Follow-up to the "Banner Pulling" Incident: Big Seller Promises to Withdraw the Lawsuit

Yesterday, the news of a seller hanging banners downstairs of a cross-border shopping mall in Shenzhen spread throughout the industry, and the sellers were outraged by the preemptive registration and phishing. However, many people did not know what product was the cause of the banner-hanging incident, and how many sellers were implicated and had their accounts frozen.

Yien.com learned the details of the incident and learned that the rights-defending sellers had reached an agreement with the seller in question yesterday, and the latter promised to withdraw the lawsuit before November 10. Regarding the mass prosecution of sellers, the seller gave another explanation, saying that he was also a victim. What is the truth? Can the accused sellers get away with it?

"Fairy Wings" set off a "banner-pulling" storm

The decorative prop "Fairy Wings" is a hot item for holiday sellers. This product has a long history and was once very popular before Halloween in 2021. Many sellers entered the market at this time. Lin Zhenwei is one of them. Before the peak season in 2021, he purchased a batch of "Angel Wings" from China and sold them on Amazon. After October 1, the product began to be sold steadily.

This year, Lin Zhenwei continued to sell this product, but during the hot selling period, his account funds were frozen and some of his wing products were removed from the shelves because his store "Fairy Wings" was TROed for infringing the copyright. The plaintiff was SHENZHEN QINGXIYUE ELECTRONIC COMMERCE CO., LTD . According to the case information, there were 128 Amazon sellers in this batch of defendants , and Lin Zhenwei alone had $300,000 frozen.

According to public information, QINGXIYUE registered and obtained the intellectual property rights of "Fairy Wings" in the United States in October 2022, which was significantly later than the time when the product was sold on the market. Now that the product TROs have exploded, the industry believes that this is a premeditated registration.

( Video of fairy wings related products 7 years ago)

So the seller in question followed the clues and found Xia, the legal representative of QINGXIYUE Company, to argue with him. The subsequent course of events was unexpected.

Xia said that he was a former employee of a large sales company in Shenzhen. During his employment, the company used his identity information to register the company QINGXIYUE. In February this year, Xia resigned from the large sales company. In April, the legal person and actual controller of QINGXIYUE was changed to Li. However, as of recently, the company's public phone number, email address and other contact information are still Xia's. The angry sellers kept finding Xia to argue, and the latter could only repeatedly tell him: "QINGXIYUE was registered by the previous company, and I am not the legal person anymore. I have never complained about anyone during my employment."

A seller communicated with an insider of the big seller and asked whether the copyright complaint and TRO on October 20 were carried out by the company or related parties. The insider said that they had verified with the leaders of the relevant departments that the company had commissioned lawyers to take some actions, but now the decision-making power is in the hands of American lawyers, and they can only express their willingness to settle with American lawyers. But the next day, the insider changed his words: "We contacted the lawyers yesterday, and what you said was not done by us."

At the same time, Xia, who was constantly bombarded with information, was also communicating with the staff of the big seller company to convey the seller's willingness to resolve the situation. The contact person of the big seller company told him, "I talked to the lawyer and asked them to send the seller ID, and everything will be unfrozen." Soon, the sellers who were TRO received an email, but it was not a withdrawal of the lawsuit as they thought, but a settlement email.

The email said that if the seller is willing to settle, please reply to the email and contact the lawyer to discuss the settlement plan. After reaching a settlement, the law firm will reply to the seller's account and unfreeze the frozen funds within 2-4 working days.

This was not the result the defendant seller wanted. After several days of ineffective communication, former employee Xia was under great pressure and called the police on October 30. Lin Zhenwei and other sellers also gathered downstairs of Shenzhen Damai yesterday and held up banners, hoping to use public pressure to get Damai to withdraw the lawsuit. The industry was in an uproar and public opinion was one-sided.

The big seller said that the lawsuit had reasons and he was threatened first

After the "banner-pulling" incident, the operator of the big seller said in an interview with the media that the company did not maliciously TRO the small seller, but was just trying to protect its own legitimate interests. "The comments said that we would (register) in 2022, so if we wanted to fish, we would have done it a long time ago. Why wait until this year?" So why did the big seller explode now?

It is understood that at the end of September, the Shenzhen seller received a threatening letter from a Xiamen seller, who said:

“The wings sold by your company are our patented products. We have commissioned American lawyers to collect evidence and provided the infringement information to Amazon. Currently, unauthorized sellers will receive Amazon’s notice of suspension of sales.

We have already sold this product on our independent website in 2021, and have registered the US copyright in 2021 and the US appearance patent in 2022. Currently, the cellular growth of US third-party sellers has seriously affected our overseas sales business. We hereby inform your company:

1. Carry out authorization and pay the authorization fee;

2. Immediately stop selling and destroy the product. "

The big seller was enraged and started to fight back, thus initiating this TRO, but he said that it was because he lacked experience in handling intellectual property cases for the first time that he accidentally hurt many sellers, and he also said that he was a victim of intellectual property trolls.

In fact, the Xiamen seller also "condoled" to other sellers. Lin Zhenwei said that the seller also asked him for money, and he gave 50,000 yuan to settle the matter.

"The guy in Xiamen contacted us through WeChat, just to ask for money, with a simple purpose. He wanted money, but Shenzhen wanted to sell like crazy. Now the situation has become a dog biting a wolf, the wolf bit everyone, and then the wolf said he had reasons."

This group of sellers who were victims of TRO do not agree with Shenzhen Dama’s “counterattack theory”. One of them said bluntly: “What he is doing is making excuses. I also have copyrights and I obtained it earlier than him. Why didn’t I do this?” In the sellers’ view, if Shenzhen Dama wants to protect his rights, he can directly invalidate the patent of the Xiamen seller. Complaints and TRO are completely different links, instead of indiscriminately attacking everyone after being bitten.

Lin Zhenwei believes that Shenzhen Dashou’s registration is a fact. “Since he said he was fighting back to protect his rights, why did he ask us other sellers to pay compensation? The other party’s lawyer even threatened us in return.”

After yesterday’s banner incident, the subdistrict office mediated between the defendant seller and the Shenzhen seller.

"Their demands were excessive. At first they said there would be no settlement, but we disagreed, because then we would have to admit infringement. Then they said they would first ask the sellers present to withdraw the lawsuit, but we were worried that our store would be targeted, so we didn't agree. Finally they promised to withdraw all the TRO sellers before November 10th. "

After half a month of exhaustion, Lin Zhenwei and other sellers finally made some progress, but that was all.

"It is true that this big seller has been registering patents everywhere, but this time he just happened to run into the seller from Xiamen, which gave him a reason to get away with it. There is nothing we can do. I hope he will be more restrained in the future. Just treat this as an accidental injury and withdraw the lawsuit against us. Hundreds of thousands of US dollars have been frozen for me, and there are hundreds of people in the company who are waiting for me to support them," he said.

( Lin Zhenwei is a pseudonym )