Schedule A Litigation Is Not the Problem: Online Counterfeiting Is

Online counterfeiting has become ubiquitous. A seller located anywhere in the world can create a digital storefront, copy a brand owner’s photographs and product descriptions, adopt a business name that reveals nothing, and begin selling into the United States before the brand owner even knows the account exists. If the seller is discovered and enforcement begins, the listing disappears, the money moves out of the country and beyond the practical reach of the court system, and a new account surfaces under a different name. Then the entire process repeats.

The rinse-and-repeat nature of online counterfeiting goes well beyond “whack-a-mole.” At least in the game of whack-a-mole, the mole receives some lumps.

Every defendant is entitled to due process—even anonymous online sellers. The problem is that the legal system, which is built around stable, identifiable defendants being reachable by the court system, is being weaponized by sellers who conceal their identities, operate through disposable storefronts, transfer proceeds quickly, and disappear the moment meaningful enforcement begins. If procedure refuses to account for that commercial reality, the sellers receive no punishment whatsoever while brand owners and the public suffer.

And this issue goes beyond the impact of counterfeiting harm to brands, or even harm to consumers who unwittingly purchase dangerous products. According to the Department of Homeland Security report on combating trafficking in counterfeit and pirated goods, law enforcement officials have uncovered links between the sale of counterfeit goods and transnational organized crime and terror networks. These criminal organizations often use coerced and child labor to manufacture counterfeit goods. In some cases, proceeds from counterfeit sales have been found to fund terrorists and dictatorships throughout the world. Why? Because even when counterfeiters are caught, the penalties are often small, and counterfeiters have become exceptionally good at operating on the edge and safely outside the reach of law enforcement and the judicial process.

Thankfully, there are procedures that satisfy U.S. notions of fair play and justice while still providing brand owners the opportunity to defend themselves against predatory online behavior by malicious actors.

The Law Should Not Reward Engineered Evasion

The legal system has historically not been nimble enough to do much more than explain to brand owners and the public that there is little, or nothing, that can be done to stop online counterfeiting. Traditional enforcement assumes that a defendant can be identified, located, served, and held in place long enough for a court to decide the case. Those assumptions collapse when the defendant is an anonymous foreign seller operating through a marketplace account designed to be disposable.

What is known as Schedule A litigation developed in response to the reality that traditional enforcement is often ineffective against alleged online counterfeiting by anonymous sellers whose marketplace accounts are designed to disappear. In a Schedule A case, a brand owner files one action against multiple online sellers, often identified initially only by storefront names and listed on a schedule attached to the complaint. The objective is straightforward: stop ongoing infringement, preserve evidence, identify the people, accounts and assets tied to the unlawful sales, and prevent any eventual judgment from becoming worthless before the litigation has truly begun. This preservation of the status quo ensures fairness to both the plaintiff and defendant.

Critics of Schedule A generally make three arguments: these cases deny defendants due process, multiple defendants are improperly joined, and the procedure can be abused. Those are not different formulations of the same objection. Due process is a constitutional question. Joinder is a procedural question governed by the Federal Rules of Civil Procedure. Potential abuse is a case-management concern. Each deserves serious consideration, but each must be analyzed on its own terms.

Every Defendant Is Entitled to Due Process

Obviously, every defendant is entitled to due process. Full stop. Due process is a constitutional guarantee, not a prize reserved for sympathetic litigants or parties with a legitimate defense on the merits. Anonymity is not a waiver of constitutional rights, and suspected illegality does not eliminate the constitutional prerequisite of fairness to all litigants.

But due process is not a mechanical command that requires courts follow an identical sequence in every case regardless of the circumstances. What process is due depends on the interests at stake, the risk of an erroneous deprivation, the urgency of the threatened harm, and the safeguards built into the procedure. When a plaintiff presents strong, defendant-specific evidence that a seller has concealed its identity, operates through a disposable account and can move the proceeds beyond the court’s reach immediately upon receiving notice, that behavior does not eliminate entitlement to due process. It does, however, fundamentally inform the due process calculus.

When specific evidence shows that advance notice will cause the storefront, records or proceeds to disappear, insisting on notice before any temporary restraint can and does make the eventual hearing ceremonial and without consequence. Certainly, the defendant must receive prompt notice and a meaningful opportunity to challenge any temporary order, and the initial relief must be narrow and supported by evidence considered by a neutral judge. But temporary orders that preserve the status quo are not inferior process. These types of temporary orders are routinely given in appropriate cases and have long been held to be constitutionally acceptable.

