All clips tagged lawsuits

35 USC §292 provides that any member of the public can bring a court action alleging that a patent number has been falsely, improperly, used in connection with any product, with intent to deceive the public, can be fined up to $500 for every offense.

In 2009, the Court of Appeals for the Federal Circuit confirmed, in Forest Group v Bon Tool, that any member of the public can bring an action in Federal Court under this statute, and further confirmed that the fine can apply to every item which is so falsely marked.  Ultimately, a fine of $6840 was imposed for a relatively small number of items, which had been marked by a patent number, where the products had never been within the scope/subject matter of the patent in question.

That decision in Forest Group, opened the door to over 1500 lawsuits being filed, alleging patent false marking.  In most cases, the allegation was that a patent number was placed on a product after the patent had expired.  Since any member of the public could file such a lawsuit, without even alleging that the person filing the lawsuit was in any way harmed, a wide variety of opportunists filed such lawsuits.

While the lawsuits alleged wrongdoing on the part of the patentees, the real reasons for those lawsuits was to extract money from the defendant companies.  Of course, those costs are eventually passed on to customers in the way of higher prices.

A few of the patent false marking lawsuits have worked their way through the court system, but most of the defendant companies have settled their cases with payoffs, since the cost of the defense was greater than the cost of "settling".

In the meantime, a few less-reported actions have been taking place.

One company, BP America, decided to take the lead and fight their case.  The result was that BP won on the basis that the complaining party did not show "intent to deceive".

Where are we now?

On the basis of the work done by BP in winning its case, the courts are now requiring a much more specific statement, in the first paper filed by the complaining party, regarding proof of "intent to deceive".  Namely, if the complaining party does not provide specificity in its Complaint, the defendant patent owner does not even have to file an official "Answer" to the complaint.  Rather the defendant can get the case dismissed for lack of enough information in the Complaint to move the case forward.

In addition, legislation now moving through the US Congress as HR 1249 and S 23, and likely to pass in 2011, includes a provision that only the US government can start such lawsuits.

However, the provisions of false patent marking do still exist.  And while the "public" may no longer be able to start such lawsuits if the legislation passes, and while "intent" is harder to prove, a "false marking" defense can still be asserted as a counterclaim when a defendant is accused of patent infringement.  And that counterclaim can, in some instances, be quite costly to the patent owner.

So while the large number of lawsuits alleging "false marking" is probably a thing of the past, "false marking" is still alive and well as an element of US patent law.  And the patent-owning community has been placed on notice to be aware of the patent markings they are placing on their products, and to use good judgment in placing and keeping their patent markings on their products.