Amazon Patent Pseudo-Court Can Halt Sellers With Scant Oversight

Latch.it, maker of popular locks for recreational vehicles, lost a patent case that closed off its most valuable sales channel after a decision from an unusual judge: Amazon.

Rival RVLock first tried suing in federal court over what it said was a trademark violation, then found success instead with a process known as Amazon Patent Evaluation Express. Latch.it agreed to the hearing before Amazon’s tribunal to avoid a much more expensive, lengthy fight in federal court over patent infringement.

It lost. A third-party evaluator, assigned by Amazon but paid for by the losing party, issued a one-line ruling that didn’t address Latch.it’s arguments at all. Amazon delisted their products, and APEX orders are final unless a court issues a conflicting decision.

“For the rights owner, it’s great,” said Latch.it’s attorney, Joseph Kuo of Saul Ewing LLP. “But for the alleged infringer, who, for a variety of reasons may not be in the wrong, it’s a terrible situation” because it can shut down a business without a true vetting of its rights.

There are no public dockets for these cases, because Amazon doesn’t release this information. It also doesn’t publicly disclose who its quasi-judges are or their opinions. And more of these bet-the-company fights are coming to Amazon than ever, according to a Bloomberg Law analysis of federal court cases involving APEX.

“Given that this is a very quick and limited adjudication format, it’s very possible some things are going wrong,” said Janet Freilich, a Boston University law professor who has written about the tribunal. “But we can’t see that.”

Amazon’s the largest online retailer where about 2 million businesses—from behemoths to upstarts—generated more than $440 billion in revenue and third-party commissions for the tech giant in 2025. That makes APEX an influential patent court, launched in 2018 to expedite infringement claims between competitors without directly involving federal courts.

Amazon APEX

APEX filings are only made public when an APEX party discloses it in a statement or a federal lawsuit, which is how Latch.it’s APEX fight was unveiled. To gain insight into the program, Bloomberg Law reviewed 140 lawsuits filed in federal court from 2019 through 2025 by Amazon sellers who sought to halt APEX proceedings or challenge the tribunal’s rulings, and a few patent owners attempting to expand their enforcement.

In 88.5% of those cases, sellers accused rivals of anticompetitive conduct. At least eight sellers went as far as to say illegitimate infringement complaints shuttered their businesses or cut off their biggest revenue stream. In one instance, smart lock company U-tec said an APEX decision cost it up to $70,000 per day in lost sales, according to Bloomberg Law’s analysis.

Accused sellers claim patent owners leverage APEX’s tight timeline and high stakes to place tremendous pressure on them to capitulate, particularly from sellers who derive most of their revenue from the platform, even if the invention is invalid. While settling avoids costly district court litigation, which often costs millions of dollars, the potentially “bad” patent remains unscathed.

Amazon declined to share statistics about the number of APEX disputes it’s fielded, but use of the venue is growing, according to data from federal lawsuits and interviews with over a dozen attorneys familiar with the program. Federal lawsuits stemming from the program exploded by more than 200% from 2022 to 2025, according to Bloomberg Law’s analysis.

Benefits of APEX

Amazon sellers have three options when an APEX complaint is filed against them: opt into Amazon’s procedure by paying a $4,000 fee upfront to defend themselves, resolve the claim directly with the patent owner, or file a declaratory judgment lawsuit in federal court, which suspends the APEX process until the case is resolved. If a seller doesn’t respond within three weeks, their product is taken down. If they proceed with APEX, an outside attorney selected by Amazon serves as a “neutral evaluator” and determines whether a product likely infringes a patent.

APEX can be a much cheaper, faster option for patent owners and alleged infringers seeking to avoid years of litigation in federal courts where infringement suits cost on average $665,000 to $3.6 million to litigate, depending on the potential damages at risk, according to the American Intellectual Property Law Association. The Amazon system is supported by inventors who argue the program is necessary to fight back against the rapid proliferation of knockoffs on the platform.

