'; Wallace Feng Discusses Denial of Motion to Seal the Defendants Names in a “Schedule A” Litigation

Wallace Feng Discusses Denial of Motion to Seal the Defendants Names in a “Schedule A” Litigation

March 18, 2024

By Wallace Feng

On December 20, 2023, the Northern District Court of Illinois denied a motion to seal in a “Schedule A” trademark infringement and counterfeiting case (Zorro Productions, Inc. v. Individuals et al., No. 1:23-cv-05761). The plaintiff, Zorro Productions, Inc. (“Zorro”), had sought to seal the names of 310 defendants from the public. The Court held that keeping such information under seal was improper. (Dkt. No. 36.)

The Court explained that the “tradition of openness is deeply woven into the fabric of the judiciary” and that “[d]ocuments that ‘influence or underpin the judicial decision are open to public inspection unless they meet the definition of trade secrets or other categories of bona fide long-term confidentiality.’” (Dkt. No. 36 at 2 (quoting Baxter Int’l, Inc. v. Abbott Lab’ys, 297 F.3d 544, 545 (7th Cir. 2002)).) The identities of the defendants did not fall under an exception. Although Zorro alleged that public disclosure could result in the “destruction of relevant documentary evidence and the hiding or transferring of assets,” the Court ruled that the   “possibility of document destruction is not much of a basis for sealing documents” and that

“defendants in Schedule A cases tend to be foreign sellers who do not produce documents at all.” (Id. at 2–3.) To the extent that the plaintiff was interested in stopping alleged counterfeiting, the Court reasoned that the remedy was more publicity, not secrecy. (Id. at 4.)

The Court also commented on “Schedule A” infringement cases in general. Noting the proliferation of these cases in the Northern District of Illinois, the Court observed the pattern that Schedule A plaintiffs typically follow in litigation:

. . . Schedule A plaintiffs rush into court, request and receive an asset freeze [over defendants], and obtain a default judgment. And then, the Schedule A plaintiffs ask district courts to unfreeze the money and award statutory damages, not equitable relief.

Truth be told, the Schedule A plaintiffs’ bar asks courts in this district to lock down assets [of defendants] through an asset freeze on day one of a case, and do so under seal. And then, at the end of the case, Schedule A plaintiffs simply ask the Court to bless an order requiring third parties to hand over all of the frozen funds. The Schedule A plaintiffs receive a remedy at law, not a remedy in equity, which means that there was no justification for an asset freeze in the first place.

(Id. at 5.) In this case, the Court indicated that there was no basis for an asset freeze. (Id.)

Wallace Feng