Sellers should be protected on Amazon. This usually refers to the protection of IP owners or brand protection from IP infringements by other sellers. But it also means the protection of Amazon sellers from bogus IP infringement claims made by brand owners.
Some sellers are taken down unfairly by bogus IP infringement complaints, while brands still struggle to enforce their rights. This happens with utility patents as well as other types of intellectual property.
In 2019, Amazon suggested a new plan: Utility Patent Neutral Evaluation Procedure. The program is designed to resolve disputes regarding patent infringement related to products sold on Amazon (“accused products”). This is done through a neutral third-party evaluator appointed to investigate the situation and make a decision quickly and efficiently.
This may prove helpful in gaining IP protection for patent owners while putting an end to the misuse of the Amazon IP protection system in regards to utility patents.
What is Amazon’s patent infringement procedure?
Currently, a patent owner can turn to Amazon and follow a takedown process. Amazon reacts accordingly, but when IP disputes arise, it doesn’t get involved. For example, patent issues may be subtle or complicated and difficult to determine, making it more challenging for Amazon to resolve, and making Amazon less likely to decide on an immediate action.
In case of a dispute, Amazon would generally remove the product in question from its e-commerce platform, while the two sides fight or work to find a solution.
Even in simple cases, false claims and accusations may hurt the legitimate IP owner. For example, a patent owner may file a legitimate infringement report through the Brand Registry. After the infringing listing is taken down, the other seller may claim there is no infringement since he is buying from the real patent holder. If this seller makes a strong claim, even a false one, the legitimate IP owner may be punished by Amazon until the dispute is resolved.
This situation easily results in one party turning to the courts for protection.
Patent owners who seek patent protection may have to file a suit in a federal district court or the U.S. International Trade Commission in an attempt to enforce their patent rights. This is usually a very expensive way that takes years. Moreover, the IP owner typically has to file a separate case in court for each alleged product infringement.
In cases where patent owners misuse their IP rights against other sellers, the product is often taken down until the issue is resolved. To fix that, sellers may have to turn to federal courts for a declaration stating that the product does not infringe on the patent in question. This is an expensive process. In addition, patent owners can file a counterclaim alleging seller has infringed on their right, even if this claim is not made in good faith.
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How would the Neutral Patent Evaluation process work?
Amazon’s Patent Neutral Evaluation Procedure provides a time- and cost-efficient way to resolve patent infringement disputes for owners of U.S. utility patents. This is a voluntary procedure, and provides an arbitration tool for patent owners to obtain brand protection through fast evaluation of patent infringement claims relating to potentially infringing products listed by sellers on Amazon.
The patent owner may use this procedure with up to 50 ASINs (Amazon Standard Identification Numbers used to identify products on Amazon) per patent.
After the patent owner submits the Evaluation Agreement, Amazon notifies each seller offering the ASIN on Amazon that there is an evaluation regarding their products. Each seller can then either agree to participate in the evaluation or have his listing removed. In case one or more sellers agree to take part in the Evaluation, Amazon selects a neutral lawyer as evaluator.
In this case, the patent owner has 21 days to submit his arguments, the sellers have 14 days to respond, and the patent owner may reply within 7 days. After that the evaluator has 14 days to reach a yes/no decision. There is no discovery, trial or hearing.
The service costs a fixed fee of $4,000 paid to the evaluator by all parties. However, if the evaluator decides in one party’s favor, the fee is returned, and he retains that other party’s fee for his services.
If the evaluator’s decision is in favor of the patent owner, Amazon will take down the accused product(s). If his decision is in favor of the seller, the product will remain on Amazon.
The fee and the number of days set for each step of the evaluation makes it a quick and relatively inexpensive way to resolve disputes regarding infringement of utility patents on Amazon, especially for small and medium-sized patent owners. The program is particularly beneficial for right owners whose patents are being infringed by many products from different sellers, especially foreign-based sellers (many China-based) that are difficult to serve as required for court proceedings.
It’s also important to note that although there is no appeal process, this procedure does not affect either party’s right to turn to federal court later.
Concerns Regarding Amazon’s Neutral Evaluation
This procedure by Amazon is a step in the right direction, providing a tool for patent protection. Such a system should be beneficial to sellers and IP owners and even Amazon’s customers.
Yet it’s currently limited to alleged infringement of utility patents only. Utility patents are invention patents for a new or improved product, process, or machine that is useful. It does not cover design patents, where it’s also needed.
Currently, the evaluation procedure is by invitation only, and it’s not clear how many of the utility patent infringement claims are getting resolved through the program.
In addition, we hope that malicious sellers will not use this against competitors who will either be forced to respond or lose their product listing.
Wiser on Amazon
Wiser Market can help you protect your brand on Amazon. Our online brand protection agency works closely with Amazon, as well as other marketplaces, websites and social media channels.
Our state-of-the-art monitoring system continuously scans Amazon and other online channels for IP infringements. Once we find a potential IP infringement, our experts analyze the best course of action and we work to take down any infringing listing or IP violation by applying the best available procedures.
Our effective online brand protection strategy defends your brand’s intellectual property, revenue and reputation, resulting in an over 90% success rate.
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