-available ASIN information corroborates that these pop-up storefronts are 

related to one another and to the Gyroor Defendants. The pop-up storefronts sell products using 

ASINs used by other pop-up storefronts and by the Gyroor Defendants. See Yuan Decl., ¶¶ 16–

38. These storefronts also link back to the “Gyroor Store” on Amazon. Id., ¶ 42; Declaration of 

Neil Nandi (“Nandi Decl.”), ¶¶ 4, 13. 

Further corroboration of these pop-ups’ connection to the Gyroor Defendants is the fact 

that the Gyroor-US storefront (a storefront explicitly named as a defendant here) appears to be 

allowing these pop-up stores to undercut its own prices. Plaintiffs identified an example of a 

pop-up store selling Gyroor-branded products at lower prices than Gyroor-US sold them on 

Gyroor’s own ASIN. See Yuan Decl., ¶ 41. Because the products use the same ASIN, a 

customer would see both prices and would likely purchase the product offered at the cheaper 

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price by the pop-up store. Id. This price difference is not a coincidence. It’s an obvious tactic to 

continue selling enjoined products. 

C. Direct Infringement By Named Storefronts Violating the PI 

In January Plaintiffs purchased an infringing, enjoined product from 

www.gyroorboard.com and received a confirmation email titled “Thank you for your purchase” 

from the sender “GYROOR.” See Yuan Decl., ¶ 14. And on July 1 Gyroor US was still offering 

to sell at least two units of an enjoined product on Amazon.com in violation of the PI order. Id., 

¶ 15. Relatedly, on June 21 Plaintiffs purchased a Gyroor-branded enjoined product from the 

“baiboyuan-us” storefront on Amazon. Id., ¶ 21. The shipping label on the package did not 

identify baiboyuan-us. Id. Instead, it revealed that the item came from Runchenyun, a former 

defendant who was voluntarily dismissed here but remains a defendant in the case pending 

before Judge Seeger. In other words, Gyroor is selling enjoined products by using a baiboyuanus storefront and fulling those orders through Runchenyun. 

D. Unauthorized Transfer of Assets 

Amazon records demonstrate that, despite having their assets restrained by Amazon, the 

Gyroor Defendants have transferred nearly $180,000 in assets since January 6, 2021. See Yuan 

Decl., ¶ 12. Specifically, during that time Gyroor-US has transferred $144,319.51; Gyroor has 

transferred $14,811.23; Urbanmax has transferred $2,004.41; Fengchi-US has transferred 

$8,843.11; Jiangyou-US has transferred $4,712.17; and Gyroshoes has transferred $4,687.65. 

Id., ¶ 11. Simply put, each of these Gyroor Defendants have been moving money during the PI. 

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E. Gyroor’s Counsel’s Explanations For These Ongoing PI Violations

On April 13 Plaintiffs alerted Gyroor-US’s counsel to several activities that demonstrated 

that Gyroor-US or its related entities were acting in violation of the PI. See Nandi Decl., ¶ 4. 

Specifically: (1) the “Gyroor Store” was active and selling on Amazon; (2) the Gyroor Store was 

sponsoring advertisements for enjoined hoverboards; (3) an Amazon storefront called 

“yaohuisheng-us” was “just launched,” seemingly to sell enjoined Gyroor hoverboards; and (4) 

the direct-to-consumer website “gyroorboard.com” was still selling enjoined hoverboards. Two 

days later Plaintiffs emailed Gyroor-US’s counsel to observe that yaohuisheng-us had closed, but 

another “just launched” Amazon storefront solely selling enjoined hoverboards had replaced it. 

Id.

On April 26 Gyroor-US’s counsel confirmed that the direct-to-consumer website had 

ceased selling the enjoined products, surprisingly denied Gyroor-US’s connection to the “Gyroor 

Store,” and represented the following regarding the most recently infringing pop-up storefront: 

“Defendant understands this storefront either never did or no longer sells or offers to sell any 

accused products.” Id., ¶ 8. The next day, Glacier Law replaced Gyroor-US’s outside counsel. 

See Dkt. 209. 