An Amazon spokesperson said patent owners and alleged infringers appreciate the significantly faster process at a lower cost. “If either party disagrees with the APEX outcome, they can go to court and Amazon will respect the court’s decision,” the spokesperson said.

Notably, Amazon said products it sells, like those sold under the “Amazon Basics” line, can’t face infringement complaints through APEX. The retailer declined to say why.

Patent owners can file lower stakes, non-APEX infringement complaints that don’t require payment or legal briefing, too, but permanent removal of the accused products isn’t guaranteed.

Adam Ullman, who previously sold a shoe-sanitizing product, said APEX was essential to taking down infringing products. Although the tribunal can slash an honest company’s sales, “an imperfect system that is fast and efficient is far better than only relying on something that is slow and expensive,” he said.

Exploitation Allegations

The same characteristics that make APEX attractive to patent owners—affordability, speed, and defense limitations—also make it ripe for exploitation.

Dozens of federal lawsuits reveal how the tribunal’s advantages can be abused by companies seeking to crush competitors or by so-called “patent trolls” that don’t make products but pursue profits via licensing deals.

“I’ve seen a lot of abuse, and we have a lot of clients that have suffered from that abuse,” said Michael Brandt, an attorney at AMZ Sellers who’s represented sellers accused of infringement. “This mom and pop which loses a product that is their bread and butter—maybe they’re paying the rent by virtue of their Amazon storefront—all of a sudden can’t sell anymore and their funds have been frozen, and they’re looking down the barrel of a BS IP claim for the most part.”

Patent owners have been accused of stretching their patents beyond what they actually cover in order to remove products that don’t copy their inventions. In one case, a lighting manufacturer said the patent owner claimed protection over features they had explicitly given up during the original patent examination by the US Patent and Trademark Office. When the patent’s validity was challenged and the PTO found the invention invalid as obvious, the owner voluntarily moved to amend the claims.

At least six lawsuits accuse patent owners of purposefully exploiting one APEX win to take down dozens of non-infringing listings that weren’t examined by the tribunal. Amazon allows patent owners to skip repeating the APEX process if a product is materially the same as one already found to infringe but sold by a different brand or seller.

All that’s needed is an ID number tied to their win. Those listings can be taken down without prior notice to the sellers.

The program is also open to IP owners who don’t sell products on Amazon, including non-practicing entities sometimes called “patent trolls.”

Pine Locks, a company registered in a small island in the Irish Sea, holds one US patent and doesn’t make products. It has filed APEX complaints against at least 11 sellers, according to court filings. An attorney who represented Pine Locks in an APEX dispute in 2024 didn’t respond to a request for comment.

APEX is still a “black box” since Amazon keeps much of the pseudo-court’s activity confidential, said Paul A. Ainsworth, partner at Sterne, Kessler, Goldstein & Fox PLLC who’s advised clients on the program. Unlike federal courts, both parties must agree to keep most of the case secret, and accused infringers are stripped of what’s usually their most powerful defense—arguing the patent is invalid due to earlier inventions.

This is how APEX can make “bad” patents more powerful while giving its evaluators as much influence as federal judges, said Freilich, the Boston University law professor. The sweeping ban issued against Latch.it is rarely issued by federal judges against accused infringers without meeting rigorous requirements.

The PTO has mostly or wholly invalidated at least five patents asserted to delist products on Amazon. In two other instances, the patent owner disclaimed the invention after a PTO challenge. Like federal litigation, PTO challenges are also costly, averaging $300,000 to $500,000 depending on the type of technology, according to the AIPLA.

Will Melehani, a partner at Orrick whose client Sansi LED lost at APEX but invalidated the underlying patent in federal court, said he’s “uncomfortable” that there’s “potentially a significant amount of patent rights being adjudged through this process without any judicial oversight.”

