In an increasingly digital marketplace, brands face an unprecedented threat from counterfeiters and unauthorized sellers. The ubiquity of e-commerce platforms has made it easier than ever for bad actors to profit from a brand’s reputation and intellectual property, leading to significant financial losses and reputational damage. A brand’s intellectual property, once a challenge to protect in physical storefronts, is now vulnerable to a new breed of sophisticated, anonymous infringers operating on a global scale.
This article provides a comprehensive overview of modern anticounterfeiting strategies, exploring how brands can leverage marketplace tools and powerful legal mechanisms like the «Schedule A scheme» to safeguard their intellectual property, revenue, and customer trust.
Background: The Rising Tide of Counterfeiting
The scale of the online counterfeiting problem is staggering. According to recent reports from the Organization for Economic Co-operation and Development (OECD) and the European Union Intellectual Property Office (EUIPO), the global trade in counterfeit goods was valued at approximately $467 billion in 2021, representing 2.3% of total global imports.
Other analyses, such as those from Frontier Economics, have projected the total economic and social costs of counterfeiting and piracy to reach as high as $2.8 trillion. According to the MSU survey, 7 in 10 consumers are deceived into buying counterfeit products online.
The economic impact is not limited to lost sales; it also includes brand dilution, erosion of consumer trust, and the cost of enforcing intellectual property rights. Counterfeit products can also pose serious health and safety risks to consumers, a danger often masked by the deceptive veneer of online listings.
The challenges posed by modern e-commerce are unique. Counterfeiters exploit the logistical efficiency of global shipping and the anonymity of online platforms. They often ship low-cost, low-volume goods directly to consumers via postal services, a process known as «de minimis» trade. Under the de minimis rule, goods below a certain value threshold (currently $800 in the U.S.) can be imported into the country duty-free and with minimal formal entry procedures.
This allows a high percentage of packages to evade scrutiny from customs officials, as the volume is simply too large for comprehensive inspection. This presents a formidable barrier to enforcement for both brands and government agencies. Furthermore, these illicit operations are not confined to a single country or region; they are highly adaptable and operate across multiple jurisdictions, making traditional legal enforcement difficult and costly.
Retail e-commerce sales rose to $6.3 trillion in 2023, from $1.8 trillion in 2016, and are expected to grow to $8.1 trillion by 2026, with 4.5 billion users worldwide – or roughly half the population of the planet, according to data tracking site Statista. What’s more, by 2026, e-commerce is expected to make up 24% of all retail sales, up from 18.8% in 2021.
Though retail giants like Amazon and China’s Alibaba dominate the e-commerce market, most of this explosive growth can be attributed to small- and medium-sized businesses selling their goods and services online. Of course, the pandemic only juiced the machine even more. In 2021 alone, the number of e-commerce websites grew from 9.7 million to 19.8 million, and there are now 26.5 million e-commerce sites operating worldwide.
To effectively combat this threat, a comprehensive, multi-faceted approach is required. A modern anti- counterfeiting strategy must combine three key pillars: technological solutions, platform-based defenses, and proactive legal mechanisms. It is no longer sufficient to focus on a single approach; instead, brands must build a layered defense system that anticipates and responds to threats from all angles. Brand protection is not merely a legal cost; it is a critical investment in maintaining the integrity of a brand’s reputation and the long-term value of its intellectual property.
DISCLAIMER: This article is presented for informational purposes only. This article is not intended to be a review of the U.S. Law or court practice. This article may not represent the views of the author’s employing law firm (if any). Although every effort has been made to verify the accuracy of this article, readers are encouraged to verify independently any matters of specific concern or interest.
Marketplace Tools: Leveraging Platform-Specific Defenses
The first and most critical line of defense for a brand in the digital marketplace is leveraging the brand protection tools offered by the marketplaces themselves. Major e-commerce platforms, recognizing their own interest in maintaining a trustworthy environment, have developed a suite of programs to assist brand owners in their fight against infringement.
Amazon Brand Registry and Related Programs
Amazon, as the dominant force in e-commerce, has pioneered a tiered suite of brand protection programs that have become the de facto standard. The cornerstone of this ecosystem is the Amazon Brand Registry. By enrolling, a brand owner who holds an active, registered (or pending) trademark gains access to a powerful set of tools.
The Brand Registry provides greater authority over product listings, giving brands the ability to ensure that only authorized sellers can represent their products with accurate images and descriptions. It also offers a streamlined system for reporting IP infringement, which is a foundational tool for takedown requests.
Beyond enforcement, the registry unlocks a suite of marketing and analytics tools, such as A+ Content and Brand Stores, which help brands monitor their performance and consumer sentiment. This enables them to differentiate their authentic products from potential fakes through rich, high-quality content and a dedicated brand presence.