On April 30 Plaintiffs’ counsel emailed Gyroor-US’s new counsel Glacier Law to raise 

again continued instances of non-compliance. See Nandi Decl., ¶ 12. Specifically, Plaintiffs 

identified yet another temporary, pop-up infringer. Id. Plaintiffs also identified that Gyroor’s 

direct-to-consumer websites still offered enjoined hoverboards for sale by allowing consumers to 

sign-up for product notifications, even though the hoverboards were shown as unavailable. Id. 

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On May 3 Plaintiffs’ counsel emailed Gyroor-US’s counsel to identify (again) another 

pop-up Amazon storefront that existed solely to sell infringing Gyroor-branded products. Id., ¶ 

13. That same day, Gyroor-US’s counsel responded by vaguely stating: 

Just to be clear the account Gyroor-US (a.k.a. Dongguan Saibotan Nengyuan Keji 

Co. Ltd.) has complied with the Court's PI order. We need to verify the 

information you provided. We will get back to you once we have more 

information regarding your allegation. 

 

Id., ¶ 14. 

Given these continued violations of the PI over several months and the alreadyaccomplished depletion and transfer of substantial assets, Plaintiffs alerted opposing counsel 

before filing this motion but a meet and confer would have been futile. See id., ¶ 15. Gyroor’s 

counsel requested additional details so that they could “investigate the situation further.” Id., ¶ 

16. Plaintiffs observed the similarities between this statement and the May 3 statement, which 

did nothing but delay enforcement of the preliminary injunction. 

III. ARGUMENT 

Civil contempt proceedings arise under 18 U.S.C. § 401(3). This Court is empowered “to 

punish by fine or imprisonment, or both, at its discretion, such contempt of its authority, and 

none other, as ... disobedience or resistance to its lawful writ, process, order, rule, decree, or 

command.” 18 U.S.C. § 401(3). This Court also possesses the “inherent power to enforce 

compliance with their lawful orders through civil contempt.” Teledyne Techs., Inc. v. Shekar, 

Case No. 15-cv-1392, 2015 U.S. Dist. LEXIS 78224, *11 (N.D. Ill. June 17, 2015), citing 

Shillitani v. United States, 384 U.S. 364, 370 (1966). In a civil contempt proceeding, the 

complaining party must provide evidence that the opposing party violated a court order by 

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explaining in specific detail an unequivocal command that the party violated. United States v. 

Dowell, 257 F.3d 694, 699 (7th Cir. 2001). The violation need not be “willful.” Int’l Star 

Registry of Ill., LTD. v. SLJ Group, Inc., 325 F. Supp. 2d 879, 883 (N.D. Ill. 2004). Rather, this 

Court may find a party in contempt if it has not been “reasonably diligent and energetic in 

attempting to accomplish what was ordered.” Id. at 883, quoting Am. Fletcher Mortgage Co. v. 

Bass, 688 F.2d 513, 517 (7th Cir. 1982). 

A. The Gyroor Defendants Have Formed New Entities to Sell Enjoined

Products in Violation of the PI 

The PI prohibits defendants from “forming new entities or associations or utilizing any 

other device for the purposes of avoiding the prohibitions” against infringement. See Dkt. 147, ¶ 

1(c). Despite that express prohibition under Section 1(c), on seemingly a weekly basis, a new 

storefront pops up on Amazon that sells Gyroor-branded enjoined hoverboards, only to shut 

down after a week to be replaced by another pop up storefront. See Yuan Decl., ¶ 39; Nandi 

Decl. ¶¶ 4, 10, 12–14. These storefronts all tie back to the “Gyroor Store.” Yuan Decl., ¶ 42; 

Nandi Decl. ¶¶ 4, 13. One example for how these storefront tie back is their use of the same 

ASINs that the Gyroor Defendants use. See Yuan Decl., ¶¶ 21, 22, 28, 29, 31, 34. Even the 

pricing strategy reflects careful coordination between the Gyroor Defendants and these pop-up 

stores, as the stores sell the same products at lower prices. Id., ¶ 41. This pricing tactic directs 

customers to purchase from pop-up stores that do not have in place any of the PI’s asset 

restraints. Id. Of course, no brand owner would reasonably allow a tag-along merchant to 

voluntarily undercut it, unless the brand owner had authorized the tag-along merchant’s sales or 

the tag-along merchant was really just another storefront directly operated by the brand owner. 

