16-1290

United States Court of Appeals

for the Federal Circuit
MILO & GABBY LLC AND KAREN KELLER,
Plaintiffs-Appellants,
v.
AMAZON.COM, INC.,
Defendant-Appellee,
DA FANG SUN, AKA SETH L, CHONGQIN WORLD FIRST ELECTRONIC
COMMERCE CO., LTD., AKA WOTEFUSI, T. LIU, AKA BIN DEAL,
FAC SYSTEM, AKA FAC SYSTEM LLC, DINGDING ZOU,
AKA HAPPY SUNDAY, QIUMEI ZHANG, AKA HITECE, CHARLOTTE XIA,
NIMBLE JOY, AMANIALARASHI2165, MONAQO,
Defendants.

Appeal from the United States District Court for the Western District of Washington in
Case No. 2:13-cv-01932-RSM, Judge Ricardo S. Martinez

MOTION TO REISSUE PANEL DECISION AS

PRECEDENTIAL BY DEFENDANT-APPELLEE AMAZON

John M. Hughes Gregory G. Garre

Katherine L.I. Hacker Jonathan Y. Ellis
Joseph W. Doman LATHAM & WATKINS LLP
BARTLIT BECK HERMAN 555 Eleventh Street, NW, Suite 1000
PALENCHAR & SCOTT LLP Washington, DC 20004
1899 Wynkoop Street, 8th Floor (202) 637-2200
Denver, CO 80202
(303) 592-3100 Counsel for Defendant-Appellee
AMAZON.COM, INC.
July 10, 2017
 Pursuant to Federal Circuit Rule 32.1(e), Defendant-Appellee Amazon.com, Inc.

requests this Court to reissue as precedential its May 23, 2017 opinion, Dkt. No. 63-2,

(Opinion). Amazon has notified Plaintiffs-Appellants Milo & Gabby LLC and Karen

Keller (collectively, Milo & Gabby) that Amazon would be filing this motion. Fed.

Cir. R. 32.1(e). Milo & Gabby supports this motion, agreeing that the Opinion should

be reissued as precedential. Amazon knows of no case pending in this Court that would

be determined or affected by the reissuance of the Opinion as precedential. Id.

The Opinion should be reissued as precedential because it add[s] significantly

to the body of law. C.f. Fed. Cir. R. 32.1(b). Specifically, the Opinion is the first time

this Court has addressed, by applying its precedent interpreting sale under 35 U.S.C.
271 of the Patent Act, whether the operator of an online marketplacehere Amazon

as operator of Amazon.comcan be considered a seller for goods sold by third-party

sellers on the marketplace. The Opinion is likewise the first to implicitly address
whether Amazons provision of logistical and shipping services for third-party sellers

on its online marketplace renders it a seller under the Patent Act. The Courts

thorough and well-reasoned opinion shows that the answer to both of those questions

must be no. Publishing the Opinion as precedential will provide clear guidance to

plaintiffs and district courts that online marketplaces, such as Amazon and eBay, cannot

be held liable for direct infringement under the Patent Act for goods sold by third
parties on their websites.

Courts have recognized that [t]here is no controlling decision as to whether an

online marketplace . . . can be liable for direct patent infringement. Alibaba.com Hong
Kong LTD v. P.S. Prods., Inc., Case No. 10-04457 WHA, 2012 WL 1668896, at *3 (N.D.

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Cal. May 11, 2012); Mophie, Inc. v. Shah, No. SA CV 13-01321 DMG (JEMx), 2014 WL

12603184, at *2 (C.D. Cal. Aug. 25, 2014) (same). Because of this lack of case law,

litigants have brought direct patent infringement claims arguing that online

marketplaces like Amazon are liable for sales made by third-parties involved. See Area

55, Inc. v. Amazon.com, Inc., No. 11-CV-00145-H (NLS), 2012 WL 12517661, at *3 (S.D.

Cal. May 3, 2012) (denying motion for summary judgment, holding that there was a

genuine question of fact about whether Amazon sold infringing products to buyers

within the meaning of 35 U.S.C. 271). Litigants likewise continue to sue other online

marketplaces like eBay for direct patent infringement claims. See, e.g., Blazer v. eBay, Inc.,

No. 1:15-CV-01059-KOB, 2017 WL 1047572, at *2 (N.D. Ala. Mar. 20, 2017). These
recurring lawsuits spurred eBay to file an amicus curiae brief in this case, urging this

Court to definitively answer a question of enormous practical importance . . . whether,

under 35 U.S.C. 271(a), a marketplace operator such as eBay or Amazon sells each
of the goods listed on its website . . . . Brief of eBay Inc. as Amicus Curiae in Support

of Appellee Amazon.com, Inc. and Affirmance, Dkt. No. 28 at 1.

