By Hari Nathan Kalyan, Managing Attorney, Warren Kalyan.
Five Key Takeaways
- Amazon wants payouts paused. It has asked Chicago federal judges to stay orders that would transfer frozen seller funds to trademark plaintiffs in more than two dozen Schedule A cases, and many judges have granted stays.
- These are allegations, not findings. No court has found misconduct, and Schedule A suits are not improper as a category.
- Sellers should act fast. A platform hold and a court order are different problems with different deadlines, and a missed deadline can mean a default judgment.
- Do not settle because a number matches your balance. A settlement should reflect the merits of the claim, not the size of your frozen account.
- Brand owners carry responsibility too. Tie each claim to a real product that uses your mark, and supervise your counsel.
Picture waking up to find your online store frozen. Your balance is locked. A court order, which you never saw coming, names your shop alongside hundreds of others. You may not even sell anything close to the product in the lawsuit.
That scenario is the center of a dispute now playing out in federal court in Chicago. If you sell products online, or you own a brand and want to protect it, it is worth understanding.
What Happened
Schedule A lawsuits let a brand owner sue many online sellers in one case. The sellers are listed on an exhibit called Schedule A. Brand owners use these suits against counterfeiters, and the cases usually move fast. A plaintiff can ask for a temporary restraining order, and a court can freeze seller funds held by a marketplace. Courts can also order the marketplace to transfer those funds to the plaintiff.
Amazon is not a party to these cases. But it is the one holding the money. Since late summer 2026, Amazon has been filing motions in the Northern District of Illinois asking judges to stay, meaning pause, those transfer orders. Law360 reported on October 14 that Amazon is investigating whether some of the suits were used to get at money Amazon had frozen for unrelated reasons. By October 16, the Cook County Record reported that Amazon had filed similar motions in more than two dozen cases, and that judges in many of them had granted stays.
Amazon's filings point to a few things that caught its attention. According to the reporting, Amazon says settlement amounts in some cases matched sellers' frozen balances "to the cent," including $14,780 and $7,953.26. It also says one plaintiff claimed rights in HVAC vent covers while the sellers it sued offered items like craft kits and boots. And it says its review of just four cases brought by that plaintiff involves more than $4.67 million from 435 seller accounts.
An important caution. These are Amazon's allegations. No court has found misconduct, the plaintiff's side is not reflected in the reports we reviewed, and Schedule A suits are not improper as a category. Reports also differ on the exact status of the lead motion, so anyone affected should check the docket directly.
Why This Matters to Small Businesses
Most of the sellers caught in these cases are small operations. Most of the brand owners using them are not household names either. Both sides should take away the same lesson: an intellectual property right is a tool, and courts and platforms are paying closer attention to how it gets used.
Practical Steps for Online Sellers
First, find out who froze your funds. A platform hold and a court order are different problems with different deadlines. If you see a lawsuit or restraining order, treat it as real and act quickly. Missing a deadline can lead to a default judgment.
Second, look up the mark. Search the USPTO database for the registration, the owner, and the listed goods and services. Ask whether your product actually uses that mark, and whether the registration covers what you sell.
Third, do not settle just because a number matches your balance. A settlement should reflect the merits of the claim, not the size of your frozen account. Get advice before you sign anything.
Fourth, keep your records. Save supplier invoices, listing histories, product photos, and communications. If you did nothing wrong, those documents are your defense.
Practical Steps for Brand Owners
First, enforce against real infringement. Tie each claim to a specific product that actually uses your mark, and document it before you file.
Second, make sure your registration covers what you are enforcing. Goods and services listed in a registration matter.
Third, keep settlements honest. Settlement terms that look tied to a seller's frozen balance rather than to the strength of the claim can draw scrutiny from the court and from the platform.
Fourth, choose counsel carefully and supervise the work. The brand owner's name is on the case. If a lawsuit overreaches, the owner may face the consequences, which can include fee requests and claims back.
Where This Goes Next
We expect more clarity as the Chicago judges rule on the pending motions, and as the parties respond to Amazon's allegations. Until then, the practical message is simple. Know your mark, know your product, and keep your paperwork in order, whichever side of the table you sit on.
At Warren Kalyan, we help owners and operators protect their brands and defend themselves when an enforcement action lands on their doorstep. Early advice usually costs far less than late advice.
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General information only, not legal advice for your specific situation.
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