Overview of TRO Bond Requirements in IP Infringement Cases — Using the U.S. District Court for the Northern District of Illinois as an Example

In the U.S. District Court for the Northern District of Illinois (NDIL), intellectual property right holders’ applications for ex parte temporary restraining orders/injunctions (TROs) have become a common enforcement mechanism, particularly in cases involving cross-border e-commerce platforms and “Schedule A” mass-defendant actions. On the surface, a judge’s requirement that the plaintiff post a bond appears to be an important mechanism for safeguarding procedural fairness and compensating for potential misuse of injunctive relief. However, cases over the past year show that these bond amounts are often merely symbolic, typically only several thousand to ten thousand U.S. dollars, far below the scale of the frozen funds or the potential losses involved. More notably, although the rules grant defendants the right to seek compensation from the bond if an injunction is wrongfully issued, in practice there are very few cases in which the bond is actually used to compensate losses. This operational outcome has sparked ongoing discussion within both industry and academia regarding fairness and effectiveness.

1. Range and Typical Amounts of Ex Parte TRO Bonds

Over the past twelve months, in intellectual property infringement cases (including trademark, patent, copyright, and similar matters) before the U.S. District Court for the Northern District of Illinois (NDIL), the bond amounts required for ex parte TROs have generally been “symbolic,” though variations exist depending on the judge and the specific circumstances of each case. Overall, bond amounts mainly fall within the following ranges:

Common amounts:

In many cases, courts require plaintiffs to post only approximately USD 5,000 to USD 10,000 as a symbolic bond. This amount often does not increase with the number of defendants. For example, in numerous “Schedule A” mass-defendant cases, whether there are dozens or even hundreds of defendants, courts often still require only a total bond of about USD 5,000. This practice means that the bond amount allocated per defendant is extremely low; in some cases, the average per-defendant bond is even less than USD 130 (for instance, in one case the total bond amounted to only about USD 130 per defendant, while more than USD 300,000 in defendants’ assets was frozen).

Average and median values:

Based on recent NDIL cases, USD 10,000 is a very common bond amount and also represents the median in many cases. Many judges habitually set a USD 10,000 bond as a default standard. In most intellectual property TROs issued during 2024–2025, bond amounts were concentrated below five figures, with the average generally in the range of several thousand to ten thousand dollars. Because courts historically tend to set a fixed amount (such as USD 10,000), even in cases involving numerous defendants, bond amounts often gravitate toward this level.

Amount range:

The lower end of bond amounts depends on the specific circumstances. In a small number of cases involving only one or two defendants, the bond may be as low as USD 1,000–2,500. At the upper end, as courts have become more cautious about mass-defendant cases, some judges have begun to increase bond requirements based on the number of defendants. For example, some judges have expressly stated that in mass-defendant cases involving alleged sales of counterfeit goods, the bond should be calculated at USD 1,000 per defendant. Accordingly, in large cases involving dozens or hundreds of defendants, the bond could reach tens of thousands or even hundreds of thousands of dollars. In one instance, a court required a bond of USD 10,000 per defendant, resulting in a total bond requirement of several million dollars. This extreme requirement directly prompted the plaintiff to reduce the number of defendants from 218 to 5 in order to avoid a bond of approximately USD 2.18 million (even paying only a 2% surety premium would have been prohibitively burdensome). These examples demonstrate that over the past year, bond amounts have varied widely—from a few thousand dollars to potentially six-figure sums—depending on the judge’s standards and the scale of the defendant group.

It is worth noting that this trend toward higher bond amounts primarily appears in special categories of cases, such as mass online counterfeiting actions (so-called “Schedule A” cases). Some NDIL judges believe that higher bond requirements can pressure rights holders to conduct more cautious pre-filing investigations, evidence collection, and defendant screening. Overall, during the past year, USD 5,000–10,000 remained the mainstream bond range for NDIL intellectual property TROs, but in individual cases bond amounts increased with the number of defendants, raising the overall average.

2. Proportion and Examples of Bonds Used to Compensate Defendants’ Losses

In practice, actual use of bonds to compensate defendants is extremely rare. Under Federal Rule of Civil Procedure 65(c), if an injunction is later determined to have been wrongfully issued, the restrained party has the right to recover damages from the bond. However, in NDIL intellectual property cases over the past year, in the overwhelming majority of situations, bonds have not actually been used to compensate defendants’ losses. The main reasons include:

Most cases involve no subsequent compensation claims:

The vast majority of “Schedule A” mass-defendant cases ultimately end in default judgments against defendants or private settlements, and defendants rarely actively challenge the validity of the injunction. Many defendants, after having their assets frozen, choose to settle quickly or simply do not appear, leaving no opportunity or incentive to seek compensation. Scholars have noted that many defendants who are voluntarily dismissed or settle do not pursue compensation from the bond, and courts are also inclined not to readily draw on the bond to penalize plaintiffs absent bad faith. In other words, if defendants are dismissed or settle the matter, or if the court believes that drawing on the bond would be excessively punitive to the plaintiff, compensation is often not awarded.

Scarcity of actual payout cases:

Within the scope of available research, there are virtually no public records showing NDIL courts ordering compensation to defendants from bonds over the past year. Even in some cases where defendants successfully demonstrated that an injunction was wrongful, instances of obtaining bond compensation are exceedingly rare. For example, in an NDIL design patent case, the plaintiff’s TRO was questioned during proceedings, and several defendants ultimately prevailed on the merits and applied for a determination that the preliminary injunction was wrongfully issued, seeking compensation. However, as of early 2024, the court had only indicated that it would consider releasing the bond, with no specific compensation ruling yet issued. Overall, over the past year, the incidence of such bond compensation has been close to 0% and is practically negligible.

Representative reference cases:

Although NDIL itself has few precedents, similar cases in other jurisdictions can serve as references. For example, in a mass-defendant patent infringement case in the Southern District of New York at the end of 2023, the judge refused to extend the plaintiff’s TRO and ultimately vacated the injunction. Two defendants who actively appeared successfully obtained compensation from the bond: one received approximately USD 3,682.28, and the other approximately USD 14,641.51. The judge found that the plaintiff had insufficient evidence when seeking the injunction against these two defendants and that the injunction had wrongfully frozen their assets; accordingly, compensation was paid from the USD 20,000 bond previously posted by the plaintiff. However, even in that case—despite multiple improper actions by the plaintiff—the court refused to impose further sanctions or award attorneys’ fees to the defendants, limiting relief to compensation for direct losses from the bond. This case illustrates that even in the rare situations where defendants successfully recover, compensation is generally limited to actual losses and does not typically involve punitive awards against plaintiffs.

Overall, in most NDIL intellectual property TRO cases, the bond functions merely as a procedural formality and rarely becomes a real source of compensation for defendants. Bonds posted by rights holders when applying for TROs are often returned at the conclusion of the case or used to cover court costs, rather than to compensate defendants. Unless defendants persist in contesting the injunction, obtain a clear judicial determination that the injunction was “wrongfully issued,” and can prove specific losses, it is very difficult to draw on the bond. Statistics from the past year indicate that the proportion of bonds actually paid out to defendants is nearly zero. Even where isolated successful claims exist, they represent a negligible fraction and serve more as a reminder that courts may enforce the compensation rights granted under Rule 65(c) in extreme circumstances, rather than as evidence of a common practice.

(Disclaimer: The information published herein is for reference only and should not be regarded as legal authority or advice on any subject. All rights reserved. Reproduction requires permission from Allbelief Law Firm.)