In early 2019, Amazon introduced the Neutral Patent Evaluation Procedure, a streamlined and cost-effective program for resolving disputes between owners of utility patents and Amazon Marketplace sellers accused of infringing those patents. Having represented Amazon Marketplace sellers and a patent owner in Neutral Patent Evaluations, I am convinced that the program works. Utility Patent disputes adjudicated through the Neutral Patent Evaluation Procedure are resolved in far less time than it takes for a patent infringement case to wend its way through a federal district court and at a fraction of the cost. The evaluators are attorneys with relevant technical or patent litigation experience. In my experience, they have not exhibited bias for or against patent owners or Amazon Marketplace sellers, or against Marketplace sellers based overseas such as in China.
Evaluators appear to adhere to the basic tenets of patent litigation. Prosecution history estoppel applies. The all elements rule applies. And, the doctrine of equivalents cannot be used to vitiate claim terms. Thus, the evaluator in one of the Neutral Patent Evaluations in which I participated rejected the patent owner’s argument that the doctrine of equivalents made the asserted product, which tested an electric signal before it was processed, read on the asserted claim, which required that the signal be tested after it is processed.
Claim construction rules also apply. For example, in a Neutral Patent Evaluation in which I represented an Amazon Marketplace seller, the patent owner, during an attempted reissue of its patent to broaden the claims, canceled all its new claims in order to overcome prior art cited by the USPTO examiner. In the Neutral Patent Evaluation, where the seller was practicing the cited prior art (a U.S. patent), the patent owner took a claim construction and infringement position that would cause the asserted claim to read on the cited prior art, effectively invalidating the patent. The proposed claim construction would also have excluded the asserted patent’s preferred embodiment. The evaluator did not accept the patent owner’s arguments, abiding by Federal Circuit principles that claims cannot be construed one way in order to obtain their allowance and in a different way against accused infringers, Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1576 (Fed. Cir. 1995), and that construction that would exclude the preferred embodiment “is rarely, if ever, correct and would require highly persuasive evidentiary support.” Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1583 (Fed. Cir. 1996).
In that Neutral Patent Evaluation described above, the patent owner argued that the evaluator should not consider the cited prior art when construing the asserted claim because Amazon’s Neutral Patent Evaluation rules don’t allow for a defense of patent invalidity based on prior art references (such as patent literature). Yet, as the Federal Circuit’s held in Tate Access Floors, Inc. v. Interface Architectural Res., Inc., 279 F.3d 1357, 1367 (Fed. Cir. 2002), “[p]rior art is relevant to literal infringement to the extent that it affects the construction of ambiguous claims.” Apparently, the patent owner did not appreciate the significant difference between using a prior art reference to invalidate a patent and reviewing cited prior art in construing a claim so as to maintain its validity. Not surprisingly, the evaluator did not accept the patent owner’s argument.
While the Neutral Patent Evaluation Procedure presents new opportunities for attorneys to generate business, some law firms which promote themselves as “Amazon sellers’ attorneys” and “Amazon Marketplace attorneys” are representing parties in Neutral Patent Evaluations even though these firms appear to lack attorneys with patent litigation or patent prosecution experience. Because Neutral Patent Evaluations require an understanding of a patent’s prosecution history, its specification and patent litigation in general, such firms place themselves and their clients at a distinct disadvantage. Such inexperience can do more than cost a client a case. Misguided arguments such as claiming that an accused product which practices the cited prior art reads on the asserted patent can constitute an admission which can lead to invalidation of the patent in a declaratory judgment action.
Amazon’s Neutral Patent Evaluation Procedure is a cost and time-efficient way of resolving patent disputes. It is also a genuine patent litigation where a thorough understanding of patent law and patent prosecution is required.
Attorney Advertising. The information contained in this Legal Alert provides a general summary of the topics covered and is not intended to be and should not be relied upon as legal advice. You should consult with your legal counsel for advice and before making legal, business or other decisions.
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