Amazon flags potential abuse of mass trademark infringement lawsuits

Retailer seeks to pause court-ordered fund transfers as it investigates whether Schedule A litigation was used to access frozen seller accounts

Amazon is seeking to halt court-ordered transfers of seller funds in more than two dozen trademark infringement cases in Chicago federal court, alleging that some proceedings may have been used to obtain money the retailer had frozen for reasons unrelated to the disputes.

In filings before the US District Court for the Northern District of Illinois, Amazon has asked judges to stay orders directing it to transfer money from sellers’ marketplace accounts to companies claiming their trademarks have been infringed.

The retailer, which is not a party to the underlying infringement actions, says it has identified patterns that raise concerns about potential collusion between plaintiffs and defendants to circumvent independent account restrictions.

Amazon’s allegations have not been established as judicial findings. However, the filings raise questions about the use of so-called Schedule A litigation, a widely used mechanism for pursuing alleged intellectual property infringement against large numbers of online sellers.

Amazon identifies suspicious settlement patterns

Amazon’s initial review of four cases involving NextClimb Investments LLC reportedly covered more than $4.67 million in transfers involving 435 seller accounts, according to a court filing described by Cook County Record.

The company said its investigation had also identified potentially similar activity in cases involving other plaintiffs and at least four additional plaintiffs’ law firms. Amazon has not publicly identified all the parties it is investigating, and the full scope of the review remains unclear.

One concern involves settlement amounts that allegedly match the entirety of a seller’s funds restrained by Amazon, down to the cent. In the NextClimb proceedings, Amazon cited settlements of $14,780 with one seller and $7,953.26 with another. The retailer questioned whether these amounts had been negotiated on the merits of the trademark disputes or determined by the balances available in the sellers’ accounts.

Amazon also highlighted an apparent disconnect between the trademark rights asserted by NextClimb and the products offered by certain defendants.

According to the filing, NextClimb claims rights relating to HVAC vent covers, while some of the sellers named in the litigation allegedly offered products including do-it-yourself Christmas ornament kits and platform boots.

Amazon said its review had not identified sales or listings by those sellers involving HVAC vent covers or other products bearing the asserted NEXTCLIMB mark. It argued that the apparent mismatch raised questions about the factual basis for naming the sellers as defendants and the resulting settlements.

These concerns form part of Amazon’s stated basis for requesting additional time to investigate before the disputed funds are transferred.

The role of Schedule A litigation

Schedule A lawsuits allow intellectual property owners to pursue claims against multiple alleged infringers in a single proceeding. They are frequently used in US anti-counterfeiting litigation involving online marketplaces and sellers accused of offering products bearing unauthorized trademarks.

Brand owners may seek emergency relief, including temporary restraining orders and preliminary injunctions, to prevent alleged infringers from moving assets while proceedings are underway.

Courts can also issue orders directing marketplaces to transfer funds held in sellers’ accounts to plaintiffs. These orders can provide a route to compensation, but they also place third-party platforms in the position of implementing judicial decisions in disputes to which they are not parties.

Amazon’s latest motions focus on whether some of these transfer orders may have been obtained through settlements that warrant further scrutiny. The company argues that sellers or people acting on their behalf may have used the litigation process to recover money already frozen under separate marketplace enforcement measures.

The allegations do not establish that Schedule A litigation generally is improper, nor do they demonstrate that the underlying trademark claims in the cases under review are invalid.

Courts begin considering Amazon’s requests

Amazon has filed motions seeking stays in more than two dozen cases in the Northern District of Illinois, according to Cook County Record. Judges have granted stays in a number of proceedings, while the status of individual motions varies.

In one case, NextClimb Investments LLC v. The Partnerships and Unincorporated Associations Identified on Schedule A, case No. 1:26-cv-06020, Amazon filed an unopposed motion on October 6, 2026, seeking a temporary stay of enforcement of a fund-transfer order. The docket records an order on the motion dated October 7.

The underlying trademark action had already resulted in a default judgment on October 2. The subsequent stay request concerned enforcement of the transfer order, rather than a determination that the trademark claims were unfounded.

The distinction is important: a stay can preserve the position while concerns are investigated without deciding whether the alleged infringement occurred or whether the settlement was improper.

Implications for trademark enforcement

The dispute highlights the tension between efficient anti-counterfeiting enforcement and safeguards against potential misuse of legal procedures. For brand owners, Schedule A litigation can offer a practical way to pursue alleged infringers operating across multiple online storefronts. For sellers, asset restraints and account freezes can have immediate commercial consequences, particularly when marketplace funds are needed to operate a business.

Amazon’s filings also raise questions about the scrutiny applied to settlements and fund-transfer requests, especially where the amounts correspond precisely to restrained account balances or the products identified appear unrelated to the asserted trademark rights.

For trademark practitioners, the proceedings could prompt closer attention to the evidence connecting defendants to the alleged infringement, the basis for settlement amounts and the circumstances in which courts direct third-party marketplaces to release funds.

Amazon’s investigation remains ongoing, and the allegations should not be treated as proof of collusion or misconduct. The courts’ handling of the requested stays, and any subsequent findings, may nevertheless have implications for how fund-transfer orders are sought and reviewed in mass trademark litigation.

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