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Amazon sets up simple patent infringement system

Amazon has introduced a trial system to combat patent infringement on its platform. A patentee who believes that a product for sale on the Amazon Marketplace infringes its patent can request an evaluation by paying a deposit of $4000. The seller is offered two options: (i) resolving the issue with the patent owner directly, with Amazon removing the product from sale if the patent owner is not satisfied; or (ii) depositing $4000 to fight the claim.

If the seller chooses not to fight the claim, Amazon removes the product from sale and refunds the patent owner’s deposit.

If the seller chooses to fight the claim, Amazon appoints a patent lawyer to resolve the dispute. The patent owner submits an opening brief, the seller responds and the patent owner can reply. The patent lawyer then decides whether the product should be removed from sale. The winner is refunded their $4000 deposit. The loser’s $4000 deposit is paid to the lawyer.

Patent litigation is notoriously expensive and slow, so this is an interesting proposal by Amazon. Early feedback from some patent owners has been positive. Although the sale block is limited to Amazon’s platform, many small sellers rely almost entirely on Amazon making the block a surprisingly effective tool for reducing the number of infringing products on the market. It is also useful against sellers based in other countries. What is less clear is how this system deals with patents of dubious validity or with any but the simplest of products. A patent lawyer is unlikely to be reverse engineering a complicated consumer product. Nor is it clear if this system gives patent lawyers the motivation to delve too deeply: a cynical mind might think it is in the lawyer’s interest to do as little as possible, safe in the knowledge that any decision will pay them $4000.