Many plaintiff lawyers who handle intellectual property matters, such as copyright infringement and trademark infringement, rush to federal court, grouping in a bunch of defendants, and immediately seek to obtain a temporary restraining order (TRO) as well as a preliminary injunction to then use as leverage against those defendants to spend money in a settlement as opposed to fighting out cases in litigation.
This is becoming a very common tactic, where these plaintiff lawyers will do everything in their power to cause the court to implement an asset restraint with third parties such as Amazon, PayPal, Stripe, and Shopify. It puts the crunch on defendants and often makes them believe they are immediately disadvantaged even if they have strong defenses to the underlying claims.
If you or your company find yourself in a situation where your assets have been frozen and restrained, then feel free to contact us about your particular issue. We keep all communications confidential, pride ourselves on quick and active responses, and do not charge for initial consultations.
Plaintiff lawyers in these copyright and trademark matters have become emboldened by federal judges who simply sign off on these requests for TRO and preliminary injunctions, but based on our efforts that may be changing. Until more defendants reach out to us and similar lawyers who are not afraid to challenge these plaintiff lawyers, these aggressive plaintiff lawyers will continue to send emails like the one that caused me to draft this post. In that email, counsel for a plaintiff argued that our client should pay an unreasonable settlement demand because “their Amazon account will remain restrained for the duration of the litigation, and I can’t see how that would make sense for this store.”
These abusive tactics concerning asset restraints must come to an end. Fortunately, we are making progress on that front.
Take, for instance, an order that was handed out in the U.S. District Court for the Middle District of Florida on May 19 concerning a couple of our defendant clients on our motion to modify asset restraint in a preliminary injunction. In that order, the federal judge noted that the amounts frozen were not limited to a reasonable approximation of the amount potentially recoverable and thus not compliant with the law. The asset freeze was deemed overbroad and the plaintiffs offered no evidence or argument as to any reasonable approximation of profits from infringement applicable to all defendants.
The asset restraints were lifted and the plaintiffs were directed to provide a copy of the order to all third parties such as PayPal or other vendors or providers. These defendants could have easily just succumbed to the threats of the plaintiffs and their counsel and paid an unjustifiable amount of money to settle the claims. Instead, they fought back and the leverage was shifted.
If you or your company find yourself in a similar situation where your assets have been restrained or frozen, then reach out to us to see if we can help.