- Details
- Category: Patent Enforcement
The Federal Circuit's ruling on May 2nd, 2024 in SnapRays dba SnapPower v. Lighting Defense Group (2023-1184), regarding the use of Amazon Patent Evaluation Express (APEX) program has significant implications for patent litigation strategy, particularly influencing where such cases can be filed. The decision established that engaging in the APEX program could expose patent owners to declaratory judgment actions in the accused infringer's home state.
This contrasts with the traditional understanding whereby merely sending a cease-and-desist letter does not establish sufficient grounds for personal jurisdiction. The critical factor in the SnapPower decision was that the APEX program could lead to automatic removal of a product from Amazon, affecting the accused infringer's sales and operations within their state, thereby establishing a tangible link to that jurisdiction.
This ruling necessitates a more cautious approach from patent owners, compelling them to consider the potential for litigation in various jurisdictions before initiating claims through APEX. The decision aligns with broader judicial principles set by the TC Heartland case, where the Supreme Court ruled that patent infringement cases must be filed in the judicial district where the defendant resides or has an established place of business. This ensures that the venue for patent litigation is predictably tied to a geographical location that has a substantive connection to the alleged infringement.
The Federal Circuit's SnapPower decision reinforces this principle by interpreting the use of online enforcement tools like APEX as an extension of a patent owner's reach into the accused infringer's locale, thereby justifying personal jurisdiction based on the economic impact of their actions.
Contact us to discuss your options if you are an Amazon Seller who has received a cease and desist letter alleging infringement or you are a patent owner who suspects an Amazon seller is infringement your patent rights.
- Details
- Category: Patent Enforcement
The Amazon Patent Evaluation Express (APEX) is a program initiated by Amazon to resolve patent infringement disputes quickly and efficiently within its marketplace. The APEX procedure allows patent owners to assert claims of patent infringement against sellers on Amazon's platform. The process is designed to be faster and more cost-effective than traditional legal channels. See Amazon Brand Protection Report, March 2024 at 12 (reporting that APEX cases are being decided in an average of 30 days).
Here’s a step-by-step guide on how APEX works from the perspectives of the patent owners, Amazon sellers (potential infringers), and the neutral evaluator:
1. Patent Owner's Perspective
Step 1: Submission of Claim
- The patent owner starts by filing a patent infringement claim through the APEX system on Amazon. This submission includes proof of patent ownership, the specific patent (or patents) allegedly infringed, and the listings (ASINs) on Amazon claimed to infringe the patent.
- See SnapRay v. Lighting Defense Group, a Recent Fed. Cir. ruling (2023-1184) affecting the decision by the patent owner on which Amazon sellers (alleged infringers) to target given the potential of the sellers filing declaratory judgment suits in unfavorable fora or timing.
Step 2: Payment of Fee
- The patent owner must pay a fee of $4,000 (as of October 2024) to initiate the evaluation process. This fee compensates the neutral evaluator selected to review the case. The cost is fully refundable if they prevail.
Step 3: Amazon Notification
- Amazon notifies the seller accused of infringement about the claim, providing them with the details and an opportunity to respond.
2. Amazon Seller's Perspective
Step 1: Notification of Claim
- Upon receiving a notification from Amazon, the seller reviews the infringement claim and decides whether to contest the claim or remove the listing.
Step 2: Response
- If the seller chooses to contest the claim, they must also pay the same fee as the patent owner to proceed with the APEX process. This fee is also fully refundable if they prevail. There are also provisions where this fee could be refunded if a claim is canceled, and the parties could also settle their claims, settlement including how to dispose of the fees.
Step 3: Submission of Evidence
- The seller submits any evidence that the product does not infringe the patent claimed or argues that another tribunal has held the patent invalid or unenforceable, etc.
3. Neutral Evaluator's Perspective
Step 1: Appointment
- A neutral evaluator with expertise in patent law and the subject matter of the relevant product(s), is assigned to the case. Both the patent owner and the seller contribute to the evaluator’s fee.
Step 2: Review of Submissions
- The evaluator reviews all the documents, claims, and evidence submitted by both parties.
Step 3: Decision
- The evaluator issues a decision on whether the accused products likely infringe the patent in question. This decision is typically rendered within a few weeks.
Step 4: Implementation of Decision
- If the evaluator finds infringement, Amazon will typically remove the infringing listings. If no infringement is found, the listings remain active.
Step 5: Optional Appeal
- The decision by the neutral evaluator is final in the context of Amazon’s marketplace. However, either party may pursue traditional legal actions in court regardless of the APEX decision.