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 

REPLY MEMORANDUM IN SUPPORT OF PLAINTIFFS’ 

MOTION FOR AN ORDER TO SHOW CAUSE 

Plaintiffs’ motion included dozens of exhibits and several declarations establishing a 

prima facie case that the Gyroor Defendants have blatantly violated this Court’s preliminary 

injunction (“PI”) order. That evidence is substantial and the allegations are serious. Yet, the 

Gyroor Defendants’ opposition failed to address that substantial prima facie showing. Rather, it 

primarily raised unsubstantiated attorney arguments and depended upon a one-page fact 

declaration that offered conclusory facts which are squarely contradicted by the record. 

Notably, Gyroor-US proffered very little evidence to dispute Plaintiffs’ evidence of 

wrongdoing. And the remaining Gyroor Defendants (“Affiliated Defendants”) did not even 

contest their wrongdoing. Instead, they rely on an incorrect legal interpretation to argue, in 

effect, that they may disregard the PI and engage in such wrongdoing without limitation due to a 

manufactured notice dispute. In light of unrebutted evidence Plaintiffs have provided 

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demonstrating the Gyroor Defendants’ non-compliance with the PI and the lack of any legal 

justification for that non-compliance, Plaintiffs request that the Court hold the Gyroor 

Defendants in civil contempt of Court. 

I. Defendants’ Factual Assertions Are Verifiably Inaccurate and The Declaration of 

Mr. Xie is Not Credible 

Defendants’ opposition brief and supporting declaration are replete with conclusory 

statements and verifiable falsehoods. As an initial matter, the Declaration of Xie Rongqing—

which is the only piece of evidence offered in support of Defendants’ entire opposition—is 

merely a single-page consisting of eleven one-line conclusory statements. The declarant, Mr. 

Xie, is apparently the owner of Gyroor-US. So it is not surprising that his statements are selfserving. What is surprising, however, is the lack of any exhibits or documentation to corroborate 

Mr. Xie’s statements. In fact, many of his statements, which he made under oath on penalty of 

perjury, can be easily disproved by googling Amazon ASIN and warehouse policies. And Mr. 

Xie’s declaration makes statements solely pertaining to Gyroor-US, which effectively means that 

the remaining Affiliated Defendants failed to submit any evidence in their own defense. 

Instead, Affiliated Defendants rely on two incorrect and unsupported statements to argue 

that they are not bound by the PI Order: (1) that “Plaintiffs failed to serve or to notice the Seven 

Defendants,” and (2) that Affiliated Defendants “sell different products [that] are not bound by 

the Preliminary Injunction Orders.” Dkt. 370 at 3-4. These are not facts that have ever been 

established by the Court. In fact, this Court has explicitly stated that “[t]he facts relating to 

notice are contested.” Dkt. 359. And in any case, the Court recently observed in the August 24 

hearing regarding Gyroor-US's Emergency Motion to Dissolve the Preliminary Injunctions that 

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any alleged deficiencies in notice are now cured, since Defendants have been in this case for 

several months and thus have had actual notice of the PI Order. Further, Affiliated Defendants’ 

assertion they “sell different products” using different ASINs that are based on third-party 

patents is hardly a statement of fact at all. Rather it is a legal conclusion directed to the crux of 

this infringement action. 

In sum, the Gyroor Defendants’ factual allegations and failed presentation of evidence 

are insufficient to show cause as to why this Court should not be hold them in contempt for 

violating the PI order. 

II. The Gyroor Defendants Were Bound By the PI Order Because They Are Affiliated 

with Gyroor-US and Had Actual Notice 

The Affiliated Defendants admit that they have been selling Gyroor-branded hoverboards 

on Amazon—despite the Court’s PI commanding all third parties to cease doing so. To justify 

its behavior Defendants argue that they are not bound by the PI Order since somehow they did 

not receive proper notice. 

