SAD lawsuits will end small sellers

But lawsuits are very different from marketplace takedowns through programs such as VeRO – and SAD Scheme lawsuits are in a league of their own.

Professor Goldman called them in his draft paper, “an underreported system of abusive intellectual property (“IP”) litigation” and outlined an eight-step protocol plaintiffs use in the schemes. “The complaint will contain sparse factual assertions, none particularized to any defendant,” he wrote, and, “The complaint’s generic prose makes it easy to clone-and-revise for subsequent cases.”

In 2022, Goldman conducted research and identified 3,217 cases that met his criteria for a SAD lawsuit. Over 88% were filed in the Northern District of Illinois, with the Southern District of Florida next at (7.5%). We also found numerous SAD Schemes lawsuits filed in the Southern District of New York.

Goldman has been blogging about IP issues and Internet law on the Technology & Marketing Law blog for the past 18 years and is Associate Dean for Research and co-director of the High Tech Law Institute at Santa Clara University School of Law, to mention a few of his many credentials.

But he’s no ivory-tower dweller and appears genuinely distraught over the plight of online sellers at the hands of rightsowners who, in his words, weaponize the legal system.

When we mentioned the stress casual sellers were experiencing compared to larger sellers – one of the sellers who contacted us said he was having panic attacks – Goldman said small businesses have an extraordinary amount of stress too, because they’re literally out of business. “The casual seller you mention has got a very unfortunate sword hanging over their head. But for the people who are trying to run a business, who have payroll, who have mortgages, who have vendors to pay – when they get their accounts freeze and the cash freeze, all of that becomes at risk.”

That said, rightsowners are not going after the big players who are likely to fight back, they’re going after the small players who have no real means of defending themselves, according to Professor Goldman.