Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 1 of 47 Page ID #:1

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J. Andrew Coombs (SBN 123881)

andy@coombspc.com
Annie S. Wang (SBN 243027)
annie@coombspc.com
J. Andrew Coombs, A Prof. Corp.
520 East Wilson Ave., Suite 200
Glendale, California 91206
Telephone: (818) 500-3200
Facsimile: (818) 500-3201
Michael W.O. Holihan (pending pro hac admission)
michael.holihan@holihanlaw.com
Holihan Law
1101 North Lake Destiny Road, Suite 275
Maitland, FL 32751
Telephone: (407) 660-8575
Facsimile: (407) 660-0510
Attorneys for Plaintiff Nike, Inc.

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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)
)
)
Plaintiff,
)
v.
)
)
KAL AMERICA, INC., PROWAY
)
FORWARDING, INC., CAPITAL
)
FREIGHT MANAGEMENT INC., AND )
VARIOUS JOHN DOES, JANE DOES )
and XYZ COMPANIES, inclusive,
)
)
Defendants.
)
)
)

NIKE, INC.,

Case No.
COMPLAINT FOR TRADEMARK
COUNTERFEITING,
TRADEMARK INFRINGEMENT,
FALSE DESIGNATION OF
ORIGIN, IMPORTATION OF
GOODS BEARING
INFRINGING MARKS, AND
VIOLATION OF TARIFF ACT
DEMAND FOR A JURY TRIAL

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Plaintiff NIKE, Inc. (hereinafter referred to as Nike), by its attorneys J.

Andrew Coombs, A Prof. Corp. and Holihan Law allege on knowledge as to its own
acts and otherwise on information and belief as follows:

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Nike v. KAL America, Inc.: Complaint

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NATURE OF THE ACTION

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1.

This is an action for trademark counterfeiting, trademark infringement,

false designation of origin, and the unlawful importation of goods bearing

infringing/counterfeit marks in violation of the laws of the United States and the

violation of the Tariff Act. Nike seeks an injunction, damages and related relief.
JURISDICTION AND VENUE

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2.

The Court has jurisdiction over this matter pursuant to 15 U.S.C. 1121

and 28 U.S.C. 1331, and 1338. Plaintiffs claims are predicated upon the Lanham

Trademark Act of 1946, as amended, 15 U.S.C. 1051, et seq. and Tariff Act, 19

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U.S.C. 1526(a). Venue is properly founded in this district pursuant to 28 U.S.C.

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1391 (b) and (c).

THE PARTIES

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3.

Nike is an Oregon corporation and maintains its principal place of

business at One Bowerman Drive, Beaverton, Oregon 97005.

4.

Defendant KAL America, Inc. (hereinafter referred to as KAL) is a

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California corporation whose principal place of business is 803 S. Inglewood Avenue,

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Inglewood, CA 90301. KAL is a licensed customs broker that transacts business in

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and/or has contracted to import, distribute, transport, or assist in the importation,

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distribution, and/or transportation of the infringing and counterfeit goods at issue in

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California and in this judicial district, and that regularly conducts customs business

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within this judicial district.

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5.

Defendant Proway Forwarding, Inc. (hereinafter referred to as Proway)

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is a California corporation whose principal place of business is 1111 Corporate

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Center Drive, Suite 103, Monterey Park, CA 91754. Proway is a freight forwarder

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who provides transportation services for, among others, goods being shipped from

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China to the United States. Proway transacts business in and/or has contracted to

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import, distribute, transport, or assist in the importation, distribution, and/or

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transportation of the infringing and counterfeit goods at issue in California and in this

judicial district, and that regularly conducts customs business within this judicial

district.

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Defendant Capital Freight Management Inc. (hereinafter referred to as

Capital Freight) is a California corporation whose principal place of business is

2501 Davidson Drive, Suite 300, Monterey Park, CA 91754. Capital Freight is a

licensed freight forwarder and Non-Vessel Operating Common Carrier (NVOCC)

who provides freight forwarding services for, among others, goods being shipped

from China to the United States. Capital Freight transacts business in and/or has

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contracted to import, distribute, transport, or assist in the importation, distribution,

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and/or transportation of the infringing and counterfeit goods at issue in California and

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in this judicial district, and that regularly conducts customs business within this

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judicial district.

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7.

Due to the nature of the Defendants business practices, the identity of

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the various John Does, Jane Does and XYZ Companies is not presently known, with

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the exception of KAL, Proway, and Capital Freight. The Complaint herein will be

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amended, if appropriate, to include the name or names of said individuals and/or

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entities when such information becomes available (KAL, Proway, Capital Freight,

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and the various John Does, Jane Does and XYZ Companies will hereinafter be

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collectively referred to as Defendants).

