Amazon’s Utility Patent Neutral Assessment Process: Seller Beware

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Speed ​​and efficiency have long been hallmarks of Amazon, and its dispute resolution system for patent infringement claims is no exception. Amazon’s Utility Patent Neutral Evaluation (“UPNE”) process is quickly emerging as an effective and powerful dispute resolution tool, especially in the consumer goods industry, where sellers rely on Amazon for a significant portion of their sales. So effective, in fact, that sellers who ignored or failed to take a UPNE seriously had their products suddenly banned from Amazon’s website, leaving them with no recourse but to file a lawsuit. declaratory in federal court and seek relief which is generally far from quick or certain.

Bissell’s UPNE vs. Tineco

The action for declaratory judgment of Tineco Intelligent Technology Co., Ltd. and its affiliates this month against Bissell, Inc. for non-infringement and invalidity, WD Wash. 22-cv-297-TL, shed light on the fast and powerful form of repair a patentee can achieve using an UPNE. Amazon had notified Tineco, a Chinese company that makes and sells portable vacuum cleaners on Amazon, that Bissell had launched an UPNE. Tineco then had three weeks to indicate whether or not it wished to contest Bissell’s claim. However, Tineco apparently ignored Amazon’s email, leading to Amazon automatically imposing a “default judgment” against Tineco and removing the offending products. Unlike in court, failure by either party to meet the deadlines imposed by Amazon in an UPNE results in the proceedings being terminated in favor of the other party. Worse still for Tineco, Amazon’s removal of Tineco’s products is not reviewable, as Amazon has no formal internal appeals process.

Faced with a near total loss of business, Tineco’s only option was to file a declaratory judgment action against Bissell in federal court for non-infringement and invalidity and seek a TRO. Fortunately for Tineco, Amazon deviated from its standard procedure and reinstated Tineco’s listings pending the outcome of the litigation, so Tineco withdrew its TRO request.

Not the first

Tineco is not the first consumer goods company to have suffered a similar fate in UPNE proceedings – and to have no choice but to turn to court for a much slower remedy. In November 2021, Shenzfiett Gooloo E-Commerce Co., a distributor of electric starters and powerhouses that derives 80% of its revenue from Amazon, had several of its products removed from Amazon as part of a UPNE brought by Pilot, Inc. Shenzfiett then sued Pilot for a declaration of non-infringement and invalidity and filed a TRO motion asking that Pilot be ordered to reverse Amazon’s removal of its products. Shenzfiett Gooloo E-Commerce Co. and. Al. v. Pilot, Inc. 2021 US Dist. LEXIS 225300, CD Cal. 2021. Facing the loss of nearly all of its business, Shenzfiett argued that it would be irreparably harmed if Amazon removed its products. While the court recognized that the loss of business could be considered irreparable harm, the court rejected the TRO for two reasons: because Shenzfeitt apparently still had top-selling products on Amazon, and because it had waited over a month and a half to file an application. for a TRO. So far, only one court has ordered a UPNE, but that was before the UPNE was decided, and only because a patent infringement case involving the same patent claims was already pending in that court. . Thermolife Int’l vs. Human Power of N Co., 2021 US Dist. LEXIS 249770, WD Tex. December 21, 2021.

Take UPNE seriously

The lesson to be learned, especially for businesses that depend on Amazon sales for their business, is that an UPNE should be taken very seriously by Amazon sellers, both because of the speed with which it is taking place and the seriousness of the potential remedy. Within 60-90 days, a patentee commencing a UPNE can obtain a private injunction from Amazon in the form of a permanent exclusion of an accused product from all Amazon sales. And while Amazon’s removal of the offending products under its procedures may eventually be overturned by a court, it may be too late for the seller to resume business by the time they obtain a contrary ruling.

For patent holders, a UPNE can be used as an efficient and expedited alternative to litigation in federal courts for infringements by products sold on Amazon.


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