A landmark Second Circuit ruling in the “Baby Shark” counterfeit merchandise case has significantly increased the challenges for U.S. brands to sue China-based sellers in federal court, effectively limiting the use of email services when the Hague-Service Convention applies.
The decision means that rights holders now have to go through official, government-approved channels in China, a process that can take months, increasing costs and slowing enforcement as online counterfeiting continues to grow through 2026.
What the Baby Shark ruling actually says
The case, Smart Study Co., Ltd. v. Shenzhenshixindajixieyouxiangongsi, involved Smart Study, the South Korea‑based owner of the “Baby Shark” IP, suing dozens of China‑based storefronts accused of selling counterfeit merchandise on platforms like Amazon. After initially serving defendants by email and winning default judgments against many of them, Smart Study saw its claims against two China‑based sellers dismissed when they appeared and challenged service as invalid under the Hague-Service Convention.
On appeal, the Second Circuit Court of Appeals held that the Convention creates an exclusive framework for cross‑border service and that it does not permit email service on defendants in China, because China has formally objected to “postal channels” and other alternative methods under Article 10. The court rejected arguments that Federal Rule of Civil Procedure 4(f) or any “emergency” exception allows email in these circumstances, confirming that brands must instead route service through China’s Ministry of Justice or other treaty‑compliant mechanisms.
Why does this blow up Schedule A cases?
For years, rights holders, especially in fashion, beauty, and consumer goods, have relied on rapid‑fire “Schedule A” cases in districts like New York and Chicago to freeze assets and remove counterfeit listings. Those suits often bundled dozens or even hundreds of anonymous storefronts at once, served them primarily by email, and secured injunctions within days, giving brands a fast way to knock out suspicious sellers across Amazon, Alibaba, DHgate, Shein, and similar platforms.
The Baby Shark ruling cuts off that shortcut within the Second Circuit: when defendants are located in China, and their addresses are reasonably obtainable, plaintiffs can no longer rely on email as a stand‑alone method of service. In practice, that forces brands and their law firms to either:
- Commit to slower, more expensive Hague requests through Chinese authorities,
- Drop lower‑value defendants entirely because the cost of proper service outweighs the expected recovery.
The new reality for brands in 2026
As brands adjust, the ruling is likely to reshape anti‑counterfeiting strategy in at least three key ways.
- Less courtroom, more platform pressure: With fast U.S. injunctions harder to obtain against China‑based sellers, rights holders will lean more on marketplace tools like Amazon Brand Registry, eBay VeRO, Alibaba’s IPP systems, and policies at Temu, TikTok Shop, and Meta to push through takedowns.
- Bigger role for data and authentication: Brands are expected to invest more heavily in digital authentication, monitoring software, and data‑sharing with platforms to flag repeat offenders and patterns of abuse, rather than relying on courts to immediately freeze accounts via default judgments.
- More selective litigation: Lawsuits will likely focus on higher‑value or repeat counterfeiters where the time and cost of Hague service can be justified, while smaller storefronts may be handled through internal enforcement teams, platform notices, and negotiated settlements.
What this means for fashion and retail
For fashion houses and consumer brands selling into the United States, the decision signals that tech platforms — not courthouse emergency dockets — are becoming the true frontline of counterfeit control. Instead of relying on a single Schedule A filing to eliminate hundreds of listings overnight, companies will need stronger marketplace partnerships, clearer distribution strategies, and better education for shoppers on how to identify authentic goods.
At the same time, the ruling may encourage more nuanced, long‑term approaches to China‑based manufacturing and distribution, as brands balance the need to protect IP with the realities of international law, treaty obligations, and cross‑border e‑commerce. In other words, the “Baby Shark” case doesn’t end the fight against counterfeits — but it does redraw the battlefield, shifting power away from emergency federal court orders and toward platform governance, data, and diplomacy.
