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Utility Patent Neutral Evaluation Procedure

Amazon.com’s Utility Patent Neutral Evaluation Procedure (UPNEP):
What to Do When You Receive an Infringement Notice or Need to Bring a Claim

Technology has allowed companies to provide instant satisfaction to their customers. Driving to the store, finding parking, and waiting in line has been replaced with sitting in bed, ordering goods on your phone and receiving them the next day- sometimes even within hours! Companies, such as Amazon.com, have been able to provide channels for small businesses to reach customers in the national market.

Amazon.com CEO Jeff Bezos recently praised this “small business” aspect of online shopping, admitting that 58% of Amazon’s total sales are attributed to independent third-party sales, mostly comprised of small businesses with less than 5 employees. However, this rise in third party sellers consequently led to a rise in sales of counterfeit and/or infringing goods. In an attempt to combat this, Amazon Marketplace recently launched its Utility Patent Neutral Evaluation Procedure (UPNEP).

How Amazon.com’s UPNEP Works:

According to Amazon.com, its UPNEP systerm will solve individual patent infringement claims in an individualized few-month timeline. Amazon’s representatives explained that if a company believes a certain product for sale on Amazon Marketplace infringes its patent, the company can request an evaluation by providing Amazon.com the underlying information and support, as well as $4,000 to evaluate the claim.

One of two things can happen next – if the accused seller does not dispute the accusation of patent infringement, Amazon terminates the infringing products from the marketplace while refunding the $4,000 to the patent owner. The second option, and the most prominent one, occurs if the accused seller opts to fight the allegations of infringement. In this scenario, the seller also deposits $4,000 for purposes of fighting the allegation of patent infringement.

Under the second option, namely, the challenge to the claim of patent infringement, Amazon.com (once both payments are secured) will assign an intellectual property lawyer with patent expertise to resolve the infringement quarrel. The patent owner submits an opening brief, followed by the sellers filing a response. If the patent owner wishes, he or she may also submit a reply to the response.

A caveat in the process is that the patent owner, who has paid Amazon.com the $4,000, is only permitted to assert one claim from the patent against the product. On the other side, the merchant’s defenses can only include (a) its non-infringement contentions regarding asserted claim, or (b) invalidity of the asserted patent due to a judgement or order by the USPTO, a U.S. Court or International Trade Commission (ITC). Without either of these limited defenses, an accused seller’s only other option is to prove to Amazon.com that the alleged infringing product has been on sale for a year or more before the asserted patent’s filling date.

Once Amazon.com’s intellectual property lawyer reviews all the submissions, he or she decides whether patent infringement has occurred. If the lawyer finds in favor of the patent owner, the accused product will be taken down by Amazon.com. Additionally, only the prevailing party is refunded the $4,000 at the conclusion of the evaluation. Lastly, Amazon does not provide for an appeal, nor a reconsideration.

Take-Aways from Amazon.com’s UPNEP Protocol:

Although Amazon.com’s attempt at combatting patent infringement is commendable, there are several potentially alarming problems and associated pitfalls that can arise. Large companies with unlimited resources can try to exploit UPNEP by using frivolous patent claims knowing that a majority of small businesses can’t afford the $4,000, leaving them with no fighting chance. Another question begs – Will the lawyers being contracted by Amazon.com to evaluate potential infringement claims be impartial, and/or will they be influenced by the online retail giant’s
interests?

Amazon.com’s rules do not preclude patent owners and sellers disappointed with the results of the UPNEP evaluation from commencing a federal court action for patent infringement. But why wait to be disappointed and lose out on $4,000 before contacting an intellectual property attorney?

A Florida Patent Attorney can help bring patent infringement actions other merchants before Amazon.com – as well as defend claims under its UPNEP system.

If you are aware of items on Amazon.com that infringe on your utility patent, or have received an infringement notice from another Amazon.com merchant, contact one of our experienced Florida Patent Attorneys today at 305-374-8303 to discuss your rights.