I’m pleased to share the final published version of my article, “A SAD Scheme of Abusive Intellectual Property Litigation.” The article explains how IP rightsowners are twisting the rule of law to obtain ex parte TROs that prompt online marketplaces to freeze the defendants’ cash and accounts. These TROs produce substantially more benefits to rightsowners than the standard notice-and-takedown procedure that has dominated IP enforcement for the past quarter-century. As a result, the scheme purely benefits rightsowners and disadvantages everyone else. As I wrote in the newly revamped conclusion, “Reading this paper often leaves readers feeling confused, frustrated, and angry.”
If you read the earlier version of this paper, I added a bunch of new details to the article that you may find interesting. The paper also benefited from the thorough vetting by the journal editors.
Although the publication concludes my 2-year-long research project, I am still actively working to combat the SAD Scheme. I welcome your suggestions of how I can best direct my advocacy. You can help me by raising public awareness of the SAD Scheme. I still find that almost everyone–even sophisticated IP litigators–is not aware of the scheme and the problems it creates, despite the massive volume of defendants subjected to SAD Scheme claims.
This Piece describes a sophisticated but underreported system of mass-defendant intellectual property litigation called the “Schedule A Defendants Scheme” (the “SAD Scheme”), which occurs most frequently in the Northern District of Illinois and principally targets online merchants based in China. The SAD Scheme capitalizes on weak spots in the Federal Rules of Civil Procedure, judicial deference to IP rightsowners, and online marketplaces’ liability exposure. With substantial assistance from judges, rightsowners can use these dynamics to extract settlements from online merchants without satisfying basic procedural safeguards like serving the complaint and establishing personal jurisdiction over defendants. This paper explains the scheme, how it bypasses standard legal safeguards, how it has affected hundreds of thousands of merchants, and how it imposes substantial costs on online marketplaces, consumers, and the courts. The Piece concludes with some ideas about ways to curb the system.
Prior Blog Posts on the SAD Scheme
In a SAD Scheme Case, Court Rejects Injunction Over “Emoji” Trademark
Schedule A (SAD Scheme) Plaintiff Sanctioned for “Fraud on the Court”–Xped v. Respect the Look
My Comments to the USPTO About the SAD Scheme and Anticounterfeiting/Antipiracy Efforts
My New Article on Abusive “Schedule A” IP Lawsuits Will Likely Leave You Angry
If the Word “Emoji” is a Protectable Trademark, What Happens Next?–Emoji GmbH v. Schedule A Defendants
My Declaration Identifying Emoji Co. GmbH as a Possible Trademark Troll
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