Notably, Defendants’ arguments are almost identical to those raised in Fengchi-US and 

Urbanmax’s Motion to Vacate the Preliminary Injunction, which the Court denied. Dkt. 359. 

Defendants cite to the same exact case law holding that non-parties must “given notice and an 

opportunity to be heard” before being bound to an injunction. Dkt. 370 at 2-3. This Court has 

observed that Defendants have been given ample opportunity to be heard on the merits of the PI 

Order, yet they have failed to take advantage of these opportunities time again. Dkt. 359 

(“Defendants do not present such evidence with their motion [to vacate the PI Order], instead 

focusing solely on the purported lack of notice. The facts relating to notice are contested. 

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Accordingly, the injunction will remain in place...”). Further undercutting Defendants’ position 

are several facts strongly suggesting that Affiliated Defendants had notice of the PI Order: 

As an initial matter, the Affiliated Defendants do not deny being affiliated with GyroorUS, nor do they deny having actual notice of the PI Order. While they may have been nonparties until May 2021, they were represented by Gyroor-US’s counsel since February 2021 

when Gyroor-US’s prior counsel asked Plaintiffs whether all seven of the Affiliated Defendants 

were involved in the case and requested exhibits of infringement for each of them. Dkt. 316, Ex. 

4. Moreover, the Court previously observed that there has been “ample opportunity for 

Defendants to contest whether they act in active concert and participation with [Gyroor-US],” 

noting “Defendants’ failure to take advantage of these opportunities.” Dkt. 359. Defendants’ 

opposition demonstrates another passed opportunity to show that they are not connected to 

Gyroor-US. By failing to deny their affiliation with Gyroor-US, the Affiliated Defendants 

contradict themselves by claiming that they lacked notice of the PI Order. Mr. Xie’s declaration 

makes the conclusory statement that “Gyroor-US is not affiliated, in active concert of [sic] 

participation with the sellers identified by Plaintiffs.” Xie Decl. ¶ 7. But if Gyroor-US truly 

contends that it is not associated with the Affiliated Defendants, then a declaration from GyroorUS’s owner should not purport to speak on behalf of all the Defendants. 

The Affiliated Defendants also assert that they “are not bound by the preliminary 

injunction until such a determination [that they are acting in active concert] is made.” Dkt. 370 

at 3. But the Seventh Circuit has held that non-parties engaging in conduct prohibited by an 

injunction “act at their peril if they disregard the commands of the injunction, for, if the district 

court ultimately determined that they are in concert with [the named defendant], then they will be 

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[held] in contempt of court.” Lake Shore Asset Mgmt. v. CFTC, 511 F.3d 762, 767 (7th Cir. 

2007). This Court recently adopted the Seventh Circuit’s warning when it stated, “other entities 

may act in concert with an enjoined entity, and those entities do so at their own peril. [] 

Therefore...this order specifically binds [Defendant] by name as well as, more generally, any 

individual or entity acting in active concert or participation with him.” Walgreens Co. v. Peters, 

No. 21 C 2522, 2021 U.S. Dist. LEXIS 140740, at *20 (N.D. Ill. July 28, 2021). As such, the 

Affiliated Defendants acted at their own peril when they decided to ignore the PI Order—

particularly in light of the substantial evidence that they have been acting in active concert with 

Gyroor-US. While Defendants may believe that their notice argument shields them from 

contempt of the PI Order, in reality Defendants are effectively admitting that they chose to 

ignore the Court’s order. 

