Ubiquity Wins Round II in Copycat Software Suit

(CN) - A federal judge strengthened her previous order that blocked sales of copycat wireless and networking products, and this time froze the alleged counterfeiter's real estate assets.

Ubiquiti Networks, a San Jose, Calif.-based company, sells some if its products under the Airos and AirMax registered trademarks. Its complaint alleges Kozumi USA used a former Ubiquity employee to obtain blueprints and reproduce the devices.

Kozumi allegedly sold so many counterfeit devices that it affected Ubiquiti stock prices.

Chinese police put an end to the manufacturing by raiding Kozumi's factory, but Ubiquiti says Kozumi is still selling its stock.

The case is also being tried in an Argentinean court where Ubiquiti says defendants Shao Wei Hsu and his wife Lilia Kung intend to obtain a large portion of the market.

In June, U.S. District Judge Claudia Wilken granted Ubiquiti Networks a temporary restraining order preventing Kozumi from selling counterfeit Ubiquity products it was manufacturing at a facility in Hong Kong.

That order all declined to freeze the company's assets because such remedy would be "too harsh" and could be harmful to the business of individual defendant William Hsu Wu, who is apparently misidentified in the complaint as Shao Wei Hsu.

Last week, however, Wilken rejected claims that Ubiquiti failed to connect his activities to the company's $6 million losses.

"Even if Ubiquiti did not allege a loss of money as a result of defendants' alleged counterfeiting, an injunction would be appropriate because 'injunctive relief is the remedy of choice for trademark and unfair competition cases, since there is no adequate remedy at law for the injury caused by a defendant's continuing infringement," Wilken wrote.

"Here, Ubiquiti submits proof that, on May 25, 2012, one week after it filed its lawsuit against defendants, Mr. Wu executed quitclaim deeds for four of his properties to Angela Kung, a resident of Brazil, and a quitclaim deed for one of his properties to Cheng Hung Chen, a resident of Taiwan," Wilken wrote. "Ubiquiti also submits a document indicating that the market value of one of the properties is over $364,000. However, the quitclaim deed indicates that Mr. Wu sold this property to Angela Kung for $10."

The preliminary injunction carries the same terms as the temporary restraining order, but goes a step further by freezing all of Kozumi's real estate assets located in the United States.

"Ubiquiti submits emails from its distributors and articles from the financial press to show that defendants' alleged counterfeiting and infringing acts are damaging Ubiquiti's reputation with its distributors and customers and in the financial markets in general," Wilken wrote. "This evidence more than satisfies Ubiquiti's burden to show that irreparable injury is likely in the absence of an injunction."

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit