Brand owner praises Amazon’s new utility patent scheme

The manufacturer of pet hair remover ChomChom Roller has said a new programme piloted by Amazon over the last few months has helped it tackle a major counterfeiting issue.

The new programme is aimed at counterfeits that infringe utility patents, but don’t contravene other intellectual property such as trademarks, for example by copying a brand name.

ChomChom Roller has been an early adopter of Amazon’s brand protection tools, signing up for its Transparency serialisation scheme in early 2018, now part of the online retailers Project Zero suite of anti-counterfeit tools.

That paid dividends in driving direct counterfeits of its rollers from the marketplace, says chief executive Aaron Muller.

“We would sell a very healthy volume of ChomChom Rollers a day, and all of a sudden our sales would drop to zero,” he notes. “A counterfeit seller had shipped its products to Amazon's warehouses claiming to be ChomChom Rollers, priced them at a price much cheaper than ours, and won the Buy Box.”

Adopting Transparency meant that each genuine product had a code applied to it, allowing Amazon's warehouses to easily distinguish between authentic products and counterfeits. At the same time, Project Zero uses machine learning to scan listings and remove suspected counterfeits of its brand.

That still left a loophole that could be exported by counterfeiters, says Muller.

“We thought being part of Project Zero would solve our counterfeit problem, but the counterfeiters became more creative," he explains.

“Instead of pretending to sell an authentic ChomChom Roller, counterfeiters would rip off our utility patent, call their rollers by a different name, and sell [them] on Amazon.”

Utility Patent Neutral Evaluation programme

The problem has started to be solved with the launch last year of Amazon's Utility Patent Neutral Evaluation programme, which allows cases to be investigated by a neutral third-party evaluator with expertise in law and utility patents. The entire process takes no more than four months.

It works as follows. The patent owner approaches Amazon and identifies the potential infringer and product, as well as the patent that is being infringed. The patent claims are then evaluated by an independent attorney selected by Amazon, and if the complaint is upheld the offending product will be removed within 10 days of the decision.

The patent owner has to stump up $4,000 to start the process, and Amazon also demands the same amount from the suspected infringer. If they choose not to pay and accede to the judgment of the attorney then the product will be removed regardless.

If the patent owner wins the case, their money is returned, and the losing party’s payment is used to reimburse the attorney.

One limitation is that the programme can only be used for products sold via Amazon’s third-party marketplace, according to David Heckadon, an IP specialist with lawfirm Gordon Rees Scully Mansukhani. That excludes around 50 per cent of sales made through Amazon itself.

“In addition to pleasing patent owners, this new programme can also be good news for defendant sellers,” according to Heckadon.

Previously, sellers’ products were simply removed from Amazon’s website after a charge of patent infringement, and they had no recourse other than obtaining a declaration of non-infringement from a federal court.

The system is still in its beta phase and is accessible by invitation only for now, but according to ChomChom Roller provides utility patent owners with “a timely and inexpensive avenue to get counterfeit listings removed.”

To date, ChomChom Rollers has worked with Amazon to remove over 320 counterfeit listings, says Muller. “As a small business, we don't have a big legal fees budget,” he adds.