District Court Stops Non-Vessel Carrier From Shipping Nike Goods After Trademark Infringement Case

Two companies that arrange for the shipment of goods with vessel operating carriers, Shine Shipping and Shine International (Shine), will no longer be able to import, export, transport, offer for sale, sell or assist any such activity, for any goods bearing Nike trademarks, the U.S. District Court for the Southern District of New York said. Wrapping up a trademark infringement case, the district court released the terms of the stipulated permanent injunction and final order against Shine, including orders to verify every shipment to the U.S. with either the foreign shipper, importer or foreign freight forwarder (Nike v. B&H Customs Services, S.D.N.Y. #20-01214).

Shine Shipping and Shine International are foreign non-vessel operating common carriers that were contacted by a Chinese company I/O Interconnect to arrange five shipments from China to the U.S. in 2017-18. The shipments were represented to Shine to be for a Hong Kong-based firm called IO Innovative Electronic Co. For these five shipments, the house bill of lading listed Zhong Wang Lighting Factory as the Chinese shipper and Artiva as the U.S. consignee receiving the shipments. The HBL also listed the contents of the shipments as lamps, not the counterfeit Nike shoes actually in each shipment.

For all five shipments, Shine tapped Hana Freight as the consignee to receive the shipments. For each shipment, Hana used B&H Customs Brokers to act as its broker, and also worked with Tom Lee, the putative president of Artiva. Hana then received a customs power of attorney from Lee for the brokers to use, which was returned in the name of Artiva USA Inc. B&H then filed customs paperwork for the shipments using the name E-Ko Image, Inc., doing business as Artiva ("E-Ko"), and not Artiva USA.

Artiva had been an operating name of the California company E-Ko Image, which imports lamps and furniture. But a review of California’s online corporate records would have revealed that E-Ko forfeited the name Artiva two years earlier, in 2015, and suspended Artiva’s operations. Corporate records didn't mention any Tom Lee.

CBP seized the fifth shipment in November 2019 after finding out that it contained counterfeit Nike shoes. Shine said this was the first time it had heard that the five shipments contained illegal products. Nike then brought a case in federal court against nearly every party involved, landing settlements with B&H Customs in May 2020 (see 2005130023) and Hana in September 2020 (see 2009300061). Nike then turned its attention to Shine, alleging that the non-vessel carrier directly engaged in trademark infringement under the Lanham Act. In October 2021, the court found Shine to not be directly liable for the counterfeit footwear (see 2110040069).

This led to the final order against Shine Shipping and Shine International, precluding either from ever willingly importing, exporting, transporting or aiding in the transport of any Nike goods. The injunction also prohibited the company from providing transportation services for any counterfeit goods or filing, or causing to be filed, any false information with CBP's ACE system.

The injunction further stipulated that Shine will verify the authenticity and source of any documentation for any cargo it ships to the U.S. by one of three procedures: direct communication with the identified shipper of the goods, direct communication with the identified importer of record or written verification from any foreign freight forwarder. Shine also will maintain all records relating to its transportation services for five years.