Introduction to the Amazon APEX Program

Introduction

Amazon APEX (which stands for Amazon Patent Evaluation Express) is an Amazon-initiated dispute resolution proceeding that allows patent holders to remove infringing Amazon listings without having to resort to litigation. A rightsholder can raise a single patent claim against a maximum of 20 Amazon standard identification numbers through an APEX proceeding. The program utilizes a neutral third-party evaluator to evaluate a single patent claim to determine if an accused infringing product is more likely than not to infringe the asserted patent. The evaluator is usually a licensed patent attorney with experience in the relevant product category and is not compensated by Amazon. Amazon itself also does not participate in the decision-making process. Instead, a $4,000 payment is provided directly by each party (the patent holder and alleged infringer) to the evaluator to cover the costs of evaluation.

How It Works:

To start the process, a patent holder (who is registered in the Amazon Brand Registry) must complete a form available through the Brand Registry and return a completed agreement with attached exhibits outlining the relevant information about the allegedly infringing product. Once an agreement is executed by a patent owner, Amazon will begin the process of notifying the accused sellers and providing them with the relevant information. The sellers then have three weeks to respond and either opt into the process by completing a form and returning their own evidentiary exhibits to Amazon or opt out by declining to participate in the process. If a seller declines to participate in Apex proceedings, then the listings provided by the patent owner will be removed. On the other hand, if the selling party opts into the process, each party is notified separately via an email from Amazon and an evaluator is assigned.

The proceedings do not include traditional litigation methods such as discovery. Instead, the parties exchange briefs that the evaluator will review. The patent owner’s initial brief is due two weeks from the start of the process (the initial notification email), and their initial and reply briefs are both limited to 20 pages. The seller will have two weeks to respond from the date of receipt of a patent owner’s brief, and their response is limited to 15 pages. While the patent owner has the option of submitting a reply within one week of receipt of the seller’s response, the seller cannot submit any further rebuttal. Within two weeks after submissions, the evaluator will make a final decision. Importantly, APEX proceedings only consider infringement arguments, and any other defences—such as invalidity of the claim—cannot be considered by the evaluator. While the rules of traditional discovery are not followed in these proceedings, the evaluator can request that the parties answer additional questions and can accommodate modest amendments to the briefing schedule.

The Benefits:

Amazon’s retail platform is massive and quickly growing. The incidence of intellectual property (“IP”) infringement on its platform is also, unfortunately, quite frequent. As such, it is important to have an efficient method to quickly resolve IP disputes, especially in light of lengthy wait times and high overall costs associated with traditional litigation. Amazon APEX offers just that: a (relatively) inexpensive and quick way to evaluate whether a product is infringing an existing patent. At the end of the process for a successful rightsholder the remedy is, essentially, an injunction; the listings are taken down, and the patent holder’s IP is protected on the platform. Further, the winning party receives their initial $4000 investment back at the end of the proceedings, meaning a rights holder can defend their IP—or a seller can defend their operation within the free market—at potentially zero cost. Last, successful rightsholders can leverage previous APEX case wins to take down similar infringing product listings without having to re-engage in the process using their assigned APEX ID.

The Drawbacks:

Despite the relatively low cost of initiating proceedings, the initial investment may still be a drawback for some. Further, the non-traditional nature of the proceeding does not guarantee that a party will not have to hire IP counsel to make arguments on their behalf. At the end of the process, participants are also unable to appeal the decision of the evaluator since every decision is final. While such a drawback can be considered proportional against the expedient and cost-efficient nature of the program, this aspect still may be a significant factor in a party’s decision of whether to engage with the program or follow the traditional dispute resolution route.

Another significant drawback is the availability of the program. Rightsholders of Canadian patents with an infringement claim are, unfortunately, out of luck. Currently, APEX is only available for rightsholders with United States patents, and the program only covers utility patents, not design patents. However, the program is also not available for utility patents that are considered “extremely technical.” What does this mean? In operation, this means that the program is only available for articles of manufacture with simple claim sets, i.e., simple products. An electronic device, for example, would be considered too technical for the program. As it stands, those with non-United States patents, or those with a United States patent for a relatively complex product, will be unable to utilize the program. These limits make Amazon’s APEX program inaccessible to a high proportion of rightsholders.

Conclusion and Your Next Steps:

Given the current backlog in the United States court system, it is important for Amazon, as the country’s second largest retailer, to find alternative ways to protect rightsholders within its marketplace. For Canadian patent holders, Amazon APEX is still inaccessible, but considering how Amazon’s market share in retail e-commerce is over 40% in Canada, it will likely expand beyond the United States soon. See our resource on how you can expand your patent protection to the United States in the meantime. Despite the current drawbacks to the program, Amazon APEX affords participants a cost-effective and quick way to navigate IP disputes. To see if you qualify for initiating proceedings through Amazon’s APEX program or to request assistance through the process, please make a complimentary and confidential no-obligation appointment with a member of our team.