And, yes, Schedule A litigation can be abused if unpoliced by courts, just like every other type of litigation. A defendant is not proven to be a counterfeiter merely because a brand owner places a storefront name on a schedule. The brand owner must make the required factual and legal showing as to the defendants and relief at issue. But it disingenuous to treat hypothetical abuse by a brand owner as a reason to eliminate a constitutionally tested and approved remedy even when the evidence of counterfeiting, evasion and imminent dissipation is overwhelming. The answer to possible abuse is exacting judicial review, narrow orders, prompt hearings and serious consequences for plaintiffs who mislead the court—not guaranteed impunity for actual wrongdoers.

Joinder Is a Separate Procedural Question

Some Schedule A critics also argue for what they describe as a cleaner model: one defendant, one lawsuit. That argument must be analyzed for what it is. It is a joinder argument, not a constitutional command imposed by due process.

Federal Rules permit multiple defendants to be joined only when the asserted right to relief arises out of the same transaction, occurrence or series of transactions or occurrences, and a question of law or fact common to all defendants will arise. The mere fact that multiple sellers allegedly infringed the same intellectual property does not necessarily satisfy joinder requirements. Similarly, the fact that the same rights are being infringed does not preclude joinder either. Courts must scrutinize the pleaded facts and supporting evidence to determine whether the claims are tied to the same transaction or series, including evidence such as coordinated conduct, common control or other meaningful relationships among the sellers. When the requirements are not satisfied, courts have the authority to drop parties or sever claims.

The very existence of joinder rules means “one seller, one lawsuit” cannot possibly be the proper categorical rule. The Federal Rules themselves contemplate multi-defendant litigation when joinder is appropriate, and severance when it is not. If the evidence supports joinder, forcing a brand owner to file separate cases against hundreds of related seller aliases would make enforcement prohibitively slow, expensive, and entirely unnecessary under the rules. And “one seller, one lawsuit” does absolutely nothing to address the core issue of unfairness suffered by brand owners—by the time one seller is identified and served, the listing will be gone, the proceeds moved beyond practical reach or the court and the counterfeiter already operating under a new fictitious name. And sadly, we do not need to hypothesis about this happening, that is precisely the lived experience of brand owners today.

Of course, the burden of a categorical one-defendant rule would not fall only on brand owners. Federal courts would receive dozens or hundreds of complaints involving the same plaintiff, the same intellectual property, substantially similar products, the same marketplace environment, overlapping evidence and recurring requests for emergency relief. When the Federal Rules permit joinder, that fragmentation is commercially and judicially absurd.

Due Process Does Not Require Judicial Helplessness

Once joinder is placed in its proper doctrinal lane, the due process question becomes clearer. Courts do not have to choose between constitutionally adequate process and effective intellectual property enforcement. Due process is the framework through which extraordinary relief is tested.

Brand owners seeking extraordinary relief should bear an extraordinary burden. They should be required to establish why the forum has a meaningful connection to the dispute, why alternative service is necessary and legally proper, why advance notice would create a serious risk of evasion, why the requested relief is authorized, and why any restraint is properly limited. The strength of the evidence matters. So does the defendant’s opportunity to appear promptly and challenge the order.

It is worth remembering what a properly supported temporary order does. It does not finally adjudicate infringement, award damages or declare every dollar in an account recoverable. It calls a time-out and preserves the status quo for a limited period. If a restrained defendant appears, the court can, should and will hold a fair hearing. If the evidence does not support the order, the court should modify or dissolve it. And if a brand owner abused the process or misled the court, the full weight of the judicial system should come crashing down.

Simply stated: every defendant is entitled to due process, including defendants who operate anonymously online. But due process does not require courts to ignore evidence that anonymity, disposable accounts and rapid transfers are being used to defeat adjudication. It requires procedures calibrated to that risk while preserving prompt notice, meaningful review and a genuine opportunity to be heard. Joinder is a separate question governed by the Federal Rules and should be decided separately.

Protecting anonymous online sellers from well-supported and constitutionally acceptable temporary relief based on a fear of some hypothetical, potential, future abuse is inappropriate, unnecessary, and precisely the type of system paralysis that sophisticated counterfeiters depend on to perpetrate their fraud. Courts can and must do better.