Recently I had the pleasure of presenting at the Midwest Intellectual Property Summit hosted by the Indiana Continuing Legal Education Forum (ICLEF) on an effective tool and process for removing accused patent infringing products on Amazon.com called the Amazon Patent Evaluation Express Procedure (APEX). The APEX program, at its core, is a streamlined process utilizing a neutral party (“evaluator”) to evaluate a single patent claim of an asserted U.S. patent to determine if an accused infringing product is more likely than not to infringe the asserted patent. The process requires the submission of a brief providing legal argument and information to either support or defend a parties claim of infringement.
Patent Eligibility
The APEX program can generally be considered a limited procedure with patent eligibility and procedures designed to keep evaluations quick and relatively low-cost. Therefore, the program is only available for utility patents that are not considered “extremely technical.” The guidelines provide an example of a patent that covers the operation of the hardware components within a consumer electronics device as being “too technical” for the program. Accordingly, the program works best for a utility patent related to an article of manufacturer that does not utilize a long and complex claim set. A given evaluation is limited to a single patent claim from a single unexpired U.S. utility patent against a maximum of 20 Amazon Standard Identification Numbers (ASINs) identifying the accused products. Additional ASINs may be included in an additional evaluation or may be addressed at the conclusion of a successful evaluation for a patent holder.
The Evaluation Process
Based upon the briefing and review of the asserted patent claim, the evaluator will make a “yes” or “no” infringement decision about whether the asserted patent claim covers the product listings on Amazon.com. This evaluator may make a “no” decision based upon a lack of infringement (i.e., accused products do not contain all of the elements of the asserted claim); a court has found the patent to invalid or unenforceable; or the accused products were on sale more than one year prior to the earliest effective filing date. This evaluator is a licensed patent attorney having experience with the product category at issue. The evaluator is not compensated by Amazon, nor does Amazon participate in the decision making process in any way. Currently, the average time for a final disposition of a patent in the APEX program is seven weeks. A successful evaluation for a patent owner will mirror injunctive relief with the accused infringing products being permanently removed from Amazon.com.
Participating as a Patent Holder
As a patent holder, formal participation in the APEX process generally begins with a request through a form available on the Amazon Brand Registry. Upon the initial completion of the brand registry form, the patent owner will have the option to learn about the APEX process which should be selected for participation. After the submission of this form, the party will receive an email about the program along with a copy of the APEX procedures and an APEX agreement with attached exhibits. To officially begin the formal APEX process, this agreement is returned to Amazon via email with the requested information. The requested information generally relates to the patent owner contact information, information related to patent ownership, and a section to provide a list of the accused infringing products. Upon completion and return of the executed APEX agreement by a patent owner, Amazon will begin contacting the accused sellers and providing them with the APEX documents and giving them three weeks to respond. To participate, the accused seller must complete the form and return an exhibit containing their contact information to Amazon.
If any of the accused selling parties elects not to participate, their listed ASIN(s) provided by the patent owner will be removed and nothing additional is needed. Conversely, if a selling party elects to participate, by the conclusion of the aforementioned three-week period, each of the participating parties is notified separately via email from Amazon. This email identifies the neutral evaluator, the case number for the APEX process, and instructions for a wire transfer of the funds necessary to participate in the proceeding.
The Cost of Participating
The current cost to participate as either a patent owner or third-party seller in an APEX proceeding is $4,000. This $4,000 payment is provided directly by each party to the evaluator and is said to cover the costs of evaluation. Upon conclusion of the proceeding, the prevailing party will have their payment returned. There are additional procedures for handling multiple parties and refunds available if a claim is cancelled or settled depending upon the timing of these relative to the briefing process discussed below. Upon completion of both payments by the patent owner and seller, the neutral will formally begin the process via an introductory email outlining the party’s responsibilities and briefing schedule.
APEX Brief Requirements and Process
The APEX brief is generally written argument by the patent owner and seller regarding infringement or non-infringement of the asserted patent. The briefs must be provided via email electronically to both the evaluator and the opposing party in the same email. The briefs must be in the English language and provided on pages having an 8.5” x 11” page size, and no physical exhibits are allowed. The patent owner briefing limit is 20 double-spaced pages between an initial submission and a reply, not including any claim charts or exhibits. The seller is able to supply a response to the initial brief that is limited to 15 double-spaced pages, not including any claim charts or exhibits. The seller is not able to submit a rebuttal to the patent owner’s reply brief. Beyond these page size and page amount limits, there are no additional format or style requirements.
The briefing is conducted on a relatively abbreviated time schedule with the patent owner’s initial brief due 14 days after the beginning of the process (the beginning email typically includes the initial deadline date for the brief). The seller will have 14 days to respond from the date of receipt of patent owner’s brief. The patent owner will have 7 days from receipt of the seller’s brief to submit a reply if desired. If a submission is not made timely, the evaluator may make a finding against that party, and they may forfeit their payment. However, the patent owner is not required to make a reply and may waive this submission upon notice to the evaluator. Additionally, the evaluator does have the authority to request that the parties answer discrete questions that will aid the evaluator and may modestly alter the briefing schedule and limits to accommodate these answers.
The Decision
Within two weeks of the last responsive filing, the evaluator will provide a decision. The evaluator will choose among the following two options for the decision: (1) the patent owner is likely to prove that the accused product infringes the asserted claim; or (2) the patent owner is not likely to prove that the accused product infringes the asserted claim. If the evaluator finds infringement is likely, no reasoning will be provided. If the evaluator finds that infringement is not likely, they will provide a brief explanation of why the patent owner is unlikely to prove infringement. This decision is final and there is no procedure or process to request reconsideration.
After the Decision
Upon the rendering of the decision, Amazon will be notified and take the appropriate action. Generally, if the patent owner is likely to prove infringement, the accused product will be removed from Amazon.com within 10 business days. Additionally, any money paid to the evaluator will be dispersed to the respective party per the agreement. A favorable decision to a patent owner is similar to the effect of a court order, wherein the successful patent owner can now utilize the APEX case number through the Brand Registry to remove other infringing products that are similar to the sellers without the need for additional APEX proceedings.
Conclusion
Reported statistics indicate that Amazon is currently the second largest retailer in the U.S. accounting for approximately $398.8 billion in gross merchandise value (GMV) sales in 2021. Over the next four years, Amazon is projected to surpass Wal-Mart as the largest retailer in the U.S.[1] Along with the growth of its purchasing customer base, Amazon has experienced a significant increase in both the number of third-party sellers and the products sold by these third-party sellers. Along with this growth, it is anticipated that the amount of potential infringement will also increase. Therefore, brand owners, and especially brand owners with an enforceable utility patent, should be familiar with the APEX process and considering using it as a valuable tool for protecting and defending their products on Amazon.
If you have any questions, we're here to help. Give me a call at 651.968.4716 or shoot me an email at greg.geiser@gutweinlaw.com. You can also check out gutweinlaw.com/informed-ip for more information on all things intellectual property.
[1] https://www.businesswire.com/news/home/20220601005183/en/Ecommerce-Shakes-up-the-Top-Five-Retailers-in-the-US-New-Report-by-Edge-by-Ascential.