NIKES FAMOUS TRADEMARKS

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8.

Since 1971, Nike has advertised, offered for sale, and sold footwear and

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other related products throughout the United States. Nikes sneakers have been

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widely advertised, offered for sale and sold throughout the United States under

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various distinctive trademarks, including NIKE, NIKE AIR, the distinctive

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Swoosh Design, which sometimes is used in conjunction with the NIKE

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trademark or the NIKE AIR trademark, and the Jumpman Design trademark.

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The Nike trademarks have at all relevant times been owned by Nike or its

predecessor.

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As a result of their exclusive and extensive use, the Nike trademarks

have acquired enormous value and recognition in the United States and throughout

the world. The Nike trademarks are well known to the consuming public and trade as

identifying and distinguishing Nike exclusively and uniquely as the source of origin

of the high quality products to which the marks are applied. The Nike trademarks are

both inherently distinctive and famous.

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The Nike trademarks registered in the United States Patent and

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Trademark Office for footwear include the following (hereinafter collectively the

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Nike Trademarks):
REGISTRATION
NO.

DATE OF
ISSUANCE

CLASS

SWOOSH DESIGN

977,190

1/22/74

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NIKE
SWOOSH
NIKE
NIKE AIR
COMPOSITE
MARK

978,952
1,200,529
1,214,930

2/19/74
7/6/82
11/2/82

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1,284,386

7/3/84

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NIKE AIR

1,307,123

11/27/84

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SWOOSH DESIGN

1,323,342

3/5/85

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SWOOSH DESIGN

1,323,343

3/5/85

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NIKE
COMPOSITE
DESIGN

1,325,938

3/19/85

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SWOOSH AIR
DESIGN

2,068,075

6/3/97

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MARK

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DESIGN

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JUMPMAN
DESIGN

1,558,100

9/26/89

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JUMPMAN
DESIGN

1,742,019

12/22/92

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AIR JORDAN

1,370,283

11/12/85

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AIR FORCE 1

3,520,484

10/21/08

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Most of the foregoing registrations have achieved incontestable status

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pursuant to 15 U.S.C. 1065. Nike also owns numerous registrations for the Nike

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Trademarks for goods and services other than footwear.

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DEFENDANTS WRONGFUL ACTIVITIES

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Defendants, without the consent of Nike, imported, distributed and

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transported, and/or arranged for, assisted in and/or caused the importation,

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distribution or transportation in interstate commerce of footwear bearing unauthorized

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reproductions, copies, counterfeits and colorable imitations of the Nike Trademarks.

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13.

Goods do not legally enter the United States until U.S. Customs and

Border Protection (Customs) authorizes their importation.

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Goods brought to the United States may not be distributed or further

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transported domestically within the United States until Customs has cleared the goods

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for entry into the United States.

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15.

A customs brokers action in filing entry documents allowing for the

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clearance of goods by Customs (and ultimately, the entry of the goods into the United

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States) is an integral part of the importation process as well as a prerequisite for the

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further distribution and transportation of such goods.

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A freight forwarders provision of freight forwarding services for goods

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being shipped from China to the United States is an integral part of the transportation

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and importation processes, as the freight forwarder causes and/or arranges for the

transportation and importation of goods into the United States.

17.

On or around February 6, 2013, Defendants filed, or caused to be filed,

entry documents with Customs entry number BRI-0023254-6 (hereinafter referred to

as the Fayco Entry), allowing for the importation of Infringing Nike Product into

the United States. A copy of the entry document filed by the Defendants in

conjunction with the Fayco Entry is annexed hereto as Exhibit A.

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The Fayco Entry consisted of 9,456 pairs of Infringing Nike Product that

were seized by Customs and valued at $347,004.00 (hereinafter the Counterfeit Nike

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Footwear) and 2,800 infringing Nike labels (hereinafter Infringing Nike Labels)

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(hereinafter collectively Infringing Nike Product). A copy of Customs seizure

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notices to Nike concerning the Fayco Entry is annexed hereto as Exhibit B. A

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photograph of a sample of the Counterfeit Nike Footwear has been annexed hereto as

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Exhibit C and a photograph of a sample of the Infringing Nike Labels has been

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annexed hereto as Exhibit D.

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19.

The entry documents filed by KAL in conjunction with the Fayco Entry

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were fraudulent in that they falsely identified the Infringing Nike Product as

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Polyresin Ceramic Ware, they falsely identified Fayco Industries Inc. (hereinafter

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referred to as Fayco) of 3 Atlantic Street, Plainsboro, NJ 08536 as the Importer of

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Record and Ultimate Consignee for the Infringing Nike Product shipment, and they

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falsely stated that KAL was Faycos attorney in fact authorized to file entry on

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Faycos behalf.

