Should You Settle a Schedule A Case? How We Think About It

A few days after the freeze, many sellers receive a settlement demand from the plaintiff's firm. It often comes with a short deadline and a figure that has little to do with what the accused listing sold. The question we hear most is whether to just pay it.

Sometimes the answer is yes. Often it is "yes, but not that number." And occasionally it is no.

What a settlement actually buys

A typical agreement has the seller pay a sum, remove the accused listings and agree not to sell the accused products again. In exchange the plaintiff dismisses the seller, releases its claims about those products and tells the platforms to lift the freeze. The details matter more than sellers expect. We read closely for three things: how broadly the "accused products" are defined, whether the release covers every store the seller operates, and when exactly the plaintiff must send the release to the platforms.

When settling is usually the right call

If the listing used the brand's name or logo as its own, or reproduced the plaintiff's artwork, the claim is strong and the statutory damages exposure is real. Trademark counterfeiting carries up to $2,000,000 per mark per type of goods if willful (15 U.S.C. § 1117(c)), and copyright up to $150,000 per work (17 U.S.C. § 504(c)). Courts rarely award anything close to that against small sellers, but the numbers explain why plaintiffs negotiate from strength. In those cases the goal is a fair figure and clean paperwork, quickly.

Settling also makes sense when the frozen amount is modest and the business needs the account back. Defending a federal case costs real money, and paying more in fees than the freeze is worth is not a win.

When it deserves a harder look

We push back, or recommend contesting, in a few recurring situations. A seller used a brand name only to describe compatibility, which is a classic fair use problem for the plaintiff (see 15 U.S.C. § 1115(b)(4)). A design patent case lumps together sellers whose products look different from each other, which runs into the joinder limits Congress put in the patent statute (35 U.S.C. § 299). The freeze is many times larger than anything the accused listing earned. Or the demand ignores the seller's actual sales entirely.

Contesting does not always mean litigating to the end. Often a motion to narrow the freeze or a credible joinder challenge changes the negotiation, and the case settles on better terms a few weeks later.

How we negotiate

We start with the seller's real sales of the accused product, documented. Plaintiffs' firms handle hundreds of these defendants and respond to specifics. We keep admissions out of the correspondence and do not mention stores that are not frozen. Timing matters too: talks typically begin within a week or two of the TRO, while the plaintiff is preparing its preliminary injunction motion.

If you have a demand in hand, do not reply to it yet. Send it to us with your sales figures for the accused listings and we can tell you whether the number is in a reasonable range.