Three Ways to Use Patents on Amazon to Address Infringement Problems
Although online marketplaces like Amazon provide brands unprecedented growth opportunities, they also give a similar advantage to brand competitors and unauthorized sellers by offering an inexpensive and easy forum to market copycat, competitive, counterfeit, and grey market products. The Vorys eControl Marketplace Solutions Blog has written extensively about how brands can use their trademark rights to protect their reputations and goodwill from the unauthorized sale of counterfeit and grey market products. Brands can also use their patent rights to protect against competitors marketing copycat and competitive products that infringe their patent rights on Amazon. Amazon offers three processes for addressing patent infringement on its marketplace, each with its own advantages and disadvantages. When deciding which Amazon process to use, it helps to understand the types of infringing products at issue and the basics of patent law. Copycat products are infringing products that look like or function similarly to a brand’s products and fall within the scope of the brand’s patent claims. Competitive products are those that are offered by a competitor that may not be an intentional copy, but are still infringing because they fall within the scope of the brand’s patent claims.
Unlike trademarks, which protect a product’s branding, patents protect the innovative structural, functional, or aesthetic aspects of a product. Using patents as a means to stop bad actors on Amazon makes sense primarily when a problematic product functions like the branded product, but is not necessarily being used with the brand’s trademarks and is not simply a grey market product. The U.S. offers three types of patents: (1) utility patents, (2) design patents, and (3) plant patents (which are outside the scope of this discussion). Utility patents protect the functional and structural aspects of an innovative product. Design patents protect the exterior look of a product. Every patent concludes with claims. Patents give their owners the right to exclude others from practicing the invention as defined by the claims, which define the patent owner’s property rights. The claims are what are compared against problematic products to determine infringement.
Amazon purports to take infringement of brands’ intellectual property rights seriously. In practice, enforcing intellectual property rights, especially patent rights, through Amazon’s intellectual property violation procedures can be frustrating. There are three processes for enforcing patents through Amazon, which allow brands to take a scaled approach to patent enforcement on the marketplace.
1. Report Infringement Form via Amazon
The Report Infringement Form may be submitted to Amazon by the patent owner or the owner’s agent with a regular Amazon account. This form may be used to assert a brand’s patent portfolio, including both design and utility patents, against infringing ASINs, such as copycat products, counterfeit products, and competitive products that include all of the elements of the asserted claims (patents cannot be used against grey market products). If Amazon agrees with the patent owner, the products associated with the challenged ASINs will be removed. If sellers relist the removed products under a new ASIN, which is possible, the patent owner will need to submit additional forms against the new ASIN, potentially on repeat. However, such relisting is a violation of Amazon marketplace rules and, when identified, should be addressable by reporting the marketplace violation.
One advantage of this procedure is that the form is relatively simple. A major disadvantage, however, is that the brief description of the infringement is limited to 1,000 characters, and the patent owner cannot attach or link to documents such as claim charts or annotated images. Thus, this procedure may be more useful for design patents than utility patents because the infringement statement is much simpler.
Other major limitations of the Report Infringement Form is that the patent owner is unable to track its progress and, after the form is submitted, the patent owner does not have an opportunity to escalate the infringement allegation unless Amazon requests additional information. Amazon states that its personnel make decisions on infringement within one to two days, but our experience is that these decisions may take a week or longer.
2. Report a Violation via Brand Registry
Patent owners with a Brand Registry account can report violations of their design and utility patent rights via the Report a Violation link in Brand Registry. Similar to the Report Infringement Form, submissions via Brand Registry may be used to target copycat products, counterfeit products, and competitive products that include all of the elements of the asserted claims. If Amazon agrees with the patent owner, the product listings will be removed. If a seller relists the product under a new ASIN, the patent owner will have to make a new submission against the new ASIN.
Reporting patent infringement violations through Brand Registry differs from violations reported with the Report Infringement Form in three important ways. First, the brief description of infringement may be up to 3,000 characters in length, which can be especially useful when asserting infringement of a utility patent. Second, Brand Registry submissions can be tracked and, if initially unsuccessful, can be escalated with a follow-up submission. Third, the text of the escalated submission is not subject to a character limitation and the patent owner can upload attachments, such as a claim chart that illustrates how the product listing includes each claimed element.