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20.

Fayco is engaged in the business of selling Butane Lighters. Fayco is

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not in the business of importing counterfeit or authentic Nike footwear.

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information and belief, Fayco was a victim of identity theft, as the Defendants

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illegally used Faycos name, address and Internal Revenue Service employer

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Upon

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identification number (EIN) in order to import the Infringing Nike Product into the

United States.

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As a customs broker, KAL is licensed by Customs. Licensed customs

brokers are authorized to formally enter goods into the United States on behalf of

importers.

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22.

The entry documents were filed, or caused to be filed, by Defendants and

executed by KAL as attorney in fact for Fayco.

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In order to file the entry documents with Customs, KAL was required to

have a valid customs power of attorney (hereinafter POA) from Fayco.

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KAL was required to exercise due diligence in verifying their authority

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via the POA from Fayco (hereinafter referred to as Fayco POA) and related

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shipping documentation.

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KAL was also required to use reasonable care in determining the

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nature of the goods covered by the entry documents to determine, among other things,

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whether the goods bore the trademarks of any U.S. company before filing, or causing

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to be filed, said entry documents with Customs.

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The United States Attorney has affirmed that a customs broker must

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exercise reasonable care to ensure that a POA in his or her possession is valid, and

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directs customs brokers to Customs publication on the Customs website for guidance

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as to methods by which brokers may validate a POA. A copy of the U.S. Attorneys

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letter is annexed hereto as Exhibit E.

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Customs recommends that customs brokers validate a power of attorney

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by hav[ing] POAs completed in person so the grantors personal identification

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(drivers license, passport, etc.) can be reviewed. Customs also recommends other

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methods by which brokers may validate POAs, including website searches. A copy of

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Customs POA validation guidelines is annexed hereto as Exhibit F. The guidelines

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are

also

http://www.cbp.gov/trade/broker/validating-poa.
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available

on

Customs

website

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Prior to the making of the Fayco Entry, KAL failed to make any inquiry

as to the nature of the Infringing Nike Product, including a determination that the

goods bore any Nike Trademarks. KAL likewise failed to make any reasonable

inquiry as to the source of the Fayco POA.

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Upon information and belief, KAL had no contact with any person at

Fayco or anyone who represented they had any connection to Fayco or the Fayco

Entry.
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Despite KALs reference to the Fayco POA professing to give them

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authority to make the Fayco Entry, Fayco has denied that it ever executed a POA, had

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any relationship with KAL or had ever authorized KAL to act on its behalf

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concerning the importation of any goods.

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If KAL had exercised reasonable care and/or due diligence in validating

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the Fayco POA as recommended by Customs, it would have quickly determined that

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the POA was fraudulent and Fayco was not the actual importer of the Infringing Nike

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Product.
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Proway and Capital acted as the consignee and/or ocean transportation

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intermediary for the Counterfeit Nike Footwear and materially assisted in the

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transportation and importation of the Counterfeit Nike Footwear from China to the

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U.S.

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Proway and Capital Freight hired and paid to arrange and cause the

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clearance of the Fayco Entry through Customs so that the goods could distributed in

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commerce in the United States. Upon information and belief, Proway and Capital

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Freight did this without having any direct contact with Fayco or anyone who

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represented they had any connection to Fayco or the Fayco Entry.

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34.

Proway and Capital Freight passed on a false and fraudulent POA in

Faycos name to KAL.

fraudulent shipping documents concerning the Fayco Entry to KAL with the intent to

cause KAL to then file the fraudulent documents with Customs. Proway and Capital

Freight knew or should have known that the Fayco POA and shipping document

related to the Fayco Entry were false and fraudulent.

35.

Proway and Capital Freight also passed on false and

Upon information and belief, at all material times Proway and Capital

Freight had no direct contact with Fayco, and instead dealt with third parties with no

real or apparent authority to authorize the Fayco Entry, or to pass on a POA in

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Faycos name, or to possess any right to pass on shipping documents related to the

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Fayco Entry.

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36.

Defendants knew or should have known that the Fayco POA that Proway

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and/or Capital Freight provided to KAL was fraudulent as Proway and/or Capital

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Freight did not obtain the Fayco POA from Fayco.

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37.

Defendants actions in filing and/or assisting in the filing of the

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fraudulent entry documentation related to the Fayco Entry constitutes the proximate

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cause of the importation of the Infringing Nike Product.

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38.

By filing the fraudulent entry documentation and/or assisting in the filing

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of the fraudulent entry documentation concerning the Infringing Nike Product without

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authorization from Fayco, Defendants deemed themselves to have an interest in the

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goods and to be responsible for their importation.

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39.

