In the United States, patent owners or licensees are required to inform alleged infringers of their possibly infringing behavior prior to being able to recover damages for the infringement of a valid U.S. patent. (1) Marking a product with the applicable patent number provides the requisite notice. (2) However, failure to monitor products marked with a patent number can have dire consequences.
35 U.S.C § 292 prohibits the marking of an unpatented article as being “patented.” § 292 states that “[w]hoever 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… [s]hall be fined not more than $500 for every such offense.” (3)
Currently, any person may bring a lawsuit for a violation of 35 U.S.C. § 292 and get half of any fines levied against the entity responsible for the false marking. (4) The other half of the fine goes to the United States government. (5)
While § 292 only provides for a civil monetary fine, the fine is up to $500 per offense. The Court of Appeals for the Federal Circuit, the court which hears appeals in all patent cases, held that an “offense” under the statute is each separate item that bears the false patent label. (6) Accordingly, the damages could easily climb into the millions of dollars.
However, to be fined under § 292, there must be a showing that there was an “intent to deceive the public.” (7) The Court of Appeals for the Federal Circuit held that there is no intent to deceive the public when there was a “reasonable belief that the articles were properly marked.” (8)
Recently, the United States District Court for the Northern District of Ohio found that 35 U.S.C. §292 was unconstitutional. (9) However, the Court of Appeals for the Federal Circuit has yet to determine the constitutionality issue. Additionally, the America Invents Act passed by the Senate would limit a cause of action under 35 U.S.C. §292 to the United States government or to an entity suffering a competitive injury as a result of the alleged false marking. (10) The America Invents Act merely narrows the potential pool of plaintiffs and does not alter the amount of damages available.
Therefore, under the Court of Appeals for the Federal Circuit’s interpretation of the statute, it is important to have a plan in place to monitor patent marking and to ensure that the plan is actually implemented. Additionally, the Court of Appeals for the Federal Circuit has held that obtaining the opinion of outside counsel with regards to the formation of a monitoring plan and to ensure that the items marked are covered by the applicable patents are facts which may tend to show that a business did not intend to deceive the public. (11)
To reduce the risk of violating the false marking patent law, businesses which own or license patents should consider obtaining the opinion of a competent patent attorney to assist in developing a plan to monitor patent marking and to determine if products and processes which are currently being marked with patent numbers are indeed covered under the listed patents.
(1) 35 U.S.C. § 287(a).
(3) 35 U.S.C. § 292(a).
(4) 35 U.S.C. § 292(b).
(5) 35 U.S.C. § 292(b).
(6) Forest Group v. Bon Tool, 590 F.3d 1295, 1304 (Fed.Cir.2009).
(7) Clontech Labs. Inc. v. Invitrogen Corp., 406 F.3d 1347, 1352 (Fed.Cir.2005).
(8) Id., at 1353.
(9) See Unique Product Solutions, Ltd. v. Hy-Grade Valve, Inc., 2011 WL 924341 (N.D.Ohio 2011).
(10) S. 23, 112th Cong. (as passed by Senate, March 8, 2011).
(11) Pequignot v. Solo Cup, 608 F.3d 1356, 1364 (Fed.Cir. 2010)