As a matter of policy, Amazon does not allow listings that violate the intellectual property rights of brands or other rights owners. However, being the largest retailer on Earth...

Background

Looking to add to its suite of initiatives to address instances of intellectual property violation within its marketplaces, the (not very catchily named) Amazon Utility Patent Neutral Evaluation Process (Neutral Patent Evaluation) is a trial scheme where owners of a US utility patent may obtain an evaluation of their patent infringement claim against products offered by third-party sellers on amazon.com (a utility patent is the US equivalent to Australia’s standard patent).

Neutral Patent Evaluation appears to be a straight forward and cost-effective mechanism for patent owners to protect their rights (while removing Amazon from the fray).

In essence, the process is as follows. Once a patent owner requests an evaluation, Amazon gives the seller the opportunity to either remove the accused product listing, or to respond to the allegation. Should the seller not respond, Amazon will remove the product listing. If the seller wishes to refute the allegation, both the seller and the patent owner must pay a deposit of US$4,000 to cover the costs of a neutral evaluator (a lawyer specialising in patents), who will decide whether the accused product infringes the utility patent (Amazon does not take a fee). The successful party will have their deposit reimbursed and the unsuccessful party will effectively pay the costs of the evaluator. If an evaluator concludes that an accused product is covered by the utility patent, Amazon will remove the product listing from amazon.com.

To ensure that the Neutral Patent Evaluation is time and cost effective, the evaluation process is limited to one claim of the patent and the parties must follow a strict submission schedule. The accused party is not able to submit invalidating prior art during the evaluation process. Instead, it must show that the asserted patent claim is invalid by providing a finding of invalidity by a court of competent jurisdiction, the USPTO or the US International Trade Commission. The evaluator does not provide reasons if it finds that the patent owner is likely to prove that the accused product infringes.

Practical considerations

Irrespective of the Neutral Patent Evaluation finding, should either party obtain a judgment or order from a competent court to the effect that the accused product infringes the patent, or that the patent is invalid or unenforceable, it may be submitted to Amazon, who will honour such an order by either removing or relisting the product accordingly.

We are watching this with interest to see if the trial scheme becomes a permanent initiative.