KAL willfully disregarded their duties as a customs broker in filing the

Fayco Entry documents for the Infringing Nike Product.

40.

KAL also acted as the customs broker and Proway and Capital Freight

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acted as freight forwarder for no less than twenty (20) other shipments (hereinafter

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Additional Unauthorized Entries) allegedly on behalf of Fayco that were not seized

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by Customs, but again were never authorized by Fayco. Upon information and belief,

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the entry documentation filed for these Additional Unauthorized Entries was based

upon the same fraudulent Fayco POA received from Proway and/or Capital Freight

and based on additional fraudulent shipping documents forwarded from Proway

and/or Capital Freight to KAL.

41.

The acts of the Defendants in importing, distributing, transporting,

arranging for, or assisting in and/or causing the importation, distribution,

transportation, in interstate commerce of the Infringing Nike Product: (a) are likely to

cause confusion and mistake among the consuming public that all such Infringing

Nike Product originates with Nike; (b) are likely to cause confusion and mistake

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among the consuming public that there is some affiliation, connection or association

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between Defendants and Nike; and/or (c) are likely to cause confusion and mistake

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among the consuming public that said Infringing Nike Product are being offered to

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the consuming public with the sponsorship or approval of Nike.

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42.

Defendants imported, distributed, transported, or assisted in and/or

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caused the importation, distribution and/or transportation of the Infringing Nike

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Product knowing the Infringing Nike Product bore counterfeits of the Nike

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Trademarks, or willfully ignored whether the Infringing Nike Product bore

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counterfeits of the Nike Trademarks. Defendants engaged in a deliberate effort to

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cause confusion and mistake among the consuming public as to the source, affiliation

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and/or sponsorship of said Infringing Nike Product and, to gain to Defendants, the

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benefit of the enormous goodwill associated with the Nike Trademarks.

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aforementioned acts of Defendants are also likely to dilute, and have diluted, the

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distinctive quality of the Nike Trademarks.

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43.

The

Defendants actions constitute a direct infringement in violation of the

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Lanham Act or, such conduct makes the Defendants contributorily and/or vicariously

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liable for the infringement through their assistance that caused and/or resulted in

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importation, distribution and/or transportation of the Infringing Nike Product.

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FIRST CLAIM FOR RELIEF

(TRADEMARK COUNTERFEITING)

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44.

Nike repeats each and every allegation set forth in paragraphs 1 through

43 above as if fully set forth herein.

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45.

The Nike Trademarks, as they are being used by Defendants, are

identical to or substantially indistinguishable from the registered Nike Trademarks.

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Accordingly, Defendants have engaged in trademark counterfeiting in violation of 15

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U.S.C. 1114.
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46.

Such conduct on the part of Defendants has injured Nike in an amount to

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be determined at trial and has caused and threatens to cause irreparable injury to Nike
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for which Nike has no adequate remedy at law.

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SECOND CLAIM FOR RELIEF

(TRADEMARK INFRINGEMENT)

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47.

Nike repeats each and every allegation set forth in paragraphs 1 through

46 above as if fully set forth herein.

48.

Defendants use of the Nike Trademarks, without Nikes consent,

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constitutes trademark infringement in violation of 15 U.S.C. 1114, in that, among

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other things, such use is likely to cause confusion, deception and mistake among the

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consuming public and trade as to the source, approval or sponsorship of footwear and

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other products bearing counterfeit and infringing Nike Trademarks.

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49.

Such conduct on the part of Defendants has injured Nike in an amount to

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be determined at trial and has caused and threatens to cause irreparable injury to Nike

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for which Nike has no adequate remedy at law.

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THIRD CLAIM FOR RELIEF

(FALSE DESIGNATION OF ORIGIN)

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50.

Nike repeats each and every allegation set forth in paragraphs 1 through

49 above as if fully set forth herein.

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51.

Defendants use of the Nike Trademarks, without Nikes consent,

constitutes the use of false or misleading designations of origin and/or the making of
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false or misleading representations of fact in violation of 15 U.S.C. 1125(a), in that,

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among other things, such use is likely to cause confusion, deception and mistake
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among the consuming public and trade as to the source, approval or sponsorship of
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the footwear imported and distributed by Defendants bearing counterfeit and

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infringing Nike Trademarks.

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52.

Such conduct on the part of Defendants has injured Nike in an amount to

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be determined at trial and has caused and threatens to cause irreparable injury to Nike
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for which Nike has no adequate remedy at law.

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FOURTH CLAIM FOR RELIEF

(IMPORTATION OF GOODS BEARING INFRINGING MARKS OR
NAMES)

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53.

Nike repeats each and every allegation set forth in paragraphs 1 through

52 above as if fully set forth herein.