Practical Steps
- Eligibility: Secure a registered trademark (or pending) in a jurisdiction where Amazon operates. Use a word mark (preferred) or image mark.
- Enrollment: Go to Amazon’s Brand Registry portal and click “Enroll your brand”. Provide trademark details, business information, product categories, and proof of brand usage.
- Post-enrollment: Access tools like Report a Violation (RAV) for IP takedown requests. Gain analytics dashboards to monitor infringement and brand health. Assign users and manage roles.
Why It Matters
- Foundation for other Amazon IP tools (Project Zero, Transparency).
- Central hub for managing brand control and listing content.
- Two of Amazon’s most potent tools for direct anticounterfeiting are Project Zero and the Transparency Program.
Project Zero
This program represents a significant shift from a reactive to a proactive enforcement model. It combines Amazon’s machine-learning technology with a self-service counterfeit removal tool. Once enrolled, brands gain the ability to directly remove infringing listings from the marketplace without needing to file a formal report and wait for Amazon’s review.
This instant takedown capability is a game-changer for speed and efficiency. The underlying AI technology learns from every takedown, making it more effective at automatically scanning millions of product listings daily to detect and block suspected fakes before a customer ever sees them. This proactive approach helps stop counterfeits at the source, preventing both lost sales and customer dissatisfaction.
Practical Steps
- Prerequisites: Must be enrolled in Brand Registry, have a track record of using RAV with at least a 90% acceptance rate, and complete Amazon-provided training.
- Enrollment: Visit the Project Zero page within Brand Registry, follow the prompts, and complete the required training.
- Usage: Use the self-service counterfeit removal tool: locate suspicious listings, conduct a test buy if needed, then remove listings proactively. Track activity via “Submission history” in the Brand Registry portal. Sellers receive complaints when listings are removed.
- Automation: Amazon uses AI to block suspected infringing listings before brand owners even spot them – over 99% are intercepted automatically.
Why It Matters
- Empowers immediate action against counterfeits.
- Strong automation support reduces burden and increases efficacy.
Transparency Program
This is a serialization service designed to prevent counterfeit products from ever reaching customers in the first place. For a brand’s enrolled products, Amazon requires a unique, scannable code on every single unit. Before a product ships, Amazon scans the code to verify its authenticity.
If the code is not authentic or has already been used, the product is flagged as a potential counterfeit and never makes it to the customer. This program not only prevents fakes from entering Amazon’s fulfillment network but also empowers consumers, who can use a mobile app to scan the code themselves to verify that their purchase is genuine.
This builds a powerful layer of trust and security, enhancing the customer experience and reinforcing the brand’s value proposition.
Practical Steps
- Eligibility: Must be a Brand Registry participant.
- Enrollment: Access the Transparency portal via Brand.
- Registry, add your brand/products, and order unique codes.
Implementation Options
- Print and apply Amazon-issued codes in-house.
- Use a service provider to label products.
- Integrate codes directly into packaging.
- Or, connect with your existing serial numbers.
Fulfillment Integration
- For FBA, Amazon scans codes upon receipt and flags non-compliant units.
- For FBM, provide codes when confirming orders to trigger validation.
Impact
- Over 2.5 billion units have been verified, across 10 countries.
- Enhances transparency and consumer trust through unit-level authenticity.
Other E-commerce Platforms
A successful brand protection strategy must be multiplatform. Relying solely on Amazon’s tools is insufficient, as infringers will simply shift their operations to other marketplaces. Brands must recognize that each platform has its own unique rules and mechanisms, requiring a tailored strategy.
Walmart’s Brand Portal: Similar to Amazon’s registry, Walmart’s Brand Portal provides brand owners with tools to monitor for unauthorized listings and pricing issues. By enrolling a registered USPTO trademark, brands can take control of their product content and submit IP infringement claims through a simplified process.
The portal also provides valuable insights into brand performance and content compliance, helping brands to maintain a consistent and accurate presence on the marketplace.
Practical Steps
- Ensure you have an active USPTO-registered trademark.
- Using your Seller Center credentials, register for the Walmart Brand Portal.
- Submit your company profile, trademark number, brand name, and contact info.
Once approved
- Access the dashboard to submit IP claims (trademark, counterfeit, patent, copyright).
- Monitor claim status and history.
- Assign Acting Brand Owner or Authorized Reseller roles, enabling control over listings and content editing.
Why It Matters
- Centralized interface to manage listings, claims, and brand presence on Walmart Marketplace.
- Improves response speed and visibility vs. older manual processes.
eBay’s Verified Rights Owner (VeRO)
Program: eBay’s program, known as VeRO, allows intellectual property rights owners to report listings that they believe infringe on their rights. The program covers a wide range of IP, including trademarks, copyrights, and patents. To report an infringement, a rights owner must file a «Notice of Claimed Infringement» (NOCI), which can lead to the removal of the listing. The VeRO program is a critical component of eBay’s effort to create a safe trading environment and requires active engagement from brand owners to be effective.
