If you’ve been selling on marketplaces for any length of time, you’ve undoubtedly heard about a merchant who’s received an IP infringement notice from a brand, manufacturer or competitor. Often times these IP infringement claims are fully justified, but there are also instances where it’s simply a competitor who wants to eliminate the competition and unless you resort to legal proceedings there’s no neutral evaluation procedure to setting the issue.
Marketplaces are in the position where if they receive an IP infringement claim they pretty much have to act and rely on the claimant declaring under penalty of law that they own the rights. The merchant is then left to try and negotiate with the claimant who may not even bother to reply to emails and so leaves the defendant in an impossible position unless they press the nuclear legal button and that can cost hundreds of thousands of dollars.
Now, Amazon.com have been trialling a new Amazon Utility Patent Neutral Evaluation Procedure. It gives the option for the merchant who wants to defend themselves to stump up $4,000, the US patent owner does the same, and Amazon pass the case to a neutral evaluator who will look at the merits of the claim and the defence and rule if the case went to court if the complaint would be upheld. If they rule for the seller they get their $4,000 back and their listings remain live on Amazon. If they rule for the Patent owner they get their $4,000 back and the listings are taken down by Amazon. The evaluator gets paid $4,000 by the loser and there is no no process for appeal or reconsideration of the decision.
This could be a viable way to put a stop to frivolous or malicious IP complaints as under the neutral evaluation procedure, if either party declines to deposit $4,000 to participate then the other automatically wins. If you’ve filed a dodgy IP infringement notice and you’re not willing to stump up $4,000 because you know it’s a malicious complaint that you’ll lose that resolves the matter for good as far as Amazon are concerned.
It’s worth noting that the Amazon Utility Patent Neutral Evaluation Procedure doesn’t preclude future legal action, it only indicates the likelihood in the eyes of the expert neutral evaluator of the claim being denied or upheld and Amazon will act on this unless a court rules otherwise. Currently the evaluation procedure is available for US patent holders on Amazon.com only.