What is the Amazon utility patent neutral evaluation procedure?

Patent owners may file a claim with Amazon to stop sellers from listing products that allegedly violate their utility patents. In essence, Amazon provides sellers with their own version of patent court which might avoid the need to litigate in federal court. Amazon’s patent dispute resolution, called Neutral Patent Evaluation, requires each side to pay a neutral evaluator a fixed fee and then submit written arguments as to why the accused products are infringing or non-infringing. There is at least one thing that both patent owners and accused sellers may agree: the cost of an Amazon patent case is substantially less than that of a patent lawsuit.

How much is the deposit to start an Amazon patent case?

Each side must pay the neutral evaluator a flat fee deposit, which is $4,000 as of the date of this post. In a typical American-style litigation where each side has to pay their own legal costs, it is very rare to be able to extract attorney’s fees or costs from the losing party. Here, Amazon has provided a merit base procedure where the winner gets their $4,000 returned.

Should accused Amazon sellers pay the deposit and sign the patent neutral evaluation agreement?

When a patent owner initiates a patent evaluation procedure, the accused Amazon seller has about three weeks to pay the deposit and sign the Amazon utility patent neutral evaluation agreement. Accused sellers should act promptly and take advantage of this 3-week period to make an initial determination of their likelihood of success.

If the utility patent has more than one independent claim, accused sellers might not know exactly which claim will be asserted against their products at this early stage since the patent owner has not yet submitted their written argument. This is where a patent attorney with patent litigation experience can be especially helpful. Experienced patent litigators can cut to the chase and narrow down the patent claims that will likely be asserted against your product listings.

Our firm can provide a preliminary noninfringement analysis of the asserted patent and your product listings. This comparison of the patent and your products may be a worthwhile review before you decide to invest in the neutral patent evaluation procedure. Results of our findings may be verbally communicated to the client at first.

What is the cost to prepare a seller response to the patent owner’s infringement arguments?

Our firm currently charges a flat rate of $4,000 to prepare and submit a seller’s response to the patent owner’s infringement submission based on either noninfringement or prior sales. If our client prevails, then the initial deposit paid to Amazon will be returned to the client, which effectively pays for our attorney’s fees.

An Amazon seller’s response will normally take one of two approaches:

  1. argue noninfringement, in which case a claim chart should be used to show the absence of certain required claim elements; or
  2. argue past sales of covered products, in which case a claim chart should show how each claim limitation is found in the previously sold product.

In either case, the accused Amazon seller should expect a thorough technical analysis that is clearly summarized and effectively argued in the seller’s response.

Though rare, it is possible for a seller to argue both infringement and past sales which may incur higher attorney’s fees for the additional work involved.

Is there a contingency patent attorney for defending Amazon patent cases?

Our firm is willing to explore hybrid contingency arrangements for Amazon sellers accused of infringement. Depending upon the strength of your particular noninfringement arguments as determined by our patent attorneys, we may be willing to explore the following arrangements:

  • a reduction of our attorney’s fees by up to 50% if our client does not prevail; or
  • a discount off our attorney’s fees.

In any patent infringement dispute, the main goal is to win. Our fee reduction options above make it more affordable for clients to pursue a defense. Not only are we willing to bring down the cost of an Amazon patent case, we want the client to know that our firm shares the same motivation as the client is seeking a victory as explained below.

For an accused product, the total cost of an Amazon patent case may range from $4,000 to $8,000.

What would a hybrid contingency fee look like for an Amazon NPE case?

Our firm has purposely set our attorney’s fee for an Amazon’s seller response to be equal to the initial deposit to be paid to the neutral patent evaluator. If our client wins, then the full refund of the evaluator’s deposit to our client will effectively pay for our legal fees. This aligns our interests with the client’s interest. A hybrid contingency provides the client with some assurance that a law firm is highly motivated to win the case.

Depending upon the merits of each particular case, our firm may be willing to offer a discount of up to 50% if our client does not prevail. This discount must be determined on a case-by-case basis since not every accused product will have a strong probability of success. There may be times when certain accused products have a low chance of success with respect to noninfringement arguments.

If you feel that our accused product does not infringe the owner’s patent, feel free to contact us to explore a potential hybrid contingency arrangement. Assuming our firm has no clients, we may invite you to send us some preliminary thoughts as to why you believe there is no infringement.

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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 founders 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