(CN) – A federal judge weighing claims of a worldwide wireless counterfeiting scheme said an injunction would be useless now since the alleged copycat could have covered its tracks earlier.
Ubiquiti Networks, a Delaware-based company with offices in San Jose, Calif., claims that Florida-based Kozumi USA is selling counterfeit versions of its wireless Internet service provider products. The lawsuit demanded a restraining order to keep Kozumi from hiding its assets, but U.S. District Judge Claudia Wilken refused last week.
“Ubiquiti has not submitted an affidavit with a showing of immediate and irreparable harm to justify granting the relief it seeks without first offering defendants an opportunity to be heard,” Wilken wrote. “Although, in its motion, Ubiquiti argues that ‘there is a high likelihood that defendants will transfer assets out of the United States if they are not immediately restrained from doing so by this court,’ it does not submit an affidavit attesting to this, nor does it provide any other evidence supporting this claim.”
“If defendants intended to transfer assets out of this country as a result of this lawsuit, they had time to do so,” Wilken added. “Although Ubiquiti has shown that it will suffer irreparable harm from defendants’ continued counterfeiting and selling of Ubiquiti’s products, because this situation has been going on for months, if not years, the few additional days to serve defendants and receive their response will not add significantly to Ubiquiti’s injury.”
Kozumi founder and director Shao Wei Hsu is also named as a defendant.
Ubiquiti claims Hsu wasn’t satisfied with the profits he earned as a Ubiquiti distributor and began shipping copycat products of inferior quality from a plant in China, mainly to distributors in South America.
Hsu, a citizen of Brazil, conducts the scheme from an office in Wellington, Fla., according to the complaint.
Ubiquiti says its founder and CEO Robert Pera tried to stop Kozumi’s scheme, but Hsu allegedly made an ultimatum. He offered to give Ubiquiti the Argentina trademarks upon withdrawal of its lawsuit against the owner of the Chinese manufacturing plant that is allegedly producing the counterfeits, plus $2.5 million to cover losses incurred from the Chinese government’s raid of that plant, according to the complaint.
Pera, who responded by filing the complaint in San Francisco, says Hsu’s scheme has been so successful that it has significantly affected the price of his company’s stock and its performance on the NASDAQ.
On Wednesday, the stock fell $2.49, or 12.75 percent, closing out the day at $17.04 per share.