Practical Steps for Brand Owners
Register as a Rights Owner
- Sign up for eBay’s VeRO Program and complete the Notice of Claimed Infringement (NOCI) form to report potentially infringing listings.
- Submit Clear and Accurate Reports.
- Include details like trademark registration, unauthorized use, and specific examples of infringement to ensure clarity.
Monitor Listings Regularly
- Track suspect listings manually or with third-party tools, then submit NOCI forms to eBay via email or fax.
- Provide Follow-Up if Needed.
If a seller believes a listing was wrongfully removed, they can contact you directly (eBay provides your contact info). If appropriate, you can retract the request.
Publish a VeRO Participant Profile
Clarify your rights enforcement policies by creating a profile that explains your approach and parameters for reporting.
Best Practices and Seller Feedback
- Create Compliant Listings.
- Sellers must use original photos and text, not copy manufacturer or third-party descriptions/images without permission.
- Expect Seller Pushback.
- Sellers often report listings being removed despite being legitimate.
Why It Matters?
- Protects your IP by removing infringing listings.
- Sends a strong signal: misuse of your brand will be targeted swiftly.
- Helps preserve brand reputation and consumer trust.
The Schedule A Scheme: A Powerful Legal Tactic
While marketplace tools are a brand’s first line of defense, they are not always sufficient to stop organized and anonymous counterfeiting rings. This is where a powerful legal tactic known as the «Schedule A scheme» comes into play.
Originating and most commonly used in the U.S. District Court for the Northern District of Illinois – and to a lesser extent in New York and Miami – this scheme is a procedural approach used to sue multiple unidentified online counterfeiters in a single, consolidated lawsuit.
The core of the strategy is the use of a «Schedule A» to list dozens or even hundreds of anonymous, «John Doe» defendants. The plaintiffs, typically brand owners, file a complaint against these defendants, who are identified by their online merchant names and account IDs.
The lawsuit is often filed under seal, meaning the defendants are not initially aware of the legal action against them (sealed “Schedule A”). This enables ex parte requests for temporary restraining orders (TROs) or preliminary injunctions that immediately freeze online marketplace accounts and funds – often without the defendants’ knowledge or opportunity to respond.
Procedural Advantages and Mechanics
The primary goal of a Schedule A lawsuit is to obtain an ex parte Temporary Restraining Order (TRO). An ex parte order is one granted by a court without a hearing or notice to the opposing party. This is a crucial, and often controversial, aspect of the scheme. Plaintiffs argue that this is necessary to prevent the defendants from transferring their assets or destroying evidence before they are even served with a lawsuit.
If the court grants the TRO, the brand owner can then serve it on the e-commerce platforms and payment processors (like PayPal or Stripe). The result is immediate and devastating for the defendants: their product listings are taken down, their merchant accounts are frozen, and their funds are seized.
The advantages for the brand owner are significant
Cost Efficiency: A single federal court filing fee can be used to sue a multitude of infringers, dramatically reducing the legal costs compared to filing individual lawsuits. This allows brands to pursue a large number of bad actors simultaneously.
Speed and Impact: The ex parte TRO allows for an immediate and comprehensive takedown of infringing listings and a freeze of assets, effectively shutting down an entire counterfeit operation in a single coordinated action. This prevents the «whack-a-mole» problem of a counterfeiter simply moving to a new account.
Discovery
The court-ordered discovery process allows the brand owner to compel the platforms and payment processors to reveal the true identities and contact information of the anonymous defendants, which is often the primary goal of the litigation. This information is a prerequisite for formal service of process and is a powerful tool for intelligence gathering on the counterfeiting operation.
The Northern District of Illinois has become a popular venue for these cases, with thousands filed in the last decade. This is due, in part, to a history of judges in the district being receptive to granting the ex parte TROs that are critical to the strategy’s success. The legal rationale for this procedural device is rooted in the plaintiffs «need to obtain information about the defendants» identities to properly serve them, a necessity recognized in Federal Rule of Civil Procedure 26(d)(1).
Criticisms and Judicial Scrutiny
While the Schedule A scheme is a powerful tool, it is not without its critics and has been subject to increasing judicial scrutiny. Legal scholars and some judges argue that the practice can be abused. The use of an ex parte TRO, which bypasses due process, is a major point of contention.
Critics argue that the due process rights of the defendants are compromised, as their accounts are frozen and their business is halted without them ever having a chance to be heard. This is particularly problematic if the defendants are legitimate resellers or if the allegations of infringement are weak.
