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Schedule A lawsuits can be expensive to defend against and disruptive to business operations. They may even destroy an online retailer through significant legal damages and costs that are simply too great to bear. If you are an online retailer and have been accused of selling counterfeit products or those that otherwise infringe upon someone’s intellectual property rights, the best step you can take is to retain skilled counsel. That’s where The Keleher Appellate Law Group comes in.
Small Businesses Increasingly Targeted
The Northern District of Illinois is the epicenter of Schedule A lawsuits, so named due to the lengthy schedule of defendants that is attached to these complaints. Big companies – many of which are household names – file these lawsuits against online retailers who operate on eBay, Amazon, and other platforms. Contending that the retailers have sold counterfeit or trademark-infringing products, they seek compensation and restraining orders that prevent further selling.
The platforms themselves typically respond by freezing the accounts of retailers and suspending their activity. Retailers are forced to fight back by asking for accounts to be unfrozen, for temporary restraining orders to be lifted, and for access to their own money. In some cases the allegations are baseless or flimsy because plaintiffs don’t take the time needed to determine whether the defendant has done something wrong. This causes many small retailers to be swept up in costly and needless litigation. Although they may eventually prevail on the merits of the claims made against them, the price is often their business and livelihood.
How To Protect Your Online Business
Perhaps the most stressful aspect of Schedule A litigation for small businesses is that they can be wiped out even if they did nothing wrong. However, there are steps that you can take to protect yourself, your ability to conduct business online, and your financial security. You can minimize the risk of a lawsuit by:
Securing licenses: Selling items that are protected by someone else’s intellectual property rights generally requires a license. Although obtaining a license can take time and money, it should be viewed as an investment to reduce the chances of being charged with intellectual property infringement. We can walk you through the necessary channels for securing a license.
Establish compliance mechanisms: Depending on the size of your online business, there may be various individuals involved in deciding what gets posted for sale on eBay or other websites. Before deciding which products to sell, you need to create strong internal policies and procedures to ensure that items that are counterfeit or infringe upon someone’s rights are not marketed. We understand intellectual property law and how parties can avoid actions that violate the protections of others.
Register your business: If you conduct business from abroad, you should consider registering your business in the United States. Registering your business with a state’s secretary of state or other office gives you legitimacy. It allows you to designate a registered agent who can receive legal papers on your behalf. While this may not prevent a lawsuit, it can force a plaintiff to take the appropriate steps to notify you of legal action so your rights are protected.
Do your research: There are plenty of counterfeits, misappropriated trademarks, and other problematic items that are being sold in online marketplaces all over the world. Your business needs to be able to recognize these products so you don’t end up getting in trouble for selling them. Conduct diligent online research to determine which items in your inventory could cause you legal trouble.
The Most Important Step: Hire an Experienced Intellectual Property Lawyer
Arguably the most important thing you can do before being named in a Schedule A lawsuit is to retain an intellectual property law firm. We can review your existing business operations and help you with the above and other steps that can mitigate the risk of a financially devastating complaint being filed against you. However, if you are sued, we are ready to defend you. Reach out to The Keleher Appellate Law Group today.