SAD Scheme-Style Case Falls Apart When the Defendant Appears in Court—King Spider v. Pandabuy

The parties’ names make this case sound more like a Hollywood blockbuster movie than a SAD Scheme-like case. This suit isn’t a classic SAD Scheme case because the plaintiffs went after the marketplace, not the merchants.

This case involves the Pandabuy service, “an online shopping platform that allows consumers to purchase goods from third-party Chinese e-commerce platforms based in China which do not ship directly to the United States.” According to Pandabuy’s website, “All the searched products are from third party platforms, Pandabuy only provides information search, agent shopping and shipping services. Pandabuy does not authenticate or evaluate the quality or authenticity of the products.”

The plaintiffs got an ex parte TRO against Pandabuy barring it from selling counterfeit items and ordering an asset freeze of nearly $17M. Pandabuy initially no-showed in the case, so the court converted the TRO to a preliminary injunction. Pandabuy eventually showed up in court and explained how it “operates more like a passive facilitator than a seller or manufacturer.” This additional context prompted the court to dissolve the injunction.

Trademark. Citing the Printify case, the court says Pandabuy doesn’t use the plaintiffs’ trademarks in commerce because it is a passive facilitator. Pandabuy “appears to only act as a valet between third-party e-commerce websites and the end user. Third-party merchants, not Pandabuy, generate, own, and manage any allegedly infringing listings…. Pandabuy plays no role in the ‘creation’ or ‘manufacture’ of any offending goods.” The court distinguishes Atari v. Redbubble and the Sunfrog cases because the defendants in those cases “exhibited sufficiently more indicia of control—and presented more opportunity for consumer confusion by using their own tags and labels.”

Copyright. Due to Pandabuy’s technical architecture, “the images shown on Pandabuy’s website are generated solely based on user queries. A consumer copies or creates an image which the consumer then pastes into a search feature on the Pandabuy website. A page then appears showing the same or similar images identified online, in thumbnail form.” The court says this is analogous to Google Image search results which “result entirely from algorithmic and user driven behavior.” The court thus says that Pandabuy doesn’t “display” the images, which defeats the copyright claim.

SAD Scheme Cases Suck. Whether or not you agree with the court regarding the legal conclusions (which were pretty generous to the defense), the main takeaway is that the court reversed its earlier rulings when it actually heard the defendant’s side of the story. In other words, as usual, ex parte and uncontested judicial proceedings are error-prone and errors can have substantial consequences (i.e., the $17M asset freeze). These mistakes would not have occurred if the case had actually followed due process, instead of a backdoor ex parte TRO. Avoiding avoidable errors is the point of requiring due process in the first place.

Case Citation: King Spider LLC v. Panda (Hong Kong) Technology Co., 2025 U.S. Dist. LEXIS 7440 (S.D.N.Y. Jan. 14, 2025). King Spider appealed to the Second Circuit, but the court declined to reinstate the preliminary injunction pending the appeal. King Spider LLC v. Panda (Hong Kong) Tech. Co., 2025 U.S. Dist. LEXIS 10528 (S.D.N.Y. Jan. 21, 2025). While pending with the Second Circuit, the case apparently settled in late March.

Prior Blog Posts on the SAD Scheme

• Serial Copyright Plaintiff Lacks Standing to Enforce Third-Party Copyrights–Viral DRM v 7News
• Another N.D. Ill. Judge Balks at SAD Scheme Joinder–Zaful v. Schedule A Defendants
• Judge Rejects SAD Scheme Joinder–Toyota v. Schedule A Defendants
• Another Judge Balks at SAD Scheme Joinder–Xie v. Annex A
• Will Judges Become More Skeptical of Joinder in SAD Scheme Cases?–Dongguan Juyuan v. Schedule A
• SAD Scheme Leads to Another Massively Disproportionate Asset Freeze–Powell v. Schedule A
• Misjoinder Dooms SAD Scheme Patent Case–Wang v. Schedule A Defendants
• Judge Hammers SEC for Lying to Get an Ex Parte TRO–SEC v. Digital Licensing
• Judge Reconsiders SAD Scheme Ruling Against Online Marketplaces–Squishmallows v. Alibaba
• N.D. Cal. Judge Pushes Back on Copyright SAD Scheme Cases–Viral DRM v. YouTube Schedule A Defendants
• A Judge Enumerates a SAD Scheme Plaintiff’s Multiple Abuses, But Still Won’t Award Sanctions–Jiangsu Huari Webbing Leather v. Schedule A Defendants
• Why Online Marketplaces Don’t Do More to Combat the SAD Scheme–Squishmallows v. Alibaba
• SAD Scheme Cases Are Always Troubling–Betty’s Best v. Schedule A Defendants 
• Judge Pushes Back on SAD Scheme Sealing Requests
• Roblox Sanctioned for SAD Scheme Abuse–Roblox v. Schedule A Defendants
• Now Available: the Published Version of My SAD Scheme Article
• 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