Battery firm’s plea to delist rival products ‘threatened’ Amazon
US firm’s take-down requests over Chinese rival were “actionable threats of patent infringement” | Case may be the first of its kind relating to Amazon IPR procedure, while Amazon was not a party in the case.
Take-down requests filed by a US battery company against a Chinese rival selling products on the Amazon platform were “actionable threats of patent infringement” against Amazon, according to the English High Court.
While Amazon was not a party in the case, Justice Meade found that The NOCO Company’s communications with Amazon over the delisting of competitor Carku’s car jump-starter products were “actionable threats and were not justified”.
The judgment was handed down on Thursday, August 4, following hearings in July.
NOCO’s communications—which claimed that Carku (Shenzhen Carku Technology) had infringed UK patent GB2,527,858—led to Amazon delisting various products sold on its site by the claimant’s distributors, Justice Meade added.
He also pointed out that there have so far been no cases in England & Wales relating to the Amazon IPR procedure, though similar issues have arisen at an interim stage, in Ebay's VERO (Verified Rights Owner) programme.
Claim and counterclaim
Carku had brought proceedings before the Patents Court of the English High Court in July 2020 seeking declarations that the patent was invalid and not infringed.
It also claimed damages for the loss of sales caused by the delisting requests, on the basis that they were unjustified threats to bring patent proceedings under section 70 of the Patents Act 1977.
NOCO counter-claimed for infringement, while also stating that its communications with Amazon were not threats, and were justified if they were.
Justice Meade concluded that the patent was invalid and that Carku’s products, for the most part, would not have infringed even if the patent had been valid.
Turning to whether the communications were actionable unjustified threats, Meade said: "The relevant communications assert the existence of patent rights, assert infringement of those rights, and call for action to be taken to end the alleged infringement. In most contexts they would be classic threats.”
Amazon’s IPR policy
Considering the current context, Meade said that the “high point of NOCO’s case is Amazon’s IPR policy, but for it to work as a defence to threats, it seems to me that it would have to be shown that Amazon delists automatically in response to any patent infringement assertion without regard to its own legal position”.
However, according to Meade, since Amazon sometimes allows products to remain on its marketplace following a patent complaint (with 30% of NOCO’s complaints against Carku rejected) this suggests that it is “not all-or-nothing and that the patent risk to Amazon, weighed against its desire to sell all that it can, enters the frame”.
Additionally, while the court recognised NOCO's evidence that it would never sue Amazon, it pointed out that Amazon was not aware of this.
“I have little or no hesitation in concluding that the communications to Amazon were threats of patent infringement proceedings against Amazon in the event that it did not delist Carku’s products,” said Meade.
The court has now ordered an inquiry into damages.
Ari Laakkonen, the partner leading the team at Powell Gilbert which represented Carku, said: “This litigation demonstrates that the UK court provides the flexibility required to control unlawful conduct in the modern online environment.
“Take-down requests can have the same commercial effect as a preliminary injunction, yet they are generally not accompanied by the safeguards that would routinely be ordered for preliminary injunctions, such as compensation for wrongful take-downs.”
Neither Amazon nor Taylor Wessing, which represented NOCO, responded immediately to WIPR’s request for comment.
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