Kendra Scott | Schedule A Infringement Lawsuit

Several Defendants have been named in the Kendra Scott trademark lawsuit. If you are one of them, you may be wondering why you are being sued for infringement. The brand has accused a group of e-commerce operators of selling trademark infringing goods to consumers in the United States. If you have received the legal complaint relaying the details of the case, please try not to panic. The first step you should consider taking is providing a response to the court. As of right now, the Defendants in this lawsuit are experiencing the damaging impact of a Temporary Restraining Order (TRO). The TRO can be detrimental to online sellers because it freezes the money in their e-commerce account(s). Sellers who do not respond to the lawsuit may end up forfeiting all of the frozen money in their account. That means the funds will go to Kendra Scott. 

What Schedule A Lawsuits Mean for Online Sellers

We would like to clarify just what a Schedule A lawsuit is and what it means for online sellers. Schedule A lawsuits have become somewhat of a recent trend in the intellectual property and e-commerce space. Major brands like Kendra Scott go forth with these lawsuits due to what they believe is rampant counterfeiting. Plaintiffs very specifically engage in the legal strategy of filing the suit against a number of sellers at one time. They hope the majority will not respond. When a seller does not respond to the lawsuit, the money in their frozen account is awarded to the Plaintiff. Defendants who do not properly address these suits can also face a Default Judgment. 

Many of the online sellers affected by Schedule A infringement lawsuits are based in China. The complaint even specifies this, “Defendants reside and/or operate in the People’s Republic of China or other foreign jurisdictions with lax trademark enforcement systems, or redistribute products from the same or similar sources in those locations.” What is the significance of whether or not the Defendants are based in China? Well, brands anticipate that because the sellers are in China, they may lack sufficient knowledge of the US legal system, may not be fluent in English, and may not have the wherewithal to pay for legal fees. These details give Plaintiffs in Schedule A lawsuits like this one the advantage. 

Kendra Scott | Schedule A Infringement Lawsuit: Downsides of Settlements

Oftentimes, e-commerce sellers based in China who have been accused of infringement seek a settlement with the brand in question. Kendra Scott may try to enter into negotiation with Defendants to reach a settlement. The amount sellers receive when they settle with brands is usually around 60% of the money in their frozen account. The rest of the funds are given to the Plaintiff, regardless of whether the infringement claims are true or not. We would like to emphasize that everything in the complaint is an allegation, not a judgment. Because the infringement claim is an allegation made by Kendra Scott, sellers named in the suit may or may not have actually done anything wrong. 

If sellers retain legal counsel, they have a much better chance at resolving the issue and keeping more than 60% of their money. Every seller’s business operation is different, but most sellers should consider exploring their legal options before they just settle. Figuring out an effective, responsible strategy for minimizing the amount of loss will benefit online sellers in the long run, so legal counsel may be worth the investment.

Claims Detailed in Infringement Lawsuit 23-cv-16010

This lawsuit has affected online sellers based in China and other locations who have sold Kendra Scott products on Amazon, eBay, Temu, Etsy, DHgate, Walmart, AliExpress, and Wish.com. The legal complaint for this case is very similar to many other Schedule A lawsuits we have written about in the past. The templated content of the complaint relays much of the same allegations we have seen time and again. Let’s examine a selection of these infringement claims below: 

• Kendra Scott’s reputation as a brand has been tarnished due to trademark infringement and counterfeiting. 
• Defendants sell counterfeit goods as part of a global network of counterfeiting. 
• Sellers knowingly submit false information to platforms they sell on in order to obscure their actual identities. 
• The use of off-shore bank accounts allows the Defendants to avoid being held accountable for their infringement. 
• Sellers actively deceive consumers into buying counterfeit Kendra Scott goods by making it appear that they are authorized retailers. 

Stockman & Poropat, PLLC Can Save You Time and Money

Our team at Stockman & Poropat, PLLC has provided much needed legal solutions to many online sellers in this exact predicament. Once we understand the particulars of your e-commerce business operation, we can develop a strategy to help you navigate this lawsuit. We want to work with you to find a clear path forward for your business. Our intellectual property firm is passionate about saving our clients time and money. Contact us for a free consultation!

Download the legal complaint below:

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