Enforcing Patents in Cyberspace: Amazon’s Patent Neutral Evaluation Program Part II – Why the Procedure is So Effective
Amazon has created streamlined procedures that govern the Patent Neutral Evaluation process. In this post, I address how these procedures maximize efficiency while maintaining fairness.
Round I: Invitation to the Party. The entire Evaluation process (in my experience) typically takes no more than about 12-14 weeks from start to finish. But patent owners often can obtain relief even more quickly. After the patent owner has initiated an Evaluation, Amazon contacts sellers of the accused products and it invites them to participate. If the sellers do not RSVP promptly, Amazon de-lists their accused products. In this way, a patent owner may force an infringing product off the Amazon market in just a few weeks. No court can perform that quickly and cost-effectively.
Round II: Pay to Play. If at least one seller agrees to participate, Amazon assigns the matter to a “Neutral Evaluator.” Amazon maintains a list of outside lawyers with patent litigation experience who perform the Evaluator role. Amazon gives the parties one week to deposit funds (currently $4000) with the Evaluator, who then issues a briefing schedule. Sellers who fail to submit that deposit lose their listing for the accused product. This is the second point in which the patent owner may block an infringing Amazon listing before even filing a brief.
Round III: Best Brief Wins. The Evaluation issues are narrowly focused. In each Evaluation, the patent owner may assert only one claim from one patent and may accuse up to 20 products identified by “ASIN” (Amazon Standard Identification Number). Within very limited exceptions, the sellers may not argue that the patent is invalid. Generally, the only disputed issue is whether each accused product infringes the asserted patent claim. The Evaluation procedure does not allow the parties to take discovery, present witnesses, or provide oral argument. The Evaluator decides the issue solely on the briefs (and attached exhibits/illustrations).
Round IV: Loser Pays. At the end of the Evaluation, the Evaluator refunds the winner’s deposit. In effect, the loser pays for the cost of the proceeding.
Evaluations work because the procedure is fast, effective, and low-cost. It also is fair. Accused sellers can defend their products by raising a persuasive non-infringement argument in a low-cost proceeding. While they generally cannot attack patent validity in an Evaluation, sellers have other options for challenging patents (e.g., in IPR proceedings in the U.S. Patent and Trademark Office). And while the Evaluation procedure may seem rushed, the decisions have no effect outside the Amazon market. These decisions cannot stop a seller from distributing accused products elsewhere and they have no precedential value (the parties may re-litigate the “decided” infringement issue in court). Yet, for those who sell patented goods online, the Amazon Patent Neutral Evaluation Program provides a uniquely speedy and affordable infringement remedy.