Amazon.com has introduced a new non-profit procedure that allows patent owners to take down listings of infringing goods. Amazon’s Utility Patent Neutral Evaluation Program lets owners of a US utility patent obtain a quick evaluation of patent infringement from a US patent attorney. If the attorney agrees that the item being sold in the product listing infringes the patent, and the patent is prima facie valid, then Amazon will remove the product listing from Amazon.com.
Online shopping is growing significantly year on year, and is expected to reach 15% of total retail sales by 2020. This shift away from traditional bricks and mortar shops has brought with it new challenges for IP rights holders. Amazon is the world’s largest e-commerce marketplace and so if a company’s IP rights are being infringed on Amazon then this can have a significant financial impact on the company.
For some time now Amazon has had a procedure for proprietors of trade mark registrations to notify Amazon of unauthorised use of a registered trade mark. However, this procedure doesn’t apply to patents. Consequently, the usual way for a patent proprietor to have an infringing product listing removed from Amazon is through the courts, which brings with it significant costs.
The Utility Patent Neutral Evaluation Procedure is a process that allows a patent proprietor to remove listings of infringing products from Amazon.com without requiring a court decision.
Under the process, an owner of a US utility patent can request a review of patent infringement by an item in a product listing. This review is carried out by a neutral evaluator, who is an experienced US patent attorney not employed by Amazon. The procedure initially involves an exchange of short written arguments between the patent proprietor and the alleged infringer. The neutral evaluator then makes a decision on infringement, based on the arguments submitted by the two parties and their own interpretation of the facts. If the neutral evaluator decides that the item in the product listing is likely to infringe the patent then the product listing is removed from Amazon.com. If the neutral evaluator decides that the item in the product listing likely does not infringe the patent then the product listing is not removed from Amazon.com.
The main advantages of the Utility Patent Neutral Evaluation Procedure are in timescale and cost. The process is expected to take just eight to ten weeks and the cost is only $4,000, which is paid by the losing party and covers the costs of the neutral evaluator. It is notable that Amazon does not take a fee.
It is believed that the Utility Patent Neutral Evaluation Procedure is currently only in a trial stage and so it remains to be seen whether it is adopted long term, or whether Amazon decides to expand it out to other countries such as the UK. These decisions will probably rely on user feedback from patent owners, sellers and the attorneys used as neutral evaluators. Also of interest is whether other large e-commerce platforms such as eBay will adopt a similar patent evaluation procedure, and, in the long term, how the legal system will respond to patent owners effectively seeking patent enforcement outside of the normal court structure.
Amazon’s Utility Patent Neutral Evaluation Procedure may prove to be another useful tool in preventing infringers undercutting sales of a patent owner’s protected products, but it remains to be seen how effective it is in practice. We will keep you updated.
If you would like to discuss how we can develop an IP strategy to help protect your new products from being copied, or for more information about patent applications and other forms of intellectual property protection, please contact us.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.