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Prior interactions between counsel regarding these storefronts have resulted in GyroorUS making representations that are so narrow and unhelpful as to effectively admit that some of 

the Gyroor Defendants are directing these pop-ups. See Nandi Decl., ¶¶ 8, 10. Apparently, 

Plaintiffs just have not guessed the right mole leader yet in the Whack-A-Mole scheme. For 

example, on April 26 Gyroor-US offered the following opaque statement regarding one of these 

pop-up stores: “Defendant understands this storefront either never did or no longer sells or offers 

to sell any accused products.” Id., ¶ 8. And on May 3 Gyroor-US’s counsel wrote: “Just to be 

clear the account Gyroor-US (a.k.a. Dongguan Saibotan Nengyuan Keji Co. Ltd.) has complied 

with the Court’s PI order.” Id., ¶ 10. Notably, in neither instance did Gyroor-US’s counsel deny 

a connection to these storefronts. Unfortunately these narrow statements, attempting to deflect 

scrutiny while avoiding the true substantive facts, have become standard practice for the Gyroor 

Defendants. See Dkt. 316, p. 8. 

Taken together, the only reasonable inference is that one or some of the Gyroor 

Defendants are closely coordinating with these pop-up stores to undermine the PI and this Court. 

B. The Gyroor Defendants Have Sold and Offered to Sell Enjoined Products 

in Violation of the PI 

In addition to the surreptitious infringement through the army of pop-up storefronts, the 

Gyroor Defendants have also sold, offered to sell, and shipped enjoined products directly, 

without intermediaries. Yuan Decl., ¶ 14. Specifically, Plaintiffs purchased an enjoined product 

from gyroorboard.com on January 4. Id. That website continued to sell enjoined products in at 

least April and July. Id., ¶¶ 47–50. On July 1 Gyroor US was offering to sell at least two units 

of an enjoined product on Amazon in violation of the PI order. Id., ¶ 15. 

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An unusual example that crosses both the “intermediary” and directly infringing 

categories involves Runchenyun. Runchenyun was previously a defendant in this case, though 

Plaintiffs dismissed them because they were also a defendant in Case No. 20-cv-5905, pending 

before Judge Seeger. Although the PI in that case has since been vacated, Runchenyun is still 

bound to the PI here through the affiliate/acting in concert aspect of the PI. Cf. Lake Shore Asset 

Mgmt. v. CFTC, 511 F.3d 762, 767 (7th Cir. 2007) (“Of course, other members of the Lake 

Shore Group of Companies act at their peril if they disregard the commands of the injunction, 

for, if the district court ultimately determines that they are in concert with Lake Shore, then they 

will be in contempt of court.”). Plaintiffs recently purchased an enjoined, Gyroor-branded 

product from one of the pop-up stores, and the shipping label showed that Runchenyun shipped 

it. Yuan Decl., ¶ 21. 

C. The Gyroor Defendants Have Transferred Assets in Violation of the PI 

The PI order provides: “Defendants and any persons in active concert or participation 

with them who have actual notice of this Order shall be restrained and enjoined from transferring 

or disposing of money or other Defendants’ assets until further ordered by this court.” Dkt. 147, 

¶ 3. The PI also bars defendants from “effecting assignments or transfers” to avoid the PI’s 

prohibition on infringement. Id., ¶ 1(c). Yet the Gyroor Defendants have transferred nearly 

$180,000 from their Amazon accounts. See Yuan Decl., ¶ 11–12. Gyroor-US alone has 

transferred over $100,000. Id., ¶ 11(a). There can be no doubt that specifically-named Gyroor 

entities before this Court are responsible for these violations. 

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IV. If the Gyroor Defendants Cannot Demonstrate Their Compliance with the PI, the 

Court Should Impose Sanctions 

This Court’s civil contempt power rests in the discretion of the district court, under in its 

inherent authority to ensure the orderly conduct of judicial proceedings. Pearle Vision, Inc. v. 