54.

Defendants imported Infringing Nike Product bearing unauthorized

reproductions, counterfeits, copies and colorable imitations of the Nike Trademarks in

violation of 15 U.S.C. 1124.
55.

Defendants have materially contributed to the importation of Infringing

Nike Product bearing unauthorized reproductions, counterfeits, copies and colorable

imitations of the Nike Trademarks.

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56.

Defendants have realized gains and profits from the importation, and/or

assisting in the importation, of the Infringing Nike Product bearing unauthorized

reproductions, counterfeits, copies and colorable imitations of the Nike Trademarks.

57.

Such conduct on the part of Defendants has injured Nike in an amount to

be determined at trial and has caused and threatens to cause irreparable injury to Nike

for which Nike has no adequate remedy at law.

FIFTH CLAIM FOR RELIEF

(VIOLATION OF TARIFF ACT)

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58.

Nike repeats each and every allegation set forth in paragraphs 1 through

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57 above as if fully set forth herein.

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59.

Defendants imported Infringing Nike Product bearing unauthorized

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reproductions, counterfeits, copies and colorable imitations of the Nike Trademarks in

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violation of 19 U.S.C. 1526(a).

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60.

Nike has filed copies of its federal trademark registrations covering one

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or more of the Nike Trademarks with the Department of Treasury and U.S. Customs.
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61.

Such conduct on the part of Defendants has injured Nike in an amount to

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be determined at trial and has caused and threatens to cause irreparable injury to Nike
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for which Nike has no adequate remedy at law.

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PRAYER FOR RELIEF

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WHEREFORE, Nike demands judgment as follows:

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A.

Permanently enjoining and restraining Defendants, their respective

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subsidiaries, affiliates, divisions, officers, directors, principals, servants, employees,

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successors and assigns, and all those in active concert or participation with them:
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1.

From importing, exporting, assisting in the importation or exportation,

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manufacturing, procuring, distributing, shipping, retailing, selling,

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offering for sale, marketing, advertising, or trafficking in any

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merchandise not authorized by Nike and bearing unauthorized

simulations, reproductions, counterfeits, copies, or colorable imitations

of the Nike Trademarks which are likely to cause confusion, or bearing a

design that is of a substantially similar appearance to the Nike

Trademarks listed in this complaint;

2.

From passing off, inducing, or enabling others to sell or pass off as

authentic products produced by Nike or otherwise authorized by Nike,

any product not manufactured by Nike or produced under the control or

supervision of Nike and approved by Nike, which uses any of the Nike
Trademarks listed in this complaint;

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3.

From committing any act calculated to cause purchasers to believe that

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products from Defendants are those sold under the control and

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supervision of Nike, or are sponsored, approved, or guaranteed by the

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Nike, or are connected with and produced under the control or

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supervision of Nike;

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4.

From transacting customs business in the name of a principal when

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acting as a licensed customs broker without first receiving a valid POA

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from said principal. In compliance with this requirement, KAL shall

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take reasonable steps to investigate and confirm the authenticity of all

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POAs it receives prior to filing any customs entry document or otherwise

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conducting customs business. Such reasonable investigation shall

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include, but not be limited, to fully complying with one of the following

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three:

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a)

KAL shall:
(i)

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receive and have in its possession a fully notarized

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POA granting authority from the Importer to the

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Customs Broker prior to the filing of any entry

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documents. The notary of such POA shall record on

the notarized POA the full name and address as

detailed on the U.S. (federal or state government)

issued passport, drivers license or identity card

(hereinafter collectively U.S. Government ID)

bearing the signatorys photograph, together with the

U.S. Government ID number(s) and Governmental

agency which issued the U.S. Government ID; and

(ii)

contact the Importer directly, via a telephone number

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listed on the Importers own website or as identified

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on a publicly available database such as yellow

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pages, white pages, or as identified through an open

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source web based search through Google or the

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like, and confirm that the person listed on the POA

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works for the Importer, holds the position with the

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Importer indicated on the POA, and has authority to

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bind the Importer. In this telephone call the Customs

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Broker shall also confirm that the Importer is aware

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of the shipment(s) for which the Customs Broker is

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filing entry. In carrying out this verification, the

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Customs Broker shall make a contemporaneous

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record of the verification call including recording the

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time, date and telephone number called, the name and

24

position of the person contacted at the Importer, and

25

any limitations or reservations given by the contact

26

person concerning the verification;

27
28

or
Nike v. KAL America, Inc.: Complaint

- 15 -

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 16 of 47 Page ID #:16

b)

KAL shall:
(i)

receive and have in its possession a fully notarized

POA granting authority from the Importer to the

Customs Broker prior to the filing of any entry

documents. The notary of such POA shall record on

the notarized POA the full name and address as

detailed on the U.S. Government ID bearing the

signatorys photograph, together with the U.S.

