Does TRO cause funds to be frozen and stores to be closed? How can it be resolved?
Does TRO freeze funds and close stores? How to resolve?
Since 2017, some American lawyers have maliciously sued some Chinese merchants on American e-commerce platforms such as Amazon, AliExpress, eBay, Wish, and independent stores, issuing Temporary Restraining Orders (TRO), freezing e-commerce platform accounts, and using relevant American laws to circumvent the delivery rules of the Hague Service Convention in order to obtain a default judgment without the full knowledge of the merchants. This allows them to deduct store funds and reap the hard-earned money of cross-border e-commerce sellers.
0 1 What is a TRO?
TRO: The full name is Temporary Restraining Order, which is a temporary injunction. TRO is an emergency temporary restraining order that the right holder can obtain from a US court under the US Federal Civil Procedure Law without notifying any other party. Because the right holder shows an urgent need to protect its intellectual property, it needs to immediately stop the infringing acts of others, freeze the assets of the suspected infringer, and quickly obtain relevant documents. To obtain this relief, the plaintiff must prove in an affidavit that their rights will suffer “direct and irreparable injury, loss or damage,” unless the other party has obtained a court order. These affidavits may include documents related to the plaintiff’s intellectual property, test results, suspected infringement cases, and descriptions of the claimed “irreparable damage,” such as customer and reputation losses.
0 2 So what impact does the TRO have on us? TROs usually prohibit defendants from engaging in any infringing acts, including the sale or promotion of allegedly infringing goods; destroying records related to the plaintiff’s claim, and transferring financial assets that can be used to determine the case. TROs usually also prevent third parties (such as Amazon and other platforms) from providing services to the accused infringers, and may cause asset freezes, thereby preventing accounts related to suspected infringers (even if the accounts are not within the US) from transferring funds. Finally, TROs usually require defendants and third-party platforms to provide documents related to the plaintiff’s claim (such as contact information, bank account records, and sales records), even if they are located outside the United States.
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0 3 What should be done after receiving a TRO?
After receiving a TRO, the seller should not blindly follow or trust unverified information or rumors online. Ignoring the TRO may result in the court viewing the defendant as guilty for not responding to the court’s order or attending the court session. This may lead to a heavier sentence and higher compensation, making the situation more difficult to control. The correct approach is to seek legal advice from a lawyer who is familiar with the laws applicable in the jurisdiction where the TRO was issued and actively respond to and resolve the issue. For example, if you receive a TRO issued by a federal judge in the state of Illinois, you need to consult a lawyer who is licensed to practice in Illinois.
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