Defendant’s “Consignment Sale” Violates Preliminary Injunction

The court granted in part plaintiff's renewed motion for a finding that defendant was in contempt of a preliminary injunction and sanctioned defendant $860,600 plus attorneys' fees. "[Defendant's CEO] emailed a copy of the preliminary injunction order to [a third party] shortly after it issued. [The CEO] and [third party] are close friends and business associates. They agreed that [defendant] would transfer around 4,000 keyboards to [the third party] before the injunction took effect, and [the third party] would only pay [defendant] for the keyboards when [he] sold them to third parties. . . . [Defendant] argues that these sales did not violate the preliminary injunction because its 'consignment' sales to [the third party] occurred before the injunction took effect and [his] sales to third parties were outside of [defendant's] control. [Defendant] is wrong. . . . [Defendant] did not sell the enjoined keyboards to [the third party] until [the third party] paid [plaintiff] for the keyboards, which was after the preliminary injunction took effect. . . . Indeed, [plaintiff] reclaimed 1,800 keyboards which [the third party] had been unable to sell, confirming that ownership of those keyboards never transferred to [the third party]."

BlackBerry Limited v. Typo Products LLC et al, 3-14-cv-00023 (CAND February 4, 2015, Order) (Orrick, J.)