3. Utility Patent Neutral Evaluation Pilot Program
In 2019, Amazon started its Amazon Utility Patent Neutral Evaluation Procedure (UPNEP) pilot program. The program appears to be more robust than the infringement reporting mechanisms already discussed while remaining a relatively low-cost and quick process through which patent owners can assert utility patents against third-party product listings. Currently, participation is by invitation only but Amazon has reportedly extended invitations to some brands that have asked to participate.
UPNEP allows the patent owner to assert a single claim from a single unexpired U.S. utility patent against one or more ASINs (must be physically identical products) being sold on Amazon. It cannot be used to enforce design patents or foreign patents, and it expressly may not be used against products sold directly by Amazon (including 1P products), which account for about 50% of sales on Amazon. However, if Amazon is selling the products with the same ASINs as those that have been found to likely infringe a patent under the evaluation procedure, one can imagine Amazon will take note and evaluate whether it needs to stop its direct sales of that product.
To get the process started, the patent owner submits to Amazon an Amazon Utility Patent Neutral Evaluation Agreement, specifically Exhibit 1 to that Agreement, that identifies the patent, the asserted claim, and the ASIN for each accused product. Amazon then sends Exhibit 1 to each seller associated with the ASINs identified, and the sellers are given three weeks to sign and return the agreement to Amazon if they wish to participate in the UPNEP. If any seller fails to return the agreement within the allotted time or does not comply with the agreement, Amazon will remove that seller’s product listings associated with the accused ASINs. If the sellers choose to participate, they submit their portion of the evaluation Agreement, Exhibit 2, identifying their corporate parents, subsidiaries, and related entities and selecting the particular ASINs for which they will participate in the UPNEP. Upon receipt, Amazon selects an evaluator (who is notably not affiliated with Amazon) who will decide whether the patent owner is likely to prove that the accused products infringe the asserted patent claim. The neutral evaluator is an attorney who has patent expertise.
The patent owner and each participating seller are given two weeks to pay $4,000 to the evaluator to cover the evaluator’s fee. If the patent owner fails to do so, any money submitted by the sellers will be returned. If a seller fails to pay the fee, Amazon will remove its listings. After the fees are deposited, the neutral evaluator sets a briefing schedule for the parties. The proceeding is based solely on written submissions, with no hearing or trial in front of the evaluator. The patent owner is given 21 days to submit its initial arguments, the sellers are given 14 days to respond, and the patent owner is then given seven more days to reply. Each participant has a strict page limit for their written arguments, and sellers are limited to certain defenses.
Within 14 days of the due date for the patent owner’s reply, the evaluator will issue his or her decision as to whether the patent owner is likely or not to prove that the claim is infringed. If the decision is that the claim is likely not to be proved infringed, the evaluator will provide a brief explanation. Otherwise, the evaluator will provide no further explanation of the decision, and there is no process for appealing or requesting reconsideration. Amazon will remove listings of accused products where the evaluator finds that the patent owner is likely to prove infringement. Generally, Amazon will do so within 10 days of receiving the evaluator’s decision. Upon completion of the evaluation procedures, the winner’s deposit is returned while the loser’s funds are kept by the evaluator to cover its fee. Importantly, Amazon does not receive any portion of the evaluation fee. Regardless of the outcome, nothing in the UPNEP prevents either the patent owner or the sellers from pursuing legal action in other channels.
Key to success in any of these patent procedures is using a patent that clearly covers the accused products. Identifying that patent, especially if part of a massive portfolio, can be challenging. Identifying the potentially infringing products is also difficult, and Amazon has no formal means by which to accomplish this. Vorys has developed processes that address both of these issues – finding the patent to assert and identifying the infringing products that are having the greatest impact on your sales – to help brands efficiently assert their patent portfolios against infringing products sold on Amazon.
Read more about these Amazon processes and how to identify and enforce your patent rights in our recently published white paper: https://econtrol.vorys.com/patent-strategies.