Government ID number(s) and Governmental agency

which issued the U.S. Government ID; and

10

(ii)

11

receive payment for all of its services directly from

12

the Importer prior to the filing of the entry

13

documents. Such payment shall be made via business

14

check or wire transfer and either form of payment

15

shall identify the identical Importer as detailed on the

16

POA;

17
18

or
c)

KAL shall:
(i)

19

receive and have in its possession a fully executed

20

POA granting authority from the Importer to the

21

Customs Broker prior to the filing of any entry

22

documents; and
(ii)

23

contact the Importer directly, via a telephone number

24

listed on the Importers own website or as identified

25

on a publicly available database such as yellow

26

pages, white pages, or as identified through an open

27

source web based search through Google or the

28

Nike v. KAL America, Inc.: Complaint

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Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 17 of 47 Page ID #:17

like, and confirm that the person listed on the POA

works for the Importer, holds the position with the

Importer indicated on the POA, and has authority to

bind the Importer. In this telephone call the Customs

Broker shall also confirm that the Importer is aware

of the shipment(s) for which the Customs Broker is

filing entry. In carrying out this verification, the

Customs Broker shall make a contemporaneous

record of the verification call including recording the

10

time, date and telephone number called, the name and

11

position of the person contacted at the Importer, and

12

any limitations or reservations given by the contact

13

person concerning the verification; and

(iii)

14

receive a clear digital copy of a U.S. Government or

15

State ID bearing a photograph of a principal, director,

16

officer or other employee bearing the identical name

17

of the individual who signed the POA and for whom

18

the Customs Broker has verified with the Importer

19

has capacity to bind the Importer.;

20

5.

In complying with Paragraph (4) above, where KAL receives a POA

21

referral from another Customs Broker or from a freight forwarder

22

(known as an Authorizing Agent), KAL is required to take reasonable

23

steps to validate the identity of the individual who issued the original

24

POA to the Authorized Agent consistent with Paragraph 4 above.

25

6.

In compliance with Paragraph 4 above, KAL is also required to maintain

26

all records of its independent validations conducted pursuant to

27

Paragraph 4, including any government identification reviewed.

28

Nike v. KAL America, Inc.: Complaint

- 17 -

All

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 18 of 47 Page ID #:18

documentation reviewed and all notes taken during any telephone

conversations undertaken to validate any POA, shall be maintained for

five (5) years from the date of the POA or the date on which such

validation was conducted by Defendants, whichever is later.

7.

Proway and Capital Freight, when referring customs broker business to a

licensed customs broker for any person or entity importing merchandise

into the United States, shall fully cooperate with the licensed customs

broker to assist the customs broker in validating the identity of the

importer consistent with paragraphs A (4),(5) and (6) above, ensuring

10

that such validation occurs prior to any entry being filed for said

11

importer. If Proway or Capital Freight are unable to confirm such

12

validation in writing prior to the filing of entry, Proway and Capital

13

Freight shall have an independent obligation themselves to validate the

14

importers POA consistent with the requirements of paragraphs A (4),(5)

15

and (6) above prior to entry being filed.

16

8.

Proway and Capital Freight from providing cargo transportation services

17

for counterfeit or infringing goods which goods violate any United States

18

registered trademark (hereinafter Unauthorized Goods), to and/or from

19

any U.S. port, or filing or causing to be filed false information with

20

CBPs

21

Unauthorized Goods, without first making a due diligence investigation

22

into the authenticity and source of the transportation documentation upon

23

which it relied to provide transportation services or to make any AMS

24

filing concerning the Unauthorized Goods. The Parties stipulate and

25

agree that the following procedures, if fully and materially complied

26

with by Proway and Capital Freight, shall meet the due diligence

27

investigation requirement required by Section D of this Injunction:

28

Automated

Manifest

Nike v. KAL America, Inc.: Complaint

- 18 -

System

(AMS),

concerning

such

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 19 of 47 Page ID #:19

a) Proway and Capital Freight shall:

