Amazon Patents: A Case Study
Established in 1994, Amazon.com, Inc has obtained over 1,300 patents, mostly assigned to Amazon Technologies. The databases and e-commerce architecture storing Amazon’s information are some of the company’s earliest patents.
Some controversial and interesting patents include:
- 1-Click ‘Method and system for placing a purchase order via a communications network’ (1997)
- Taking photos of products in front of a white background with specific lighting, setup, and equipment (2014)
- A centralised roadway management system for self-driving cars (2015)
- A small, voice-controlled drone that could find a missing child in lost crowds (2015)
- An airborne, fulfillment center (flying warehouse) which uses unmanned aerial vehicles for delivery (2016)
Patents can be justified because of the high level of investment, risk, and creativity used to develop new innovations. As explained by James Dyson, great inventions often require many attempts and failures before the final working product is achieved. In technological products, consumers often only see the front-end. Behind the user interface are physical and digital infrastructures that enable the end result. In Amazon’s case, this includes the company’s database networks, warehouse architecture, and delivery systems. These patents are therefore justified because it is Amazon’s unique methods of distribution which allows it to be one of the most efficient, low cost retailers in the world. Through the protection of Amazon’s creations, consumers are able to benefit from the wide range of choice, high accessibility, flexibility, and lower prices that the e-commerce platform offers.
Consumers are most familiar with Amazon’s online platform but may not realise the power it has on general distribution. Although Amazon provides an e-commerce service, the company’s operations are heavily reliant on network delivery systems, an area that is highly patented and, whether deliberately or not, hidden away from consumers.
Delivery systems are a core part of Amazon Logistics, Inc.. In 2016, Amazon filed a patent for an underground transport system that uses conveyor belts and vacuum tubes for parcel and container delivery. The company believes it to be more efficient and reliable by avoiding road traffic. Amazon also aims to resolve traffic congestion on a larger scale. The self-driving car patent not only impacts strategic distribution, but also proposes a solution to a societal problem, creating a centralised roadway management system that communicates with other self-driving cars by exchanging information to co-ordinate vehicle movement s widely. Even though self-driving cars are not yet mainstream, Amazon’s patent gives the company great power for controlling the future of distribution automation when those technologies do become accessible to the general public.
Public interest may be concerned where patents are trivial, left unused, and forecloses the market.
With technology, many patents granted may never come to fruition. During the stages of creation, companies may have intended to use certain innovations, but then choose not develop them into real products for economic, technical, or policy reasons. Sometimes, it is unclear as to why companies file particular patents in the first place.
Amazon’s studio arrangement patent was granted because its description of photography against a white background with certain specifications was sufficiently nonobvious. The decision was controversial because the general technique to shoot on a background is common in photography. However, the patent was only granted for a specific way to shoot. It is perhaps unclear why Amazon filed such a patent but it reveals a curious systemic loophole within the US patent system. If sufficient specific and explicit information on widely used techniques are patentable, large corporations may abuse the system by filing seemingly pointless patents as a defensive, rather than protective, mechanism. The current system encourages companies to use patents to secure their position in the industry, a method allowed by the Office, without any consideration on the waste of resources to the detriment of consumers, particularly if patents are left unused.
An exciting 2017 development is the expiry of Amazon’s 1-Click patent. Although a great success for the company, this frictionless experience is not widely available to other e-commerce stores. Interestingly, the European Patent Office refused Amazon’s 2011 patent for 1-Click, describing the technology as “too obvious”, relying on prior art. For the e-commerce sector, the 1-Click patent may have been detrimental because this form of online checkout has allowed Amazon to build its brand as efficient and fast without, as may be argued by the EPO, truly creating something inventive. It can be argued that even with the patent expiry, consumers will still favour Amazon as the largest, most well-known platform, perhaps with not much merit to its specific technological system. In the short-run, consumers may have benefited from a seamless e-commerce experience but may now have to deal with a lower level of competition in the market.
Perhaps the law can respond by having different durations of patent exclusivity for different categories. It seems unfair that some innovations, such as the Anywayup Cup, will receive the same duration of protection as Amazon’s centralised roadway management system which have significant policy implications. Even without different durations, the fixed 20 year protection is an extremely long period of time. As technological advancements improve exponentially, people should be able to reproduce the same product sooner to open up the market and encourage further innovation.
This case study challenges the balance between patents and the public domain. The current system grants patents based on the merits of novelty, enabling disclosure, and nonobviousness. However, as demonstrated from the photography case, the system suggests that if applicants have enough funds, patents will be granted insofar as no such patent has been filed before and its scope is limited enough to satisfy nonobviousness. By failing to consider the feasibility or functionality of patent use, these applications can catch a wide range of potential infringements, presenting difficulties for independent users of general techniques who may have unintentionally or unknowingly followed the disclosure.
