DJI North America Obtains Injunction Against Hong Kong Dajiang Innovation Technology Co., Ltd. a/k/a DJI Innovations

After a three hour evidentiary hearing, on January 22, 2014, a Judge in Austin, Texas issued an Injunction against Hong Kong Dajiang Innovation Technology Co., Ltd., which is commonly known as DJI Innovations (“DJI China”), a company based in Shenzhen, China, to protect the business of Austin, Texas-based DJI North America, LLC and its minority owner.

Formed in July 2012, DJI North America was designed to serve as the exclusive North American branch of DJI China for sales of its high-end Unmanned Aerial Vehicles, which are used primarily for aerial photography. After North American sales sky-rocketed, DJI China embarked on a course of conduct designed to “misappropriate DJI North America’s business in total,” the Judge determined.

DJI North America and its minority owner brought claims against DJI China for Breach of Fiduciary Duty and Minority Owner Oppression. Upon hearing the evidence presented by both sides, the Judge ruled that DJI North America and its minority owner were likely to prevail at trial on their claims against DJI China.

The Court considered evidence that DJI China misappropriated all the revenue in DJI North America’s revenue account, sought to liquidate the assets of DJI North America on New Year’s Eve, and forced DJI North America to fire twenty employees immediately before Christmas without severance. The displaced employees of DJI North America filled the Austin courtroom for the duration of the hearing and appeared visibly joyful upon hearing the Judge’s ruling.

“This injunction is a necessary victory to protect what these folks worked so hard to create. We are hopeful that DJI China will respect this Judge’s sound decision,” attorney Brad Jackson commented.

In order to stop irreparable harm to DJI North America and its minority owner, the Judge ordered that DJI China must return DJI North America’s access to its bank accounts and its social media accounts. The Judge also ordered that DJI China cease and desist from routing sales around DJI North America to identified North American dealers, which violated the exclusivity agreement.

The Judge ruled that an Injunction was necessary because DJI China was placing DJI North America’s assets in China, out of the reach of the United States Court. The Judge found that DJI China not only placed money from DJI North America’s revenue account into a foreign bank account, but it also directed DJI North America’s customers to make payments directly to a Chinese bank account.

The Court refused DJI China’s request to dissolve a Temporary Restraining Order issued against DJI China on January 6, 2014.

A copy of the Injunction and Judge’s findings may be viewed here.

The Court set the final trial of the matter for August 11, 2014. DJI North America and its minority shareholder are represented by the Law Offices of Brad Jackson and the law firm of Powers Taylor LLP, respectively.