_________________________________________________

Amazon takes down

Infringing products quickly;

Sellers can’t appeal

_____________________________________________________

Amazon’s Utility Patent Neutral Evaluation (“UPNE”) process is intended to be a fast and efficient method for resolving claims of patent infringement by products listed on the Amazon site.

As Forbes discussed during the beta test of the program back in 2019,

An underhanded tactic used for some time by shady Amazon sellers has been to file a bogus patent infringement claim against another seller, taking them out of action for several weeks or months while they resolve the claim.

______________________________________________

A new beta program that Amazon has devised called the Utility Patent Neutral Evaluation program works to resolve this issue whereby a utility patent owner and accused seller can have their case investigated by a neutral third-party evaluator with expertise in law and utility patents.

Participation in the program is by invitation only. As Amazon explains,

If you are a rights owner with a registered trademark, you may be eligible to enroll your brand in the Amazon Brand Registry. Amazon Brand Registry provides access to powerful tools including proprietary text and image search, predictive automation based on your reports of suspected intellectual property rights violations, and increased authority over product listings with your brand name.

The program works as follows, and only applies to utility patents (not design patents):

• The patent owner submits an Amazon Utility Patent Neutral Evaluation Agreement for the Amazon Standard Identification Number (ASIN) at issue.
• Amazon sends this agreement to every seller on the platform offering this ASIN.
• Sellers can either remove their products from the platform or agree to be bound by the agreement.
• Each of the parties pays $4,000 to a neutral evaluator selected by Amazon.
• The evaluator sets a briefing schedule.
• The patent owner gets three weeks to submit the first round of arguments. The other sellers have two weeks to respond.
• The patent owner then has one week to submit an optional reply.
• The evaluator then has two weeks to make a decision. The evaluator only needs to provide reasons if the decision is in favor of the patent owner.
• If the evaluator decides in favor of the seller, the product stays on the platform.
• If the evaluator decides in favor of the patent owner, Amazon removes to product from the platform.
• The successful party gets its deposit back, and the amount deposited by the losing party is paid to the evaluator.
• There is no appeal process, but either party may file a federal lawsuit if they’re not happy with the results.

As the National Law Review notes,

sellers who have either ignored or not taken a UPNE seriously have found their products suddenly banned from Amazon’s website, leaving them with no recourse other than to file a declaratory judgment action in federal court and request relief that is typically far from quick or certain.

One such case is Tineco Intelligent Technology Co., Ltd.’s declaratory judgment action against Bissell, Inc. for noninfringement and invalidity.

As the National Law Review describes,

Amazon had notified Tineco, a Chinese company that manufactures and sells portable vacuums on Amazon, that Bissell had commenced a UPNE. Tineco then had three weeks to indicate whether or not it wished to contest Bissell’s claim. Tineco apparently ignored Amazon’s e-mail, however, resulting in Amazon automatically imposing “default judgment” against Tineco and removing their accused products. Unlike in Court, either party’s failure to meet Amazon-imposed deadlines in a UPNE result in termination of the proceeding in favor of the other party. Even worse for Tineco, Amazon’s removal of Tineco’s products is not reviewable, as Amazon has no official internal appeal process.

Tineco’s only option was to bring a declaratory judgment action against Bissell in federal court and seek a TRO.

Contrary to its usual procedure, Amazon allowed Tineco to continue selling while the case was proceeding in court.

As the National Law Review notes,

Only one court so far has enjoined a UPNE, but that was before the UPNE was decided, and only because a patent infringement case on the same patent claims was already pending before that court.

The bottom line is that sellers need to take UPNE notices seriously if they want to remain on the Amazon platform.

Just like the haiku above, we like to keep our posts short and sweet. Hopefully, you found this bite-sized information helpful.