I know that one of the main challenges you may face as an Amazon seller is trying to avoid patent infringement. It can be extra tricky if you’re just starting and don’t know exactly what patent infringement constitutes.
Through my years of selling on Amazon, I’ve had to deal with several situations like this, and as such, I’ve learned plenty. This is why I combined my experience with in-depth research to help you avoid pitfalls.
My aim in this article is to clearly show you what patent infringement means, how to avoid patent infringement as an Amazon seller, and what to do if you’re accused of infringing on a patent.
How to Avoid Patent Infringement as an Amazon Seller
With the boom of e-commerce platforms like Amazon, more people find opportunities to sell products to a global audience from the comfort of their homes. However, this comes with challenges and risks, such as patent infringement. Patent infringement occurs when a party uses, makes, or sells a patented product without the patent holder’s authorization.
Regarding patent infringement, as the popular saying goes, “prevention is better than cure.” This is because getting an infringement complaint on Amazon can cause a lot of damage to your sales and business in general. Therefore, understanding infringement and knowing how to avoid it is critical for protecting your business.
What Is Amazon Patent Infringement?
When you check Amazon patent infringement, it occurs when a seller on the platform lists or sells a product that infringes upon the valid patent rights of another product. This means if you’re selling a product on Amazon, and that product is protected by someone else’s patent, without the proper authorization, you could be infringing on their intellectual property rights.
The consequences of infringement can be quite severe for Amazon sellers. Here’s a breakdown of potential actions that Amazon may take if you are accused of infringement:
Once they are notified that one of your listed products may be infringing on a patent, Amazon sends you an infringement notice. Then, they may remove the listing of that particular product from your seller page to prevent further sales of the allegedly infringing item.
Amazon can suspend your seller account if it determines that you have violated patent rights. Account suspension is serious and can greatly impact your business. However, this mostly only happens when you ignore the infringement notice sent to you.
Holding Sales Proceeds
Sometimes, Amazon may hold onto the proceeds from your sales until the infringement issue is resolved. This ensures that any financial settlements owed to the patent holder can be paid.
Apart from the actions taken directly by Amazon, sellers may also face legal action from the patent holder outside the platform. This can further lead to legal fees and damages to your brand reputation.
How to Avoid Patent Infringement on Amazon
To minimize the risks of getting hit with an infringement claim on Amazon, you can take certain proactive steps. They include:
Conduct a Patent Search
Carrying out a thorough patent search before selling a product on Amazon is one of the best ways to avoid and determine patent infringement. This process involves checking existing patents to ensure the product doesn’t violate someone else’s patent rights. To conduct a preliminary patent search, you can make use of the following resources:
- Patent Public Search
- Global Dossier
- Patent Application Information Retrieval (PAIR
- The USPTO Public Search Facility
- Patent and Trademark Resource Center (PTRC)
- Electronic Official Gazette
- Common Citation Document (CCD)
- Publication Site for Issued and Published Sequences (PSIPS)
You should consider engaging a patent attorney specializing in e-commerce for professional patent analysis. This involves a comprehensive review of existing patents in your product niche, helping you understand their claims and ensuring your product doesn’t inadvertently infringe on any rights.
Finally, implement a system that continuously monitors new patents in your product’s niche or any changes to existing ones. This proactive approach helps you stay informed about developments that could affect your business.
Get Authorization Letters and Invoices
Before listing a product, seek authorization letters from brands or wholesalers that confirm your right to sell their products. This documentation will prove that you were given the authority to distribute the items.
Additionally, you should always request invoices from your supplier for each supply, as Amazon often asks for invoices when investigating infringement cases. Ensure these invoices are issued within the past 365 days and contain crucial information about yourself and your supplier, including your name, address, telephone, email, and website.
Apply for a Patent or Trademark
Although it will cost you some money, applying for a patent or trademark for your products can offer a strong layer of protection. This safeguard grants you exclusive rights to produce, use, sell, and import your product, saving you from future legal troubles and eliminating competition. Knowing the Amazon’s neutral patent evaluation is a must.
Work With a Legal Professional
To drastically reduce your risks of infringing on an existing patent, you would need the help of a patent attorney. These legal professionals can help you assess the risk of potential infringement and advise you on how to proceed, thereby minimizing legal exposure.
Additionally, if you get hit with an infringement claim, patent attorneys can negotiate on your behalf, helping you avoid lengthy legal battles and reach settlements that protect your interests.
Communicate With Patent Holders
As a seller, open communication with patent holders can ensure success on e-commerce platforms like Amazon. This communication promotes understanding and trust and can grant you licensing agreements.
A licensing agreement is a document that gives you the authorization to use patented products legally. Securing this document will protect your business from patent infringement claims on a particular product. Here are a few tips for communicating with patent holders:
- Start by identifying the patent holders relevant to your product niche
- Next, initiate contact with them. Clearly express your intentions to get a licensing agreement and emphasize the benefits it could bring to both parties
- If they agree, work with them to define the terms of the licensing agreement in clear terms. Make sure the document specifies the scope of use of the license, duration, and financial aspects of the arrangement such as the royalty rates. This should be in writing and signed by both parties.
- Before finalizing the licensing agreement, it’s advisable to seek legal guidance from a patent lawyer. This is to ensure that the agreement is fair, without loopholes, and protects your interests.
What to Do if You Get a Patent Infringement Claim on Amazon
If you practice the tips provided above, you should be pretty insulated from infringement claims. However, if you receive an infringement notice from Amazon or a third party, it is important to respond promptly and knowledgeably. Here are some things to do to handle the situation:
Review the Claim
Upon receiving a patent infringement notice, stay calm and carefully review the details. Try to pick out the specific allegations, such as which aspects of your product are claimed to infringe on the patent.
Consult With a Patent Attorney
You should seek immediate consultation with a patent attorney. They will help you assess the claim’s validity and provide legal advice throughout the process.
To help you build a well-detailed appeal, collect all relevant documentation you can find about your product and the asserted patent. This includes product information, design specifications, and any communication you may have with the patent holder.
File an Appeal
Work with your patent attorney to file an infringement appeal with Amazon. This appeal should clearly state and prove that your sale is not infringing on any existing patent.
Communicate With the Patent Holder
You can establish communication with the patent holder through your attorney to negotiate a settlement. Examples of settlements include obtaining a licensing agreement, modifying your product, or any other mutually agreeable resolution.
Also, if a third party hits you with a patent claim, it is advisable to sign a peaceful coexisting deed with the party to avoid any further frivolous claims.
How Can Licensing Agreements Benefit Amazon Sellers?
Licensing agreements grant sellers the legal rights to sell a patented product. This provides them unrestricted access to the product’s special features, ensuring their listings stand out in the marketplace, and at the same time, offers legal protection against infringement claims. Licensing agreements also increase the seller’s revenue by giving them an edge over their competition.
How Can I Conduct a Preliminary Patent Search as an Amazon Seller?
You can conduct a preliminary patent search for existing patents in your product niche by using various online databases and resources, most of which are provided by the United States Patent and Trademark Office (USPTO). Examples of these resources include Patent Public Search, Global Dossier, and Electronic Official Gazette.
What Should I Do if Accused of Patent Infringement on Amazon?
If you receive a patent infringement notice on Amazon, the advisable thing to do is consult with a patent attorney as soon as possible. These legal professionals can help you assess the claim’s validity, guide you through the appeals process, and provide legal advice on best addressing the situation.
Regarding patent infringement, it is better to avoid a claim than to appeal it. The proactive measures highlighted above will assist Amazon sellers in navigating the complexities of patents, thus protecting their businesses from potential pitfalls and ensuring long-term success.