What is the Amazon patent infringement program called?

Amazon’s Neutral Patent Evaluation (NPE) program is their own version of patent court to resolve patent infringement disputes between sellers. While the NPE is not actually a court of law, its goal is to provide a more cost-effective way to resolve patent disputes involving goods sold on Amazon.com.

How does Amazon’s Neutral Patent Evaluation (NPE) work?

A neutral evaluator (basically a private judge) will be assigned to each case to determine whether a particular vendor’s goods violates the patent(s) asserted by the IP owner. Both the patent owner and accused infringer/vendor will have the opportunity to argue their cases provided that they agree to submit to the process and pay the evaluator a deposit, which is currently at $4,000. The winner of the outcome gets their deposit refunded.

How to defend against an Amazon patent infringement claim

In defending against a claim of patent infringement, a seller participating in the NPE program has only the following options:

  1. argue noninfringement;
  2. show that patent was previously declared invalid or unenforceable by a court, USPTO or International Trademark Commission (ITC); or
  3. accused products were on sale one year or more before patent’s effective filing date.

An accused infringer should perform the noninfringement due diligence before making a decision on whether to pay the deposit to participate in the NPE program. The winner gets their deposit back.

A prior declaration of invalidity or unenforceability by a court, USPTO or ITC would seem rare and unlikely. So an Amazon seller accused of infringement would need to focus on noninfringement arguments and/or the possibility of selling goods covered by the patent claims more than 1 year prior to the patent filing date.

Will prior art be considered by the evaluator?

While the NPE program does not allow for invalidity arguments, it may be possible to submit prior art to narrow the interpretation of the claims. In patent litigation, this is known as claim construction. The meaning of claim terms must be construed in a way so as to be valid over the prior art. Therefore, you can use prior art to help shape the interpretation of certain claim terms so as to avoid infringement. This is a complicated technical argument that will require patent litigation experience to implement.

Should you participate in Amazon’s NPE program?

There are pros and cons to Amazon’s program for handling patent infringement claims. For a seller accused of infringement, agreeing to the program allows for the seller to keep their Amazon listings unless and until infringement has been determined by the neutral evaluator. One con is the potential forfeiture of the thousands of dollars deposited for the neutral evaluator.

Before agreeing to the program, it might make sense to have a claim comparison done by a patent attorney to see if you have at least some decent arguments for noninfringement. If not, and you cannot show prior sales preceding the patent filing date by more than one year, then the NPE program will likely end in favor of the patent owner.

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Vic Lin

Vic Lin

Startup Patent Attorney | IP Lead Partner at Innovation Capital Law Group
We align ourselves with Davids fighting Goliaths. Our registered patent attorneys work as a team to equip startups and entrepreneurs with solid IP rights that facilitate funding, growth and sales. Email or call us so we can get to work on your IP: (949) 223-9623 | vlin@icaplaw.com