Amazon Seller News & Suspension Alerts (2026) | AMZ Sellers Attorney® Blog

The Typical Scenario

A seller lists a bundle of enamel pins, stickers, patches, or charms sourced from a wholesale supplier. Months later, a copyright owner files a Schedule A lawsuit naming dozens of storefronts. Amazon freezes the account, and a demand letter arrives citing the $150,000 statutory maximum and asking for $25,000 or more to settle.

What the letter usually leaves out is that only one design in a bundle of twelve or sixteen is accused. It also rarely says when the work was registered.

1. Statutory Damages Are Per Work, Not Per Sale

Under 17 U.S.C. § 504(c)(1), the copyright owner may elect statutory damages of $750 to $30,000 for all infringements involving any one work. Selling 3,000 bundles containing one accused design is still one work.

The award can rise to $150,000 only if the owner proves willful infringement. The court may reduce the award to as little as $200 if the seller proves it was not aware and had no reason to believe its conduct was infringing. 17 U.S.C. § 504(c)(2). The amount within the range is decided by a jury. Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340 (1998).

Practical point: A demand above $30,000 for a single work assumes a willfulness finding. For a reseller that bought finished goods from a supplier's catalog, that assumption deserves a challenge.

2. Ask for the Registration First

Under 17 U.S.C. § 412, statutory damages and attorney's fees are not available for infringement that began before the work was registered, unless registration was made within three months after first publication.

Before discussing numbers, ask the claimant for:

• the registration certificate and effective date of registration;
• the date of first publication;
• the deposit copy and chain of title; and
• any license agreements showing what the owner actually charges for the work.

If § 412 applies, the claimant is limited to actual damages and apportioned profits and must pay its own lawyers. That changes the settlement math dramatically.

3. Apportionment: The Owner Gets Only What the Accused Design Earned

Under 17 U.S.C. § 504(b), the owner may recover only the infringer's profits attributable to the infringement. The owner proves gross revenue, and the seller proves its deductible expenses and the portion of profit caused by other factors. Where the accused material is one part of a larger product, profits must be apportioned. Sheldon v. Metro-Goldwyn Pictures Corp., 309 U.S. 390 (1940).

A simple illustration

Consider a hypothetical 16-pin bundle that sells 3,000 units for $35,000 in gross revenue:

A $25,000 or $35,000 demand is measured against that figure, not against gross sales.

4. Willfulness Is Not Automatic

Willfulness requires knowledge of infringement or reckless disregard. A seller that bought finished goods from a supplier's standing wholesale catalog, did not design or commission anything, and never heard of the claimant has strong facts against willfulness.

Keep your supplier invoices, catalog pages, and purchase records. They are often your most important evidence. Note that if the original work carried a proper copyright notice that the seller had access to, the innocent-infringer reduction to $200 may be unavailable. 17 U.S.C. § 401(d).

5. Liability Is Not a Given

Copying alone is not enough. The owner must also show substantial similarity in protectable expression. Stock ideas, such as a cartoon dinosaur or a common comic concept, are not protected by themselves. Only the owner's original expression is compared. Ask the claimant to identify, by image, the exact design it claims is infringed.

6. When the Demand Goes Up After You Counteroffer

A tactic we see in Schedule A cases goes like this: the claimant opens at $25,000, the seller responds with a detailed, good-faith counteroffer, and the claimant replies with boilerplate and a higher demand of $35,000. Nothing new supports the increase.

That is not negotiation. It penalizes the seller for engaging, and it shows the number was never tied to the value of the claim. The right response is to:

• point out the escalation in writing;
• restate the unanswered questions about registration, the accused design, and licensing;
• lay out the real sales and apportioned profit figures; and
• make a reasoned counteroffer with a firm deadline and clear release terms, including dismissal with prejudice, withdrawal of the platform complaint, and release of any account restraint.

Put all of it under Federal Rule of Evidence 408. A clear record of reasonableness matters if the case goes further.

7. What Not to Do

• Don't ignore the lawsuit. Schedule A defendants who don't appear risk default judgments and continued account freezes.
• Don't pay the opening demand without checking registration timing and apportioned profits.
• Don't send your raw sales reports without advice. An accurate summary, under Rule 408, is usually enough to negotiate.
• Don't keep selling the accused design once you have notice. Continued sales can support a willfulness argument.