Marking a product with the number of its underlying patent is good practice––it provides notice of the patent and is a prerequisite for certain types of damages in infringement actions. Falsely marking a product, however, can create problems and recent developments in false marking law merit a closer look at marking practices. Recent cases have increased the potential bounty available in false marking suits.
Section 292 of the Patent Act provides that:
Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word “patent” or any word or number importing that the same is patented, for the purpose of deceiving the public . . . Shall be fined not more than $500 for every such offense.
35 U.S.C. § 292(a). Under § 292(b), half of the $500 fine is kept by the plaintiff, and the other half goes to the United States. According to the statute, “[a]ny person may sue for the penalty.” This provision is not new, but recently the Federal Circuit made clear that the $500 fine is awarded for each wrongly marked article. Previously, some courts had not interpreted “offense” to mean each wrongly marked article.
In Forest Group, Inc. v. Bon Tool Company, 590 F.3d 1295 (Fed. Cir. Dec. 28, 2009) the lower court, and a court in a parallel proceeding, had issued claim constructions of the patent-in-suit that required elements not met by the plaintiff patentee’s own products. Despite these orders, the plaintiff continued to label its products with the patent number. The lower court then issued a single $500 fine to the plaintiff based on this continued marking in the face of the court orders. The Federal Circuit affirmed the lower court’s decision that the plaintiff had engaged in false marking, but announced that the marking statute “clearly requires that each article that is falsely marked with intent to deceive constitutes an offense . . . .” The court remanded the case for a determination of the total penalty based on each item sold with the false marking.
The Federal Circuit did not provide clear guidance on what it takes to prove an intent to deceive, but it did make clear that its opinion was not meant “to suggest that multiple claim constructions or summary judgments are required before the requisite knowledge for false marking can be found.” Indeed, more frequently, false marking problems arise when marking continues even after the patent has expired. If false marking is proven, a company that sells thousands of units of product a year may quickly find itself on the receiving end of a large fine if it knowingly marks its products with inapplicable patent information.
The key lessons: (1) Implement a regular program to ensure that markings are removed when a patent expires. (2) Review markings after claims construction and summary judgment decisions. (3) Seek an independent counsel’s opinion when false marking is a potential problem. (4) Only use “patent pending” after filing for patent protection.
- Monty Agarwal and Aaron Schur
