Amazon Unveils Its Utility Patent Neutral Evaluation Procedure

Amazon has recently implemented a relatively inexpensive procedure to address allegations of patent infringement relating to products sold on the world’s largest e-commerce site. Historically, the primary vehicle for redressing patent infringement was through filing suit in federal district court or the International Trade Commission (“ITC”), a proposition that is extremely costly. Moreover, such proceedings typically take years to litigate to their conclusions. Furthermore, for district court proceedings, the patent owner generally must file a separate case for each accused product. The Amazon Utility Patent Neutral Evaluation Procedure addresses these concerns, providing a cost-efficient means for aggregating infringement disputes and resolving them in a timely manner.

For the bargain price of $4,000, the patent owner can request that a neutral patent evaluator determine whether up to 50 separate products sold on Amazon infringe a claim of its patent. The best part: if the patent owner is successful in persuading the evaluator that infringement occurred, the $4,000 fee is returned.

To initiate the Evaluation, a patent owner submits a bare-bones complaint that identifies up to 50 Amazon Standard Identification Numbers (“ASINs”) that potentially infringe a single claim of a single utility patent. Amazon then notifies the sellers that their products are the subjects of the Evaluation. If a seller opts to participate in the Evaluation, it must execute an agreement to participate in the proceedings within three weeks of receipt of the notice. If a seller opts not to participate or fails to return the agreement to participate in the proceedings, the listing of the accused product is removed from Amazon.

If any sellers agree to participate in the Evaluation, a neutral evaluator is selected by Amazon. Each participant—the patent owner and the participating sellers—are required to submit $4,000 to the evaluator within two weeks. Critically, if a seller does not submit $4,000 within the designated time frame, the seller’s listing is removed from Amazon.

Thereafter, the evaluator establishes a briefing schedule for the parties’ arguments. Generally speaking, the patent owner will have 21 days to submit a brief with its initial infringement arguments, the sellers will have 14 days to respond, and the patent owner will have 7 days to reply. There is no discovery, no hearings, and no trial. The evaluator must reach a decision on infringement within 14 days of the reply brief.

Upon a determination of infringement by the evaluator, the listing of the accused product is removed from Amazon. As noted above, if the evaluator sides with the patent owner on infringement, the patent owner’s $4,000 fee is returned to it, and the evaluator retains the $4,000 paid by the seller. On the other hand, if the evaluator concludes the patent owner is not likely to prove infringement, the seller’s $4,000 fee is returned to it, and the evaluator retains the funds paid by the patent owner.

In sum, the Amazon Utility Patent Neutral Evaluation Procedure is a quick and relatively cheap way to address infringement of utility patents by products sold on Amazon. The entire process takes mere months. Aside from the potentially refundable $4,000 fee to participate in the Evaluation, the only other fees are those a participant may pay to counsel for preparation of briefs, should the participant wish to retain an attorney. This price tag is a bargain particularly for patent owners whose utility patents are being infringed by numerous products from multiple sellers, many of whom may be located overseas and would be difficult to serve with process in federal court litigation.

If you are a seller on Amazon and are interested in learning about how Stites & Harbison can assist you with Amazon’s Utility Patent Neutral Evaluation Procedure, please contact Melissa Smith or Joel Beres.