Finally, the Affiliated Defendants claim that “Defendants like Fengchi-US,” who sell 

Gyroor-branded hoverboards using different ASINs, “are not bound by the Preliminary 

Injunction Orders” because their products are based on patents not owned by Plaintiffs and thus 

fall outside the scope of the injunction. Dkt. 370 at 4. Again, the Affiliated Defendants admit 

outright to selling Gyroor-branded hoverboards, but claim that their conduct was justified 

because the products do not “include any reproduction, copy or colorable imitation of the design 

claimed in the Patents-in-Suit.” Defendants point to absolutely no authority—other than 

Fengchi-US’s own motion to dismiss (Dkt. 366) that is not fully briefed—establishing that their 

products do not infringe the Patents-in-Suit. Id. Defendants rely on the same argument they 

have advanced on numerous occasions: that their products cannot infringe the Patents-in-Suit 

because they are based on different, third-party patents. But the Court has never established this 

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to be true as a matter of law or fact, nor is this a recognized defense to patent infringement as 

Plaintiffs have pointed out time again. See, e.g., Dkt. 333. Rather than contesting the PI Order 

on the merits and presenting their third-party patent license for inspection, or providing any 

controlling authority to support the existence of its position, which they have had ample

opportunity to do, the Affiliated Defendants simply ignored the Court’s PI Order and now seek 

to justify their non-compliance by summarily accepting as fact their own legal arguments 

regarding noninfringement. 

III. Gyroor-US Has Not Provided Any Evidence to Show that It Has Complied With 

the Preliminary Injunction 

Defendants’ next argument shifts the issue from notice to substance, focusing solely on 

Gyroor-US’s purported compliance with the PI Order. Dkt. 370 at 4-5. Gyroor-US addresses 

Plaintiffs’ allegations with only conclusory denials, unsubstantiated facts, and attorney 

arguments. 

First, Gyroor-US contends that Plaintiffs’ description of the Amazon ASIN policy “is 

inaccurate.” Dkt. 370 at 4. No facts are provided to support this statement. By contrast, 

Plaintiffs have described in detail the process by which ASINs are created by sellers and 

authorized by brand owners. Amazon’s “ASIN Creation Policy” expressly states that it “limit[s] 

the creation of new ASINs for a brand enrolled in Brand Registry by sellers who are not 

associated with the brand owner. . . [non-brand owners] may still seek approval to create the new 

ASIN if [they] can show that it is an authentic product of the brand, for which no ASIN exists 

yet.” Dkt. 227, Ex. 1. This means that if Affiliated Defendants were truly not associated with 

Gyroor-US, they would have had to gain authorization from Gyroor-US before creating new 

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ASINs for Gyroor-branded hoverboards. Gyroor-US cannot have it both ways: either the pop-up 

storefronts are not affiliated with Gyroor-US and need Gyroor-US’s authorization to sell branded 

products, or they are affiliated with Gyroor-US and require no authorization. Either way, 

Gyroor-US would be liable for violating the terms of the PI Order. 

Furthermore, when a new Amazon seller creates a listing using a brand owner’s existing 

ASIN, Amazon alerts the brand owner and provides it with a mechanism to report that seller and 

take down the listing. Yuan Decl. ¶ 17. As Plaintiffs previously explained in their Motion For 

Leave to Amend Schedule “A”, unless the new seller is related to the brand owner, the brand 

owner is typically motivated to prevent such ASIN unauthorized usage because the new listing 

would compete with their own product. Dkt. 328 at ¶ 5. Therefore, Gyroor-US would have had 

to consent to any storefront selling Gyroor-branded hoverboards under its ASIN No. 

B07PHFP8GB, including HGSM, Jiangyou-US, Urbanmax, and nonparty Runchenyun. Id. ¶ 31. 

Plaintiffs’ evidence leaves hardly any room for debate, which is likely why Defendants 

presented no evidence to support their statements that “Gyroor-US did not approve any tag-along 

merchants,” and that “[t]ag-along sellers of Gyroor Brand products do not need approval.” Xie 

Decl. ¶¶ 5-6. Because Gyroor-US is required to authorize all Amazon listings for Gyroorbranded hoverboards, Gyroor-US violated the PI Order by, at the very least, “aiding, abetting, 

contributing to, or otherwise assisting anyone in infringing upon the Patents-in-Suit.” Dkt. 147 

at 9. 

Second, Gyroor-US alleges that it “does not own or operate [www.gyroorboard.com].” 

