This case generally follows the SAD Scheme template, but with several twists:<\/p>\n
- \n
- it\u2019s in the Western District of Texas, not the more typical N.D. Ill.<\/li>\n
- it\u2019s a copyright claim rather than the more typical trademark claim<\/li>\n
- it\u2019s against a single defendant, not dozens or hundreds of defendants<\/li>\n
- it\u2019s filed by the Valley & Summit Law firm, a relatively new firm (formed 2024) I haven\u2019t encountered before. The firm\u2019s principal says in her bio: \u201cMs. Ouyang started her IP practice by helping cross-border e-commerce stores defend draconian IP lawsuits. Over the years, Ms. Ouyang accumulated abundant experience in the fun area of IP litigation.\u201d Switching sides and bringing SAD Scheme lawsuits is my idea of \u201cfun\u201d too. \ud83d\ude44<\/li>\n
- it\u2019s in front of a new judge, Judge Andrew Bray Davis<\/a>, who just took the bench in April. I\u2019ve previously suggested that recent judges tend to be more skeptical of SAD Scheme cases than judges who have rubber-stamped them for years, though I\u2019m not sure this opinion supports that hypothesis.<\/li>\n<\/ul>\n
Add all of these differences up, and the resulting decision reads a little differently than other SAD Scheme opinions I\u2019ve seen.<\/p>\n
TRO Against Infringement<\/em><\/p>\n
The plaintiff has copyright registrations for \u201ctwo-dimensional artistic works entitled \u2018Bohemian Printing.’\u201d Here is the registered work (left) and an allegedly infringing product (right):<\/p>\n
![\"\"](\"https:\/\/blog.ericgoldman.org\/wp-content\/uploads\/2026\/08\/cai-2.jpg\")
<\/a><\/p>\nThe defendant\u2019s version look similar or identical to the plaintiff\u2019s version except that it omits the outer ring. Judge Davis says \u201ca side-by-side comparison of Plaintiff\u2019s designs and Defendant\u2019s wares reveals little\u2014if any\u2014in the way of differences between the two designs.\u201d<\/p>\n
Judge Davis says the alleged infringement could cause irreparable harm because \u201cdamages fail to address loss of control\u2014as well as damage to reputation and goodwill.\u201d It\u2019s troubling to see a copyright injunction predicated on concerns about the plaintiff\u2019s goodwill, which normally should be the province of trademark law. Even the reputation concern is dubious<\/a>. The judge further conflates this copyright case with trademark law when considering the public interest, saying the \u201cpublic also has a clear interest in not being deceived or confused as to the origin, source, or sponsorship of copyrighted products.\u201d Copyright law generally has little to say about products\u2019 origin, source, or sponsorship.<\/p>\n
Asset Restraint<\/em><\/p>\n
The plaintiff requested an order restraining the defendant\u2019s assets to preserve money to cover damages. Judge Davis rejects the request because \u201cPlaintiff seeks to freeze all of Defendant\u2019s assets without either showing that they are all profits or offering a way to separate the profits from the damages.\u201d Citing Grupo Mexicano, Judge Davis says that asset restraints can only preserve \u201cthe availability of equitable relief in a final judgment.\u201d In copyright cases, profit disgorgement is an equitable remedy, but actual damages are not. Here, the pleadings don\u2019t make an adequate distinction between the two: \u201cPlaintiff offers no evidence of even the rough proportion of Defendant\u2019s assets attributable to infringement, and without it the Court cannot tether an asset freeze to the ultimate equitable relief Plaintiff seeks\u2014the infringer\u2019s \u2018additional profits.’\u201d<\/p>\n
But\u2026the judge has no visibility into how the online marketplaces like Amazon will process the infringement-based TRO. If Amazon suspends the account based on the TRO, the assets will be frozen despite the court\u2019s legal distinction.<\/p>\n
In a subsequent ruling (on July 16), the court orders the asset freeze anyway based on the following report the plaintiff obtained from Amazon (through expedited discovery):<\/p>\n
\n
Defendant has grossed $641,077.99 from 15,136 individual unit sales of 11 different allegedly infringing products over an unspecified time period. Defendant\u2019s U.S. Amazon account held a balance of $1,092.69 when Plaintiff submitted her most recent motion to the Court<\/p>\n<\/blockquote>\n
Sealing Request<\/em><\/p>\n
Judge Davis temporarily accepted the sealing request. It was lifted on July 27, 2026, only after the plaintiff voluntarily dismissed the defendant. This is what the sealed complaint looked like:<\/p>\n
![\"\"](\"https:\/\/blog.ericgoldman.org\/wp-content\/uploads\/2026\/08\/cai-1.jpg\")
<\/a><\/p>\nThe post-dismissal unsealing is likely why I learned about the opinion only now.<\/p>\n
Service Via Email<\/em><\/p>\n
