Overview of Intellectual Property (IP) Infringement and Enforcement in Cross-Border E-Commerce

This report provides a comprehensive overview of the key legal challenges, enforcement strategies, and recent procedural developments facing intellectual property (IP) holders in combating infringement in the cross-border e-commerce sector. Drawing from litigation trends in U.S. federal courts, particularly those involving global platforms like Amazon, eBay, and Alibaba, it outlines both the obstacles to effective enforcement and the emerging legal tools—such as Schedule A lawsuits, electronic service, and asset freezing orders—used to protect IP rights. 

I. Challenges Faced by IP Rights Holders

U.S. plaintiffs, namely intellectual property rights holders, encounter several significant challenges in combating cross-border e-commerce IP infringement:

(1) Identifying Infringers:

• Many infringing operations are located overseas, increasing the complexity of jurisdiction and enforcement.

• The anonymity of e-commerce platforms enables bad actors to easily evade detection by frequently changing aliases.

• Infringers often use small parcel shipping, which complicates interception and enforcement efforts.

• Cross-border e-commerce sellers typically operate independently from manufacturers, further increasing traceability challenges.

• The vast number of infringing products and the ease of creating new seller accounts on e-commerce platforms make enforcement efforts resemble a “whack-a-mole” game.

(2) Complexity of Investigation:

• Investigations are resource-intensive and often take months to yield actionable intelligence.

• Common sales venues for infringing products include platforms such as eBay, Amazon, and Alibaba, as well as social media platforms.

• Manual and automated keyword searches can help identify targets, including common misspellings of trademarks and related terms.

(3) High Costs:

• Traditional enforcement measures (e.g., cease-and-desist letters and third-party takedown procedures) have limited effectiveness. While these measures can remove infringing products, they do little to prevent bad actors from relisting them.

• These methods are expensive and fail to provide lasting deterrence.

II. Proposed Solution: Joining Multiple Defendants Under One Complaint

To address the above challenges, a growing litigation strategy known as Schedule A lawsuits has emerged, featuring the following innovations:

(1) Case Consolidation:

• A single lawsuit often includes 50 to 150 defendants listed in Schedule A (an appendix to the complaint), enabling efficient handling of high-volume infringement cases.

(2) Innovative Enforcement Measures:

• Electronic Service: Plaintiffs may file motions to serve defendants via email or electronic publication, especially when traditional methods are impracticable.

• Asset Restraining Orders: Plaintiffs request early-stage court orders to freeze defendants' assets to ensure availability of compensation or settlement funds later.

These measures aim to achieve cost neutrality and, in some cases, even generate a net positive return.

(3) Parallel Procedures:

• Litigation proceeds in tandem with notice and takedown actions, ensuring a multi-pronged enforcement approach.

III. Litigation Process

The general litigation process is as follows:

(1) Pre-Suit Investigation:

• Investigators identify infringing sellers in the market through keyword searches, social media monitoring, and website data—particularly overseas operators selling unauthorized low-cost products to U.S. customers.

• Target marketplaces include Amazon, eBay, Alibaba, etc.

(2) Filing the Complaint:

• The complaint usually alleges trademark infringement, copyright infringement, and design patent infringement, with a focus on registered rights.

Filed motions often include:

• Motion to Seal: Protects sensitive information to prevent infringers from transferring assets or destroying evidence upon learning of the lawsuit.

• Motion for Electronic Service: Facilitates service to hard-to-locate defendants.

• Ex Parte Temporary Restraining Order (TRO) Motion: Enables immediate injunctive relief and asset freezes.

(3) Preliminary Injunction:

• Plaintiffs serve summonses and complaints quickly via email.

• Courts may grant preliminary injunctions to maintain asset freezes until the case is resolved.

(4) Case Resolution:

• Cases are resolved through settlement or default judgment, with statutory damages calculated based on the severity and willfulness of the infringement.

IV. Damages and Settlement Strategy

Generally, damages are based on the losses suffered by the plaintiff and the profits gained by the defendant. Willful infringement may result in enhanced penalties.

(1) Trademark Infringement:

• Under 15 U.S.C. § 1117(c), plaintiffs may claim up to $2 million in statutory damages for willful trademark infringement.

• Courts consider factors such as:

  • Defendant’s strategies to evade detection,

  • Sales volume,

  • Internet exposure,

  • Brand promotion tactics,

  • Deterrence needs.

(2) Copyright Infringement:

• Under 17 U.S.C. § 504, statutory damages for willful copyright infringement may reach up to $150,000.

(3) Patent Infringement:

• Damages are based on the plaintiff's losses and defendant's profits. There is no statutory damage provision.

• Defendants must prove their assets are unrelated to the infringement.

• For willful infringement, courts may impose treble damages (3× the base amount).

(4) Settlement Dynamics:

• Settlement demands vary depending on the nature of infringement, seller scale, and market type.

V. Legal Developments

Significant developments have occurred regarding jurisdiction, joinder of defendants, and methods of service:

(1) Personal Jurisdiction:

• Even a single transaction occurring within the jurisdiction of the Seventh Circuit may suffice for personal jurisdiction if part of regular business operations (e.g., NBA Properties, Inc. v. HANWJH).

• Other circuit courts have emphasized that jurisdiction depends on the defendant’s contacts with the forum, not merely the volume of sales.

(2) Joinder of Defendants:

• For trademark and copyright infringement, most courts apply a liberal joinder policy.

• For patent infringement, courts are more cautious:

  • Under the America Invents Act (AIA), joinder is allowed only when multiple defendants’ actions arise from the same transaction, occurrence, or product.

  • This “same product” requirement prevents plaintiffs from bundling unrelated infringement claims solely based on similar technology.

(3) Methods of Service:

• Courts are increasingly receptive to electronic service:

  • Many allow email service under FRCP 4(f)(3), even when the Hague Convention applies (e.g., Viahart, L.L.C. v. He GangPeng).

  • Many courts hold that FRCP 4(f)(3) provides alternative service methods—including Hague service—without prioritization.

• The Southern District of New York once expressed, in Smart Study Co. v. Acuteye-Us, that service in China must comply with the Hague Convention.

  • However, recent cases in the same court indicate a loosening stance, and electronic service is generally permitted.

VI. Conclusion

U.S. IP rights holders face substantial challenges in enforcing their rights in cross-border e-commerce, including difficulty identifying infringers, complex investigations, and high enforcement costs. Innovative measures—such as large-scale joinder of defendants, electronic service, and asset freezing—aim to improve enforcement efficiency but also increase the legal and operational risks for cross-border e-commerce businesses.

U.S. federal courts are becoming increasingly strict in awarding damages for infringement. Statutory damages for trademark, copyright, and patent infringement can reach millions of dollars, and the widespread adoption of electronic service makes it harder for businesses to evade overseas legal accountability. These changes significantly increase the compliance pressure and operational costs for cross-border e-commerce companies.

For more detailed information on IP infringement and enforcement in cross-border e-commerce, we welcome you to consult Allbelief Law Firm’s column on Cross-Border E-Commerce IP (click here to view). Whether you seek to initiate enforcement actions or are facing lawsuits or asset freezes, please feel free to contact us for professional support.

(Disclaimer: The information released is for information only and should not be construed as legal advice or a basis for decisions on any topic. All rights reserved. Reproduction requires permission from Allbelief Law Firm.)