Schedule A's Third-Party Injunction Problem

<p><span>Rights owners and their legal counsel have responded to increased intellectual property infringement with a new strategy: so-called “Schedule A” litigation. This litigation tactic involves rights owners filing single complaints against dozens to hundreds of different online sellers (often listed in a separately attached “Schedule A”), seeking&nbsp;<i>ex parte&nbsp;</i>TROs that freeze the defendants’ assets and otherwise restrict their movements, and pursuing these claims to default judgments.&nbsp;Although Schedule A litigation has existed for almost a decade, it has recently come under increased scrutiny due to its procedural faults. Scholars, judges, and other interested parties have criticized it for violating various rules in the Federal Rules of Civil Procedure.&nbsp;Others have criticized it for harming defendants’ due process rights.</span></p> <p><span>&nbsp;</span><span>In this Article, I scrutinize another fault of Schedule A litigation, which I consider the linchpin on which the entire enterprise is based. Injunctions in Schedule A litigation purport not only to bind defendant sellers of allegedly infringing goods, but also third-party service providers who are not named in the complaint.&nbsp;These injunctions attempt to impress non-parties into the plaintiffs’ service to protect their intellectual property. Most of the time they succeed.</span></p> <p><span>&nbsp;</span><span>Yet these Schedule A injunctions violate the long-standing limits of what an injunction can do. Under Federal Rule of Civil Procedure Rule 65(d)(2), a non-party can only be enjoined if it is a party’s agent or otherwise acting in “active concert or participation.”&nbsp;Online service providers offering neutral services to all comers should not meet this high bar under Rule 65(d)(2). Allowing overbroad injunctions such as these violates due process and harms the existing balance intellectual property law has tried to strike between rights owners, service providers, and their users.</span></p>