The Second<\/a> and Seventh<\/a> Circuits have limited email service to Chinese defendants. Nevertheless, based on Fifth Circuit precedent, Judge Davis says that email service is in his discretion, and he orders it. \ud83e\udd37\u200d\u2642\ufe0f Sounds like a circuit split needs resolution?<\/p>\n
It is unclear if\/when service was ever effectuated. My guess is that the defendant learned of the lawsuit from Amazon\u2019s asset freeze, and that triggered an extrajudicial settlement regardless of service.<\/p>\n
Request for Expedited Discovery<\/em><\/p>\n
Judge Davis grants that request too.<\/p>\n
Bond<\/em><\/p>\n
The judge approves a $5k bond, which seems quite low based on what the judge knew at the time. I\u2019ve lamented before about the lack of guidelines for bond-setting in ex parte cases.<\/p>\n
The \u201cAddendum\u201d<\/em><\/p>\n
The opinion includes this unusual passage:<\/p>\n
\n
Cases like this one requesting ex parte restraint and expedited discovery under seal\u2014often against numerous defendants listed on a \u201cSchedule A\u201d\u2014are being filed at pace throughout the federal courts. See Eric Goldman, A Sad Scheme of Abusive Intellectual Property Litigation, 123 COLUM. L. REV. 183, 193\u2013202 (2023) (dissecting the proliferation of Schedule A cases and their legal shortcomings). For good reason, some courts have found many of these requests to fall short of the clear letter of the law. See, e.g., Price v. Individuals, P\u2019ships, & Unincorporated Ass\u2019ns Identified on Schedule A., 821 F. Supp. 3d 1315 (M.D. Fla. 2026) (Mizelle, J.).<\/p>\n
Because this specific case involves only a single defendant, it appears to avoid many of the pitfalls present in Schedule A cases. But it is difficult to be sure. \u201cThe whole point of our adversarial legal system is that the robust exchange of competing views helps ensure the discovery of truth and avoid error.\u201d United States v. Quintanilla-Matamoros, 164 F.4th 366, 375 (5th Cir. 2026) (Ho, J., concurring) (cleaned up). Yet Plaintiff in this case, like the plaintiffs in the Schedule A cases, not only demands emergency relief outside of the adversarial process, but likely anticipates seeking a default judgment that is also outside the adversarial process. In these circumstances, it is imperative for courts not only to be vigilant that any relief awarded is lawful, but to be willing to reconsider\u2014sua sponte if necessary\u2014relief already awarded if that relief should not have been granted in the first place.<\/p>\n<\/blockquote>\n
But what if the TRO causes the case to \u201csettle\u201d before the judge gets another crack at it to fix any past errors? The case settled on July 27, 11 days after the court approved the Amazon asset freeze.<\/p>\n
I wasn\u2019t quite sure what to make of this addendum. Was the judge issuing a warning to the plaintiff? Leaving a note to himself? Something else?<\/p>\n
Also, the judge says courts must be \u201cvigilant that any relief awarded is lawful\u201d in ex parte proceedings. Does this opinion adequately demonstrate such vigilance?<\/p>\n
Implications<\/em><\/p>\n
Given the plaintiff and defendant are both in China, I didn\u2019t see any clear reason why the case was filed in W.D. Tex. instead of alternative venues, such as California (where the plaintiff\u2019s lawyers are based) or Illinois (where most SAD Scheme cases are litigated). This looks like forum-shopping, but why W.D.Tex.?<\/p>\n
This is another SAD Scheme case between Chinese plaintiffs and defendants, taking place in US courts. The Chinese plaintiffs prefer the SAD Scheme because US courts will disregard the rule of law even more than Chinese courts would.<\/p>\n
Given that this lawsuit was against a single defendant and was not a high volume operation like a typical SAD Scheme, I didn\u2019t see any legitimate reason why the plaintiff chose the SAD Scheme template over the standard copyright infringement playbook. To me, it\u2019s another datapoint illustrating how the SAD Scheme is functionally displacing all IP litigation. This is because plaintiffs get better outcomes via the SAD Scheme than than they would get from the standard package of rights actually conferred to them via IP and civil procedure law. As the maxim goes, plaintiffs will keep doing it so long as it works. In this case, despite the judge\u2019s quirky addendum, the plaintiff got essentially everything they asked for. So why wouldn\u2019t plaintiffs keep the good times rolling?<\/p>\n
![\"\"](\"https:\/\/blog.ericgoldman.org\/wp-content\/uploads\/2023\/12\/hey-jude-meme-300x200.jpg\")
<\/a>Reflecting the case\u2019s novelty, at least to him, Judge Davis goes through most of the plaintiff\u2019s arguments in greater-than-average detail. Yet, as is typical with ex parte proceedings, he ultimately sides with the plaintiff on most questions. Judge Davis correctly spotted some of the weak spots of the SAD Scheme, and yet arguably the scheme sucked him in anyway.<\/p>\n![\"\"](\"https:\/\/blog.ericgoldman.org\/wp-content\/uploads\/2024\/11\/Stop-the-SAD-Scheme-sign-1024x683.jpg\")
<\/a><\/p>\n