U.S. Trademark Owners Turn to "Schedule A" as Blocking Bills Bypass Counterfeiting

Trademark owners are using “Schedule A” litigation to try and stop online counterfeit sellers by asking courts to require internet platforms and other online service providers to take accountability in  blocking or disrupting related accounts and networks. Many countries have established this legal framework, however, the United States has not, with Congress only considering  bills aimed at addressing online piracy, not counterfeiting.

Finnegan partner Naresh Kilaru told MLex that, "The goal of these cases really is to put more of the burden on the platform itself." "There are certainly things that platforms can do to reduce infringement, and to prevent similar listings, but they don't ... unless they're sued."

The National Association for Stock Car Auto Racing LLC (NASCAR),  filed a complaint  in a North Carolina federal court, noting that it previously, and successfully, enforced its intellectual property rights "through traditional legal methods," but the "proliferation of anonymous online marketplaces" has made maintaining that status quo impossible.

Many countries have adopted site-blocking and dynamic-blocking frameworks that allow court orders to remain effective as infringers move to new websites, domains, or IP addresses. These systems can involve internet service providers, search engines, domain registrars, and other online intermediaries.

But Naresh cautioned that the comparison has limits, "dynamic injunction" as" just a term" and that relief in Schedule A litigation "has always been dynamic, in the sense that they were never limited to the specific named defendants."

Current congressional proposals focus on online copyright piracy, not trademark counterfeiting. Past efforts to address online counterfeiting, such as the SHOP SAFE Act, focused on increasing the responsibilities of e-commerce platforms and improving cooperation among marketplaces, search engines, payment providers, and brand owners, rather than creating new site-blocking remedies.

Congress could provide "a more robust regulatory framework," Naresh conceded, but in the end he said legislation alone is unlikely to eliminate the need for Schedule A litigation.

The injunction sought by NASCAR would require, "upon Plaintiff's written request," online marketplaces, social media platforms, search engines, web hosts and domain registrars to disable seller accounts, remove counterfeit listings and advertising, and de-indexing infringing storefronts from search results.

The relief would apply equally to "affiliated, related, or successor accounts," reflecting NASCAR's concern that sellers will evade enforcement by creating new online identities. 

"Inevitably," Naresh predicted, "there will be a successor account, and successor infringement."

But instead of "having to file suit again, all [NASCAR] would have to do is show that it's a successor account, whether to a registrar or website, and make an argument that this is covered," he continued. "Most of the time, you will see those orders are complied with."

NASCAR is thus largely following an established Schedule A model.

Naresh said he views the complaint as less "groundbreaking" and more "of an evolution," as plaintiffs move away from targeting individual counterfeit listings and toward the online infrastructure that enables them — with or without a legislative fix from Congress in place.

"You get some fairly broad relief," Naresh added, "not only against the defendants ... but against the instrumentalities of the infringement ... the websites and the domain names and the registrars."

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