A SAD scheme (where SAD stands for Schedule "A" Defendant) is a form of intellectual property enforcement in the United States. SAD schemes often target online merchants outside the U.S., particularly those in China.[1][2][3] This scheme, frequently used by trademark owners, involves intellectual property rightsowners filing a lawsuit against multiple online merchants using a sealed complaint that does not publicly identify the defendants. The rightsowners then seek an ex-parte temporary restraining order (TRO) directing the online marketplaces to freeze the defendants’ accounts and funds.[4][5][6] This entire process occurs without the defendants’ knowledge, denying them the opportunity to present their side of the story. The marketplace account freeze often pressures defendants into settling with the rightsowner quickly, rather than engaging in an expensive legal battle.[7]
A SAD scheme provides rightsowners with a low-cost option to mass-enforce their intellectual property against large groups of online merchants, particularly those outside the U.S.[4][8] However, this tactic is controversial, as it is highly error-prone[4] and can have significant and long-term adverse consequences for innocent merchants.[7] Moreover, it exploits gaps in the legal system’s efforts to ensure due process, raising questions about its fairness and effectiveness.[4][9]
^Yang, Zevi (June 20, 2023). "The counterfeit lawsuits that scoop up hundreds of Chinese Amazon sellers at once". MIT Technology Review. Archived from the original on 24 January 2024. Retrieved 18 March 2024.
^Yang, Zevi (June 21, 2023). "The US city that scares Chinese Amazon sellers". MIT Technology Review. Archived from the original on 8 February 2024. Retrieved 18 March 2024.
^Marathe, Isha (July 14, 2023). "Are Some Plaintiffs Firms Becoming 'Trademark Trolls'?". Law.com. ALM Global, LLC. Archived from the original on 18 March 2024. Retrieved 18 March 2024.
^ abcdGoldman, Eric (November 20, 2023). "A Sad Scheme of Abusive Intellectual Property Litigation". Columbia Law Review. 123 (7): 183–207. Archived from the original on 25 February 2024. Retrieved 18 March 2024.
^Burstein, Sarah (January 28, 2024). "The Counterfeit Sham". Harvard Law Review. 138. Archived from the original on 18 March 2024. Retrieved 18 March 2024.
^Goldman, Eric (September 10, 2023). "Schedule A (SAD Scheme) Plaintiff Sanctioned for "Fraud on the Court"–Xped v. Respect the Look". Technology & Marketing Law Blog. Archived from the original on 18 March 2024. Retrieved 18 March 2024.
^ abSteiner, Ina (July 16, 2023). "Small Sellers Are Getting Swept Up as Brands 'Weaponize' the Legal System". EcommerceBytes. Steiner Associates, LLC. Archived from the original on 14 January 2024. Retrieved 18 March 2024.
^Goldman, Eric (2023). "Ning Zhang interview with Eric Goldman regarding Schedule A Defendants". Historical and Topical Legal Documents. Santa Clara Law Digital Commons. Archived from the original on 22 June 2023. Retrieved 18 March 2024.
^Goldman, Eric (October 5, 2023). "In a SAD Scheme Case, Court Rejects Injunction Over "Emoji" Trademark". Technology & Marketing Law Blog. Archived from the original on 18 March 2024. Retrieved 18 March 2024.
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