A Harvard Law Review article has even referred to the practice as a «Counterfeit Sham», suggesting that plaintiffs sometimes use the rhetoric of fighting nefarious, large-scale counterfeit rings even when a case involves minor trademark infringement.
The key criticism is the imbalance of power: the brand owner, a large corporation, can use a consolidated, streamlined legal process to seize funds and take down listings from hundreds of small, often foreign-based sellers who lack the resources and legal knowledge to defend themselves. This can result in a quick settlement where the defendants lose their seized funds, regardless of the ultimate merits of the case.
This scrutiny is prompting a re-evaluation of the scheme, with some courts beginning to demand more concrete evidence from plaintiffs to justify the extraordinary remedy of an ex parte TRO. Courts are increasingly requiring more detailed affidavits and evidence of irreparable harm before granting such a powerful order. As a result, brand owners must be meticulous in their preparation and have strong, defensible claims to effectively utilize this legal tool.
To summarize, despite operational appeal, the Schedule A approach poses significant due pro- cess and procedural fairness concerns:
- Lack of Notice and Opportunity to be Heard. Defendants frequently remain unaware – often in distant jurisdictions, ill-equipped for U.S. litigation – until accounts are frozen.
- Weak Joinder Justifications. Courts have scrutinized whether multiple defendants satisfy joinder requirements under FRCP Rule 20(a)(2) – i.e., whether they acted together in the same transaction or share common legal/factual questions. Courts are increasingly rejecting mass joinder when defendants appear independent.
- Abuse of Secrecy and Ex Parte Relief. The sealed Schedule A and ex parte TRO mechanics reduce transparency and judicial adversarial review, creating potential for overreach and abuse.
- Sanctions and Judicial Pushback. Plaintiffs have incurred sanctions for service and joinder failures – even absent bad faith – under Rule 11 when reasonable inquiry was not performed (e.g. Opulent Treasures case).
Recent Judicial Pushback Judicial resistance to SAD tactics is mounting across several fronts:
- Panel of Illinois Federal Judges Push Back.
- Judges Blakey, Harjani, Daniel, and others have dismissed or denied TROs in Schedule A cases – especially when plaintiffs fail to establish a proper connection among defendants.
Standing Order and Stay on Schedule A Cases
Judge Kness imposed a stay on all Schedule A cases on his docket to fundamentally reassess the approach. In a recent opinion, he ruled that the Schedule A mechanism “should no longer be perpetuated in its present form”, citing due process erosion, lack of adversarial proceedings, overbroad asset freezes, and mass joinder abuses.
Practitioner alerts forecast delays and higher proof burdens (e.g., more particularized evidence per defendant, tighter joinder theories).
At the same time, the Northern District of Illinois remains the epicenter for such cases, with thousands filed over the last decade; one judge famously observed, “It has become the Northern District of Illinois vs. the Internet”.
Conclusion: A Multi-Layered Approach to Protection
The fight against online counterfeiting is an ongoing and complex battle that requires a dynamic and adaptive strategy. The most effective brand protection plan is not a single tool but a multi-layered defense.
Brands must first establish a strong foundation by actively engaging with and fully utilizing the native tools offered by major e-commerce platforms. Enrolling in programs like the Amazon Brand Registry and Walmart’s Brand Portal is a non-negotiable first step, as it provides both the authority and the initial means to combat infringement where it most often occurs. These programs are essential for both reactive takedowns and proactive monitoring.
This platform-specific defense should then be supplemented with more robust technological solutions. Third- party brand protection services, leveraging advanced AI, machine learning, and image recognition, can provide a comprehensive shield that monitors a far wider digital landscape, including social media, websites, and app stores. These tools can identify emerging threats before they grow into major problems, providing a holistic view that no single marketplace can offer.
Finally, for the most challenging and organized threats, brands must be prepared to employ aggressive legal tactics. The Schedule A scheme, despite its controversies, remains a powerful mechanism for a swift, large-scale takedown of anonymous infringers and the seizure of their illicit profits. While its use requires careful consideration and adherence to evolving judicial standards, it can be an indispensable tool in a brand’s arsenal.
Ultimately, a modern brand protection strategy recognizes that marketplace tools and legal schemes are not mutually exclusive. They are complementary components of a comprehensive plan. By combining these approaches, brands can create a powerful and unified defense that protects their intellectual property, preserves their revenue, and maintains the trust of their consumers in the ever-evolving online world.
Marketplace tools and legal strategies like the Schedule A scheme should not stand alone – they must be integrated as complementary instruments in a broader enforcement strategy.
Only a harmonized approach – a mesh of platformbased defenses and appropriate legal intervention – creates a durable, defensible strategy that protects intellectual property, revenue, and the brand’s reputation in a digital-first world.
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