Although the Court did not directly answer that question in the Opinion, the

analysis on other issues provides helpful guidance. The Court affirmed the district

courts judgment that Amazon did not directly infringe Milo & Gabbys patents on the

ground that Milo & Gabby waived its argument that Amazon was the seller of the
patented pillow cases before the district court. See Opinion at 11. The Court,

nevertheless, implicitly answered that important question when it went on to decide

that Amazon did not sell the pillowcases under 17 U.S.C. 106(3) of the Copyright Act:

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 Because the third-party sellers retain title to the pillowcases at all times
and Amazon, as relevant to this case, merely provides an online
marketplace followed by logistical and shipping services after the third-
party seller has completed its transaction with a buyer, Amazon is not a
seller in this case for the purposes of copyright infringement under
17 U.S.C. 106.
Id. at 22. To reach that decision, the Court turned to its own case law interpreting the

ordinary meaning of sale when addressing the term under 271 and related patent-law

provisions. Id. at 1222 (citing NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1319

(Fed. Cir. 2005)). The Court methodically applied dictionary definitions, Uniform

Commercial Code provisions, and Federal Circuit precedent to determine that the

presence or absence of passage of title is a significant indicator of whether a sale has

occurred in the patent law context. Opinion at 14 (citing Medicines Co. v. Hospira, Inc.,
827 F.3d 1363, 137576 (Fed. Cir. 2016)). Moreover, the Court rejected Milo &

Gabbys arguments that certain U.C.C. sections provided an exception to the general

rule that a sale involves the transfer of title[.] Id. at 1519 (citing U.C.C. 9-319; 9-
102(20); 2-707; and 2-326).

The Court also rejected Milo & Gabbys argument that Amazon was transformed

into the seller of the pillowcases sold by one third-party seller, FAC System, because it
used the Fulfillment by Amazon service, which provides shipping and logistical services.

[W]hile Amazons services made it easier for third parties to consummate a sale, the

third parties remained the sellers because it was them, not Amazon, who listed the

product for sale, consummated the sale, and transferred title to the buyer. Opinion at

15.

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 In short, the Courts analysis forecloses future claims against Amazonand

other similarly situated defendantsfor direct patent infringement based on an

infringing product sold by a third party on Amazon.com. That analysis is an important

contribution to the Courts 271(a) jurisprudence. By making the Opinion

precedential, the Court would show district courts that direct patent infringement

claims against online marketplaces such as Amazon and eBay should fail as a matter of

law. Providing this guidance could help avoid unnecessary costs of litigating future

cases past the pleading stage. C.f. Area 55, 2012 WL 12517661, at *3 (denying Amazons

motion for summary judgment that it had not sold third-partys infringing products

within the meaning of 271(a)).

For the foregoing reasons, Amazon requests that the Court reissue the Opinion

as precedential. If the Court grants the request, the Opinion may be revised as

appropriate. Fed. Cir. R. 32.1(e).

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July 10, 2017 Respectfully submitted,

/s/ John M. Hughes

John M. Hughes
Katherine L.I. Hacker
Joseph W. Doman
BARTLIT BECK HERMAN
PALENCHAR & SCOTT LLP
1899 Wynkoop Street, 8th Floor
Denver, CO 80202
Tel: (303) 592-3100
Fax: (303) 592-3140
john.hughes@bartlit-beck.com
kat.hacker@bartlit-beck.com
daniel.taylor@bartlit-beck.com

Counsel for Defendant-Appellee

AMAZON.COM, INC.

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 PROOF OF SERVICE

I hereby certify that on July 10, 2017, I electronically filed the foregoing Motion

to Reissue Panel Decision as Precedential of Defendant-Appellee Amazon with the

Clerk of the United States Court of Appeals for the Federal Circuit using the CM/ECF

system, which will send notice of such filing to all registered CM/ECF users. I further

certify that the foregoing was served via electronic mail upon the following:

Philip P. Mann
Timothy J. Billick
MANN LAW GROUP
1218 Third Avenue, Suite 1809
Seattle, Washington 98101
(206) 436-0900
phil@mannlawgroup.com
tim@mannlawgroup.com
John Whitaker
WHITAKER LAW GROUP
1218 Third Avenue, Suite 1809
Seattle, Washington 98101
(206) 436-8500
john@wlawgrp.com
Counsel for Plaintiff-Appellant

/s/ John M. Hughes

John M. Hughes
Counsel for Defendant-Appellee
AMAZON.COM, INC.