My New Article on Abusive “Schedule A” IP Lawsuits Will Likely Leave You Angry

March 9, 2023 · by · in Copyright, E-Commerce, Patents, Trademark

I’m pleased to share a draft of a new paper, “A SAD New Category of Abusive Intellectual Property Litigation.” The abstract:

This paper 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 as a way to target Chinese online marketplace vendors. The SAD Scheme capitalizes on weak spots in the Federal Rules of Civil Procedure, judicial deference to IP rightsowners, and online marketplaces’ desire to reduce their liability exposure. With substantial assistance from judges, rightsowners use these dynamics to extract settlements from online vendors 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’s affected hundreds of thousands of defendants, and how it may have cost the federal courts a quarter-billion dollars. The paper concludes with some ideas about ways to curb the system.

Readers’ most common reaction to the paper is outrage/anger about how the system is being gamed in a way that undermines judicial integrity–in some cases, with the judges’ help. Have a stress reliever toy handy when you read this.

This paper traces its origins to my 2021 expert declaration in an Emojico case. I was disturbed by the practices I saw in the case; and I couldn’t believe that I hadn’t seen much chatter about the cases despite their high volume and obvious problems. I’m hoping that shining the spotlight on the practices will prompt a much-needed reevaluation of the scheme.

To that end, I am giving a couple of public talks on the paper:

I will turn in my edit-ready version to the journal in a couple months, so I have time to incorporate comments. I would welcome yours.