(ii) receive contemporaneously with any referral of

cargo transportation business from any new third party

transportation company not located in the U.S. (hereinafter

referred to as a Foreign Freight Forwarder), or at least

once a year from any existing Foreign Freight Forwarder for

which Proway and Capital Freight has transported cargo in

the past to the United States, written confirmation that the

Foreign Freight Forwarder is not providing non-vessel

10

operating

common

carrier

(NVOCC)

services,

or

11

representing to the public or its customers that it is

12

providing NVOCC services, as that term is defined by 46

13

CFR 515.2(l); or

14

(ii) if Proway and Capital Freight knows through its

15

own investigation or knowledge, or after receiving written

16

confirmation from a Foreign Freight Forwarder as provided

17

in subsection (i) above, that the Foreign Freight Forwarder

18

is providing NVOCC services to the United States or

19

representing to the public or its customers that it is

20

providing NVOCC services, as that term is defined by 46

21

CFR 515.2(l), that Proway and Capital Freight not accept

22

cargo for transportation to the United States from the

23

Foreign Freight Forwarder unless Proway and Capital

24

Freight has confirmed the Foreign Freight Forwarder is also

25

registered and bonded through the FMC as a foreign

26

NVOCC,
and;

27
28

Nike v. KAL America, Inc.: Complaint

- 19 -

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 20 of 47 Page ID #:20

b) Proway and Capital Freight shall verify the authenticity and

source of any documentation, including shipping instructions, for

any cargo for which it provides transportation services to or from

the United States, prior to providing such transportation services

by one of the three procedures identified in subsections (i) through

(iii) below:

(i) Proway and Capital Freight shall communicate

directly with the identified shipper of the goods, as that

shipper is identified on the shipping documentation or

10

shipping instructions (hereinafter Shipper), by telephone,

11

facsimile or email. Proway and Capital Freight shall

12

communicate with the Shipper via a telephone number,

13

facsimile number, or email address publically associated

14

with the Shipper in any government database or publication,

15

or at a website where the second level domain of the

16

website domain name incorporates the Shippers corporate

17

name and the website is on its face operated by the Shipper,

18

or as provided by any publically listed and generally

19

recognized as reliable Internet database (hereinafter referred

20

to as a Reliable Contact Point). Proway and Capital

21

Freight shall, when communicating with the Shipper,

22

confirm that the information contained in the shipping

23

instructions or shipping documentation is accurate and

24

truthful before providing transportation or importation

25

services. As a material part of this confirmation process,

26

Proway and Capital Freight shall make a written record of

27

the communication. If made by telephone, Proway and

28

Nike v. KAL America, Inc.: Complaint

- 20 -

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 21 of 47 Page ID #:21

Capital Freight shall note the date, telephone number called,

the person or persons contacted at the Shipper, their position

with the Shipper, and, if the Shipper questioned any of the

information contained in the shipping instructions or

shipping documents, Proway and Capital Freight shall note

what steps it took to further confirm this information. If the

direct communication occurs via email or facsimile, Proway

and Capital Freight will ensure that a written record is made

of

the

confirmation

containing

the

same

material

10

information as if the confirmation was made via telephone.

11

Additionally, Proway and Capital Freight shall maintain a

12

record of the source of the Reliable Contact Point;

13

or

14

(ii)

Proway and Capital Freight shall communicate

15

directly with the identified Ultimate Consignee of the

16

goods, as that Ultimate Consignee is identified on the

17

shipping documentation or shipping instructions, so long as

18

the identified Ultimate Consignee does not appear on the

19

face of the shipping instructions or shipping documents to

20

be a freight forwarder, receiving agent or other third party

21

not intended to be ultimate recipient of the subject goods.

22

Such communication shall occur by telephone, facsimile or

23

email, and the contact information must be obtained via a

24

Reliable Contact Point. As a material part of this

25

confirmation process, Proway and Capital Freight shall

26

make a written record of the communication. If made by

27

telephone, Proway and Capital Freight shall note the date,

28

Nike v. KAL America, Inc.: Complaint

- 21 -

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 22 of 47 Page ID #:22

telephone number called, the person or persons contacted at

the Ultimate Consignee, their position with the Ultimate

Consignee, and, if the Ultimate Consignee questioned any

of the information contained in the shipping instructions or

shipping documents, Proway and Capital Freight shall note

what steps it took to further confirm this information. If the

direct communication occurs via email or facsimile, Proway

and Capital Freight shall ensure that a written record is

made of the communication containing the same material

10

information as if the communication was made via

11

telephone. Additionally, Proway and Capital Freight shall

12

maintain a record of the source of the Reliable Contact

13

Point;

14

or

15

(iii) Proway and Capital Freight shall receive written

16

verification from any Foreign Freight Forwarder or

17

NVOCC (collectively referred to as Referring Party)

18

which refers it any shipment for transportation, or is passing

19

on such a shipment to Proway and Capital Freight as a co-

20

loaded shipment, confirming or attesting to the following

21

information:
(A)

