Enforcing Patents in Cyberspace: Amazon’s Patent Neutral Evaluation Procedure Part I - Introduction
In the beginning, there was no good way to stop overseas sellers from knocking off patented products on the Amazon marketplace. To address this problem, Amazon in 2019 quietly launched (in beta version) an internal dispute resolution program called the “Amazon Utility Patent Neutral Evaluation Procedure” to resolve infringement disputes between sellers. That procedure initially was limited to utility patents (which claim inventions—as opposed to design patents, which claim ornamental designs). Amazon has not yet promoted the program publicly and few lawyers have experience in this new patent dispute forum. Nonetheless, this program offers an immensely valuable tool for retailers who sell their patented products online.
Historically, patent owners plagued by online infringers had few enforcement options. They could sue in federal district court, but those lawsuits are slow, expensive, and typically ineffective against foreign infringers (who generally lie beyond the district courts’ jurisdictional reach). They also could sue foreign infringers in the International Trade Commission (ITC), which has authority to block infringing imports. But ITC lawsuits take well over a year and can cost millions of dollars.
The Amazon Utility Patent Neutral Evaluation Procedure departs radically from these traditional enforcement models. The Amazon Evaluation Procedure, unlike a district court or ITC lawsuit, is fast, inexpensive, and effective. No other patent enforcement option comes close. Evaluation proceedings take weeks, not years, and the cost is trivial compared to the expense of a district court or ITC lawsuit. Likewise, Amazon Evaluations provide powerful relief that is akin to a permanent injunction. When an infringing seller loses (or forfeits) an Evaluation, Amazon promptly removes the infringing product listing, thereby taking that product off the Amazon market.
As I’ll explain in later posts, Amazon designed this procedure to balance fast, inexpensive, and effective patent enforcement on the one hand, with procedural fairness to all parties on the other. Amazon continues to tweak and improve the process to increase its efficiency and to prevent participants (patent owners and accused sellers alike) from manipulating the rules to game the system. Amazon recently has expanded the program by creating an Evaluation procedure to resolve certain design patent disputes as well.
Patent owners and accused infringers who participate in the Amazon Patent Neutral Evaluation program are best served by lawyers familiar with U.S. patent law who not only are skilled legal writers but also have experience applying the program’s procedural rules.