The “patent troll” that went after his client was “clearly” aiming to target unsophisticated sellers to extract payments, he said. The troll “ran into trouble” with his client because “it ended up being that the people they were threatening were actually going to defend themselves and a little bit more sophisticated,” he said.

Accused infringers can manipulate the APEX program, too. A federal judge in March ordered a seller to pay a patent owner $1.6 million after intentionally filing a lawsuit to block Amazon’s removal of products, despite knowing these products infringed.

The impact of APEX decisions stretches well beyond Amazon. Vice President Dharmesh Mehta told Congress in 2020 that other retailers use their decisions to take down items. EBay’s Verified Owners Rights program allows IP rights owners to report listings or items that infringe their protected rights. Walmart has a brand portal and an online claim form for owners of IP rights to report infringement on Walmart.com. EBay said it doesn’t use third-party adjudicators; Walmart did not respond to a query.

Amazon Judges

Amazon doesn’t disclose who its quasi-judges are but said it selects attorneys with significant experience in patent law, noting participants can challenge an evaluator’s assignment.

Bloomberg Law spoke to two adjudicators about their experience with the tribunal. Mark Wilson of Klarquist Sparkman LLP has handled about two dozen cases as an APEX evaluator since 2019, a role that came organically after his firm took on IP work for Amazon.

Wilson said Amazon selects attorneys with “extensive experience in patent law” and provides them with procedures to oversee the disputes, including time-frames, page limits, available defenses, and the prohibition on parties making ex parte contact with the evaluator.

When selected, Wilson said his firm runs a conflict check to ensure they don’t have a connection to any of the parties or attorneys.

He presumes Amazon has “some idea of who has technical expertise,” though not all the evaluators have technical degrees.

Ainsworth, the Sterne Kessler partner who’s not an APEX evaluator, said he cautions clients that they are leaving the decision to an individual, and without a path to appeal their decision besides turning to federal court. “And people make mistakes.”

Another evaluator, Ryan N. Phelan of Marshall, Gerstein & Borun LLP, began working as an APEX evaluator after his firm—which he said helped develop the program—asked if he was interested. Phelan, who’s also represented parties in 20 to 30 APEX cases, pushed back on critiques of the tribunal, saying “Amazon is just a publicly traded company that’s policing their own channels.”

A party that’s had a negative APEX decision “will certainly have bias in their statements and their briefings,” Phelan said.

The adjudicators earn $4,000 per case, but Amazon doesn’t pay them directly. Instead, the program instructs the patent owner and accused seller to each wire money to the evaluator, who keeps the fees paid by the loser. As for fairness, Wilson said he’s done the math and equally ruled for IP owners and accused infringers.

APEX adjudicators can issue decisions without any explanation. Amazon confirmed that evaluators aren’t required to provide reasoning, but said they may in appropriate situations. Ten orders reviewed by Bloomberg Law consist of a one-sentence judgment.

Kuo, Latch.it’s attorney, said this was the case for his client, whose evaluator “just kind of mailed it in” with a one-line decision.

“It’s worthless,” Kuo said. “If you’re going to offer a program that says we’re going to give you opportunity to have your rights evaluated by a neutral, arbitrary evaluator” then the least Amazon could do is “actually show you what the evaluation was, not just the conclusion.” Latch.it’s rival, RVLock, didn’t respond to a request for comment.

Evaluator Phelan agreed that APEX can be misused, too. In a federal case between TV mount-makers, Phelan argued that the patent owner wrongfully accused his client VIVO of infringement at APEX to “gain an unfair advantage.” The competitor, according to the suit, knew VIVO listings could be removed by Amazon, effectively serving as an injunction unlikely to be granted by a US court. The parties ultimately settled.

Even if a seller wants to fight back, Kuo said they may be in an untenable position having lost the income needed to fund a legal battle.

“The argument that you could sell through other platforms is technically true, the reality is that it’s not a viable option,” Kuo said, because Amazon “is where everyone’s selling.”