New U.S. Court Ruling to Make Overseas Counterfeit Lawsuits More Difficult

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…