Thursday, April 29, 2010

All that for $3,420?

In case you haven't been following, the patent community is facing a new cottage industry of false marking claims where plaintiffs pursue those who have marked their goods as patented.

Falsely marking your goods as patented (or otherwise importing that a patent application has been filed), with an intent to deceive the public can subject you to a fine for false marking under the U.S. Patent Act. (emphasis explained below) The law provides that an offender "Shall be fined not more than $500 for every such offense." The law also created a "qui tam" action, where private citizens can enforce the law on behalf of the government, with half the recovery going to the private citizen, and the other half going to the U.S. government.

This begged the obvious question -- how does one define "every such offense?" If I falsely mark 1,000,000 articles as patented, is that 1 offense, or 1,000,000?

Back in December, 2009, the Federal Circuit addressed this question, and explained that the language of the statute is clear.
The statute's plain language [35 U.S.C. § 292] requires the penalty to be imposed on a per article basis.
The Forest Group, Inc. v. Bon Tool, Co. up to $500 for each item. The Federal Circuit remanded that decision to the trial court to determine the proper fine. The result was a $6,840 penalty -- half going to the U.S.

This decision was combined with another recent development. Plaintiffs noticed that many products were on the market with old patent numbers. These patents had expired, so plaintiffs began to argue that marking a product with an expired patent constituted false marking. The issue being litigated there is whether or not putting an expired patent number on a product, in and of itself, satisfied the "intent to deceive" element required to sustain a false marking claim. In Pequignot v. Solo Cup, the Federal Circuit (which recently heard oral argument), will determine what is the proper legal test for determining intent to deceive in false marking cases.

Stay tuned...

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