Dkt. 370 at 5. This is another falsehood that is easily discredited. Plaintiffs previously explained 

that they placed an order for an infringing product on www.gyroorboard.com and the 

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confirmation email was sent from service@gyroor.com, which is the same email address listed 

on the “Contact Us” page for www.gyroor.com. Yuan Decl. ¶ 8. In addition to that evidence, 

Gyroor-US’s manufacturer Shenzhen Chitado Technology Co., Ltd., which is the “the official 

manufacturer of all products of the brand Gyroor” and owner of the “GYROOR” registered 

trademark, is linked to both www.gyroor.com and www.gyroorboard.com. Yuan Decl. ¶¶ 10-11. 

Moreover, in February 2021 counsel for Gyroor-US confirmed that Gyroor-US owns 

www.gyroorboard.com when it told Plaintiffs that “Chitado’s paypal accounts appears to now 

also be involved...According to them, this account is not linked to an Amazon store, but is 

linked to Gyroor’s own website— https://gyroorboard.com” (emphasis added). Yuan Decl. ¶ 12. 

Consequently, these facts strongly demonstrate that Gyroor-US violated the PI Order by 

engaging in direct infringement through www.gyroorboard.com. 

Fifth, Gyroor-US alleges that it never transferred any frozen assets out of its Amazon 

account, and that Amazon warehouse storage fees and product refunds are to blame for 

$144,319.51 being deducted from its account since January. Dkt. 370 at 5. It is difficult to 

believe that Amazon charges such exorbitant rates for warehouse storage, particularly since 

Amazon openly publishes its fee schedules, which indicate that the monthly fee for a 

professional selling plan is $39.99 and the monthly fee for warehouse storage is no more than 

$0.75 per cubic foot. Yuan Decl. ¶¶ 15-16. 

Besides the fact that its calculations are incredible, Gyroor-US has chosen not to provide 

its Amazon account records as evidence to corroborate its story, despite such records being 

readily available and critically important to its position. One can reasonably assume that 

Amazon sellers accounts, like all business accounts, leave a paper trail every time money goes in 

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and out of the account. Presumably, if Gyroor-US is able to offer any explanation at all for the 

transfers, it relied on some type of documentation to reach that explanation. Yet, it does not wish 

to share this documentation with the Court, even though doing so may show that it did not 

violate the PI Order. Unless the Defendants’ statements are fabrications, or they have not taken 

seriously the Order to Show Cause, it is unclear why they would choose not to disclose such vital 

evidence. Accordingly, the Court should reject Gyroor-US’s uncorroborated explanation 

regarding the transferred assets and hold the Defendants in contempt for violating the PI Order 

enjoining them from “transferring or disposing of money or other Defendants’ assets.” Dkt. 147 

at 11. 

CONCLUSION 

Given the evident need for a deterrent against current and future non-compliance and the 

need to compensate Plaintiffs for the harms sustained, this Court should hold the Gyroor 

Defendants in civil contempt of Court. Defendants offer no valid reasons—other than their own 

discredited and unsubstantiated statements—why the Court should not hold them in contempt for 

repeatedly violating the PI Order. Moreover, the pattern of continued infringement, coupled with 

Defendants’ scant evidentiary showings and attestation to outright inaccuracies, demonstrate a 

lack of candor for the PI Order and this judicial process. As such Plaintiffs request that this 

Court exercise its authority under 18 U.S.C. § 401(3) and/or its inherent power to impose one or 

more of the following monetary sanctions, along with any other monetary or injunctive relief the 

Court deems fit: 

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

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• Placing in a trust account with the Clerk of the Court all revenues from infringing sales 

reaped since entry of the TRO. 

• Paying Plaintiffs’ costs and attorney’s fees associated with the preparation and filing this 

motion and otherwise policing the Gyroor Defendants’ conduct. If the Court determines 

such relief is appropriate, Plaintiffs will submit evidence regarding the fees incurred. 

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

following entry of any contempt order. 

Date: August 24, 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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