22

the Referring Party represents that it has

23

had direct contact with the Shipper or Ultimate

24

Consignee and verified the source and authenticity of

25

the

26

documentation through the requirements of sections

27

paragraphs 8. b)(i) and (ii) of this Injunction; and

28

shipping

Nike v. KAL America, Inc.: Complaint

- 22 -

instructions

and/or

shipping

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 23 of 47 Page ID #:23

(B)

the Referring Party has verified that any

cargo container identified on or in any shipping

instructions and/or shipping documents related to the

transportation of the cargo was in fact delivered and

picked up from the location associated with the

Shipper in such shipping instructions or shipping

documents; and

(C)

the Referring Party provides Proway and

Capital Freight with its full address, telephone

10

number, facsimile number, email address, (which

11

information

12

independently

13

publically available databases on the Internet), its

14

government identification number, and a copy of its

15

business and/or

16

Copies of such licenses or registrations shall be

17

maintained by Proway and Capital Freight so long as

18

it receives shipments from each Referring Party; and

(D)

19

Proway
verifies

and
through

Capital

Freight

government

or

NVOCC license or registration.

the Referring Party agrees in writing to

20

indemnify any third parties harmed by Proway and

21

Capital Freights transportation, or assisting in the

22

transportation, of cargo which cargo contains

23

Unauthorized Goods and was referred by the

24

Referring Party to Proway and Capital Freight.

and

25
26

c)

27

five years from the date of transportation all records related to its

28

Proway and Capital Freight shall maintain for a period of

Nike v. KAL America, Inc.: Complaint

- 23 -

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 24 of 47 Page ID #:24

transportation and/or importation, or the assisting in the

transportation or importation, of goods to or from the United

States via ocean carrier, including but not limited to shipping

instructions, bills of lading, arrival notices, packing lists,

commercial invoices, invoices or bills for transportation or

importation services rendered to or from Proway and Capital

Freight, entry documents, export documents, AMS entry

information, ISF information, CBP or FMC inquiries, customer

identity verification information, customer banking information

10

used for any payment, copies of any government identifications

11

reviewed or relied upon, powers of attorney, and relevant

12

communications with any relevant shipper, consignee, VOCC,

13

NVOCC, freight forwarder or other interested party (collectively

14

referred to as Proway and Capital Freights Shipping File);

and

15
16

d)

17

Nike, or by any U.S. or Chinese government agency, that any

18

Referring Party has previously transmitted false or misleading

19

transportation documentation involving the transportation or

20

importation of Unauthorized Goods into the United States

21

(hereinafter referred to as an Identified Referring Party), Proway

22

and Capital Freight shall cease accepting any further cargo

23

referrals or co-loading with said Identified Referring Party within

24

twenty (20) days of receiving such notice.

25

B.

If Proway and Capital Freight is put on written notice by

Directing such other relief as the Court may deem appropriate to prevent

26

any erroneous impression among the trade and/or public that any product at issue in

27

this case that has been offered for sale, sold or otherwise circulated or promoted by

28

Nike v. KAL America, Inc.: Complaint

- 24 -

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 25 of 47 Page ID #:25

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 26 of 47 Page ID #:26

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 27 of 47 Page ID #:27

EXHIBIT A

EXHIBIT A

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EXHIBIT A PAGE 27

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EXHIBIT A PAGE 28

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EXHIBIT A PAGE 29

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EXHIBIT A PAGE 30

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EXHIBIT A PAGE 31

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EXHIBIT A PAGE 32

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EXHIBIT A PAGE 33

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EXHIBIT A PAGE 34

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 36 of 47 Page ID #:36

EXHIBIT B

EXHIBIT B

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 37 of 47 Page ID #:37

EXHIBIT B PAGE 35

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 38 of 47 Page ID #:38

EXHIBIT B PAGE 36

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 39 of 47 Page ID #:39

EXHIBIT C

EXHIBIT C

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 40 of 47 Page ID #:40

EXHIBIT C PAGE 37

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 41 of 47 Page ID #:41

EXHIBIT D

EXHIBIT D

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 42 of 47 Page ID #:42

EXHIBIT D PAGE 38

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 43 of 47 Page ID #:43

EXHIBIT E

EXHIBIT E

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 44 of 47 Page ID #:44

EXHIBIT E PAGE 39

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 45 of 47 Page ID #:45

EXHIBIT E PAGE 40

Case 2:15-cv-05269 Document 1 Filed 07/14/15 Page 46 of 47 Page ID #:46

EXHIBIT F

EXHIBIT F

5 29/
5/
9 2015

Validating the Pow

o 1er of
oFiled
Attorney07/14/15
At
| U.S. CustomsPage
and Border
o ection
Case 2:15-cv-05269 Document
47Prot
of
47 Page ID #:47

Official website of the Department of Homeland Security

U.S. Customs and

Border Protection

EXHIBIT F PAGE 41
htt
t p://
//www.cbp.gov
o /t
/ rade/
e broker/v
/ alidating-poa

1/1