From The National Law Review:
Amazon CEO Jeff Bezos recently disclosed that gross merchandise sales in the Amazon Marketplace by independent third party sellers (as opposed to sales made directly by Amazon itself) had grown to 58% of total sales. According to data company Statista, 73% of those sellers were small businesses with between 1-5 employees. For many of them, sales on Amazon comprise their entire revenue.
Discussion of the opportunity Amazon Marketplace represents for small business, however, is joined by the voices of many retailers complaining about sales of counterfeit and stolen goods. To better police its online sales, Amazon has launched initiatives such as Project Zero which allows owners of brands to delete counterfeit products.
The online retail giant’s latest enforcement effort—designed to combat patent infringement—has been dubbed the Utility Patent Neutral Evaluation Procedure (UPNEP). Under this new trial program, a company that believes certain products for sale on the Amazon Marketplace infringe its patents can request an evaluation by depositing $4,000. If the seller does not dispute the accusation, Amazon removes the infringing products from the marketplace, and refunds the deposit to the patent owner. If the seller decides to fight the claim, it also deposits $4,000. Amazon then assigns a lawyer with patent expertise to resolve the dispute. The patent owner submits an opening brief, the merchant files a response, and then the patent owner may submit a reply. The lawyer reviews the submissions, and decides whether the listing should be removed or maintained. The winner gets its money back, and the loser’s $4,000 gets paid to the lawyer. There is no discovery, and no appeal or request for reconsideration. The whole process takes just a few months from start to finish.
Many stakeholders in the Amazon ecosystem have applauded the UPNEP as providing both patent owners and Amazon merchants with a quick and cost-effective mechanism for resolving infringement disputes arising from third-party listings. While participation in the program does not prevent a patent owner from commencing a lawsuit, many sellers do not reside in the United States, and thus may not be subject to service of process in a U.S. federal court. Without UPNEP, patent owners would have little to no recourse in such cases.
. . . .
Expert Peter Kent, who has served as an expert in several Amazon-related cases, is monitoring developments closely. “A critical question in my mind about the UPNEP program,” explains Kent, “is whether it will be exploited by larger companies trying to knock out competitors using spurious patent claims. For instance, if a small merchant who can’t afford the $4,000 doesn’t respond, their product listings are automatically removed, regardless of the merits of the petitioning company’s patent claims.”
Link to the rest at The National Law Review
OK, patents. But what about copyrights?
Baby steps, but with luck that might be next …
Ha! The first one of these that actually costs the false infringement claimers money. I can agree to/with this.
A quick search didn’t lead me to the text of the Amazon agreement- I would want to see that first. A short thought process, based only on the information in the OP, came up with multiple ways in which this would make abuse of the valid IP holder easier. I’d need to see whether those avenues are closed off.
In any case, this wouldn’t be a “cost-free” alternative, at least not for the smart defender of an IP. If I were to go this route (unlikely, I don’t even have any patents), I would be tracking down and paying my local equivalent of Passive Guy to draft anything used in the process. (Still, much cheaper and faster than mounting a full-bore lawsuit.)
I completely agree. But this is the first time we’ve seen a take-down tool that actually punishes false take-downs (unlike the DCMA and the like.)
I did like the bit about if both sides want to fight about it that the winner gets their money back and the loser doesn’t. Yes, the big boys can try gaming this, but from the sound of it the product isn’t being taken down until the ruling is made, and I have a funny feeling any big kids that game it too often might find Amazon ignoring their claims after a while (Would be interesting if Amazon posted who was fighting over what – and who won each battle. 😉 )