Facts

In patent proceedings concerning battery-powered car jump starters, having found that the UK patent owned by the defendant, The NOCO Company, was invalid for obviousness and for the most part not infringed, Mr Justice Meade considered the allegation by the claimant, Shenzhen Carku Technology Ltd, that NOCO had made unjustified threats.

Carku said that NOCO, a competitor of Carku, had, using the Amazon UK IPR complaints procedure, complained to Amazon UK of sales and offers to sell car jump starters on its website under various distributor brands, which had led to Amazon removing the products from sale on amazon.co.uk. NOCO had told Amazon that it considered that Carku’s products infringed its patent.

NOCO, which had a first party (“1P”) relationship with Amazon (meaning that Amazon buys products directly from NOCO to sell on Amazon’s own account), denied that its communication to Amazon amounted to “threats of infringement proceedings”.

Arguments of the parties

Carku said that the notifications made by NOCO were threats of patent infringement against Amazon itself, and if not against Amazon then at least against the distributors of Carku’s products. Carku submitted that the whole purpose of NOCO’s patent is to control competition by third parties, which evidenced a prima facie intention to exercise its patent rights. Carku also pointed to NOCO’s and Carku’s status as competitors, both with products for sale via Amazon’s UK website (although by different arrangements). When Carku’s products were removed from sale, NOCO benefitted. Carku had also complained about infringement by NOCO’s products of Carku’s patents, but with much less success.

NOCO relied on Amazon’s IPR policy, arguing that Amazon has a customer-centric approach to IP infringement and that the purpose of its IPR policy is to protect consumers from infringing products. Therefore, NOCO said, notifications made via the infringement form are not perceived by Amazon as threats, but as “a welcome bit of assistance in its customer-centric goal to achieve zero IPR infringements on its website”. Therefore, NOCO said, Amazon sees itself as an arbiter and enforcer of IP rights, not as a target, potential infringer and defendant to a complaint.

The law

Considering the case law on threats made via an online IP complaints portal, Mr Justice Meade concluded that the question was whether, objectively speaking, there was a threat of legal proceedings. That depended on the facts. In Quads 4 Kids v Campbell [2006] EWHC 2482 (Ch), while Mr Justice Pumfrey (as he then was) had found that there was arguably a threat made in the notification to eBay via eBay’s VeRO programme, he had also recognised that it was possible that, in the right factual context, a consensual request to remove a product from sale might be no more than that, and not a threat, if the recipient was confident that there was no chance of being sued.

Decision

Threats against Amazon

Meade J found that NOCO’s communications to Amazon asserted the existence of patent rights, asserted infringement of those rights, and called for action to be taken to end the alleged infringement. In most contexts, he said, these communications would amount to threats.

Meade J said that for NOCO’s defence based on Amazon’s IPR policy to work, it had to show that Amazon automatically delists products in response to any patent infringement assertion without regard to its own legal position. NOCO could then argue that Amazon does not feel threatened with legal proceedings because its response is pre-ordained by its own policy. However, Meade J did not accept that this is how Amazon’s policy works.

The evidence showed that Amazon sometimes allows products to remain on its platform following a patent complaint. This strongly suggested that it is not “all or nothing” and that the patent risk to Amazon, weighed against its desire to sell, was relevant. No detail was provided as to the 30% rejected complaints, but Meade J said there was enough to divine that Amazon makes a judgment in its own self-interest and that the policy is not just to delist blindly.

NOCO’s evidence was that it would never sue Amazon. While that may be true, Meade J said, Amazon did not know that. Amazon might well make a judgment that it is unlikely to be sued by any 1P vendor, but if it sold enough of an alleged infringing product then how was it to know that NOCO might not “give in to greed or commercial necessity and sue?” There was no evidence of any reassurance by NOCO to Amazon that it would never sue. Further, legal advice had been taken by Amazon, whose solicitors had communicated with the solicitors acting for Carku.

Therefore, Meade J concluded that the communications to Amazon were threats of patent infringement proceedings against Amazon if it did not delist Carku’s products.

Threats against third parties

Evidence of communications between NOCO and Amazon showed that NOCO had sued third party distributors. One email showed NOCO seeking to persuade Amazon that Carku’s allegations that NOCO’s products infringed Carku’s patents were not to be taken seriously, but that NOCO was serious about protecting its patents as evidenced by the lawsuits it had filed and continued to file against named companies “and many others”. NOCO had no answer to this. In Meade J’s view, Amazon would have understood that if it carried on selling, NOCO would be ready willing and able to sue the relevant third-party distributors.

Conclusion

Meade J concluded that NOCO’s communications to Amazon were actionable threats and were not justified. (Shenzhen Carku Technology Co Ltd v The NOCO Company [2022] EWHC 2034 (Pat) (4 August 2022) — to read the judgment in full, click here).