Romm, 541 F.3d 751, 757 (7th Cir. 2008). This Court therefore has “wide latitude to craft civil 

contempt sanctions to coerce obedience to the court's orders and compensate the plaintiff for 

losses.” Teledyne Techs. Inc. v. Shekar, 739 Fed. Appx. 347, 351 (7th Cir. 2018); Tranzact 

Techs., Inc. v. 1Source Worldsite, 406 F.3d 851, 855 (7th Cir. 2005) (“Civil contempt sanctions 

are properly imposed for two reasons: to compel compliance with the court order and to 

compensate the complainant for losses caused by contemptuous actions.”) “Compensatory civil 

contempt reimburses the injured party for losses and expenses, “losses flowing from 

noncompliance and expenses reasonably and necessarily incurred in the attempt to enforce 

compliance.” Norman Bridge Drug Co. v. Banner, 529 F.2d 822, 827 (5th Cir. 1976). As a 

consequence, courts routinely award to prevailing movants the attorney’s fees and costs 

necessary to bring the contemptuous actions to the attention of the court. Tranzact Techs., 406 

F.3d at 855; see also United States v. Greyhound Corp., 370 F. Supp. 881, 886 (N.D. Ill 1974). 

The Seventh Circuit has been willing to impose per diem penalties until compliance is insured. 

See In re Grand Jury Proceedings, 280 F.3d 1103, 1109 (7th Cir. 2002) (finding that imposition 

civil contempt fine of $1500 per day was not an excessive fine); see also Oxford Capital Illinois, 

L.L.C. v. Sterling Payroll Fin., L.L.C., 2001 WL 1491521, at *10 (N.D. Ill. Nov. 26, 2001) 

(imposing a $250 per day sanction for contempt). 

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The Gyroor Defendants’ conduct described above reflects repeated, willful, and longstanding violations of the PI. These actions have allowed the Gyroor Defendants to infringe 

without accountability, both by shielding their actions through a labyrinth of storefronts and by 

depleting assets in a manner that reduces a collectible judgment. Plaintiffs previously raised 

these troubling issues to the Gyroor Defendants but have been largely ignored. Given the 

evident need for a deterrent against non-compliance and the need to compensate Plaintiffs for 

these harms, should this Court hold the Gyroor Defendants in civil contempt, then Plaintiffs 

believe one or more following financial sanctions are appropriate: 

• Paying Plaintiffs the $179,378.08 depleted from Amazon accounts since January 6, 2021.

• Paying Plaintiffs all profits from infringing sales, since entry of the TRO. 

• Paying Plaintiffs’ costs and fees in filing this motion and otherwise policing the Gyroor 

Defendants’ conduct. If the Court determines such relief is appropriate, Plaintiffs will 

submit evidence regarding the amount of fees incurred. 

• Going forward, paying Plaintiffs a penalty of $1,000 for each day of non-compliance 

following entry of any contempt order. 

V. CONCLUSION 

The Gyroor Defendants’ actions described above suggest a flagrant violation of this 

Court’s PI. Although such conduct is grounds for contempt, Plaintiffs hesitate to move directly 

for contempt at the moment, because the evasive conduct leaves some doubt—however 

remote—regarding how and why the specific entities engaged in some aspects of the noncompliance. Therefore, Plaintiffs request that this Court issue an order for the Gyroor 

Defendants to show cause as to why they should not be held in contempt for violations of the PI 

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order. Should this Court find that the Gyroor Defendants’ forthcoming showing is insufficient, 

then Plaintiffs request that this Court exercise its authority under 18 U.S.C. § 401(3) and/or its 

inherent power, hold the Gyroor Defendants in civil contempt, and impose one or more monetary 

sanctions described in Section IV. 

Date: July 13, 2021 Respectfully submitted, 

By: /s/ Adam Kelly 

Adam Kelly 

Doug Masters 

Arthur Yuan 

Neil Nandi 

321 North Clark Street, Suite 2300 

Chicago, Illinois 60654 

Tel.: (312) 464-3100 

Fax: (312) 464-3111 

Email: akelly@loeb.com 

Email: dmasters@loeb.com 

Email: ayuan@loeb.com 

Email: nnandi@loeb.com 

Marwa Abdelazuz (admitted pro hac vice) 

345 Park Avenue 

New York, New York 10154 

Tel.: (212) 407-4000 

Fax: (212) 407-4990 

Email: mabdelaziz@loeb.com 

Attorneys for Plaintiffs

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