Patent Marking: Federal Circuit Expands Liability Threat p y presents presents Complying With the False Marking Statute to Avoid Claims A Live 90-Minute Teleconference/Webinar with Interactive Q&A Today's panel features: Nathan Cummings, Partner, Cooley Godward Kronish , Reston, Va. Robert W. Unikel, Partner, Howrey , Chicago Thursday, March 18, 2010 The conference begins at: 1 pm Eastern p 12 pm Central 11 am Mountain 10 am Pacific You can access the audio portion of the conference on the telephone or by using your computer's speakers. Please refer to the dial in/ log in instructions emailed to registrations. CLICK ON EACH FILE IN THE LEFT HAND COLUMN TO SEE INDIVIDUAL PRESENTATIONS. If no column is present: click Bookmarks or Pages on the left side of the window. If no icons are present: Click View , select Navigational Panels , and chose either Bookmarks or Pages . If you need assistance or to register for the audio portion, please call Strafford customer service at 800-926-7926 ext. 10
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False Patent Marking False Patent Marking – – The State of the Law The State of the Law The State of the Law The State of the Law Robert Unikel Robert Unikel Howrey LLP Howrey LLP M March 18, 2010 h 18 2010 1
The False Marking Statute The False Marking Statute – – 35 U S C 35 U S C § 292 35 U.S.C. 35 U.S.C. § 292 292 292 Section 292 addresses three separate Section 292 addresses three separate offenses: • (1) counterfeit marking (by non-patentees) (1) counterfeit marking (by non patentees) (Section 292(a) ¶ 1) • (2) false patent marking (Section 292(a) ¶ 2) ( ) p g ( ( ) ¶ ) • (3) false patent pending marking (Section 292(a) ¶ 3) 2
Section 292(a) Section 292(a) ¶ 2 ¶ 2 – – Th The Most Common Basis For Suit The Most Common Th M M t C t C B B Basis For Suit i i F F S it S it Definition of Liability • (a) ¶ 2: 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 the same is patented for the purpose of deceiving the public patented, for the purpose of deceiving the public Definition of the Fine • (a) ¶ 4: Shall be fined not more than $500 for every such offense Qui Tam Provision • (b) Any person may sue for the penalty in which event one- (b) Any person may sue for the penalty, in which event one half shall go to the person suing and the other to the use of the United States 3
35 U.S.C. § 287 - The Other Marking Statute Th Oth M ki St t t (a)Patentees,… selling within the United States any patented article…, may give notice to the public that t t d ti l i ti t th bli th t the same is patented, either by fixing thereon the word “patent” or the abbreviation “pat.”, together with the number of the patent, or… to the package th b f th t t t th k wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the k d h ll b d b h patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter…. 4
35 U.S.C. § 35 U.S.C. § 287 287 - - The Other Marking Statute Th The Other Marking Statute Th Oth Oth M M ki ki St t t St t t Section 287 encourages affirmative marking of patented products products. Marking of patented products serves several salutary purposes, including (1) helping others to avoid innocent infringement; (2) encouraging patentees to give notice that infringement; (2) encouraging patentees to give notice that an article is patented; and (3) aiding the public to identify whether an article is patented. “The federal patent scheme provides a basis for the public t to ascertain the status of the intellectual property embodied t i th t t f th i t ll t l t b di d in any article in general circulation. . . . The [§ 287] notice requirement is designed ‘for the information of the public’ and provides a ready means of discerning the status of the i t ll intellectual property embodied in an article of manufacture t l t b di d i ti l f f t or design.” Bonito Boats, 489 U.S. 141, 161-62 (1989) 5
Why The Sudden Interest Why The Sudden Interest I I In False Marking? In False Marking? F l F l M M ki ki ? ? In 2007, Solo Cup was sued for False Marking , p g • First modern, reported case where false marking action brought by qui tam plaintiff • First reported case brought solely based on existence of expired patent markings Brooks Brothers Proctor & Gamble Gillette and Brooks Brothers, Proctor & Gamble, Gillette and others sued shortly thereafter More than 60 cases filed in February 2010 y 6
Pre- Pre -December 2009 December 2009 – – Limited Exposure for False Marking Li Limited Exposure for False Marking Li it d E it d E f f F l F l M M ki ki “Shall be fined not more than $500 for every such offense” London v. Everett, 179 F. 506 (D. Mass. 1910) – fine assessed on a “per decision basis” Because “[t]he purpose to deceive the public is an essential element of the offense,” the decision to mark is “where[] the intent is made manifest ” manifest. Because “[a] fraudulent design maintained throughout the continuous marking of a number of articles cannot be divided into as many distinct fraudulent purposes as there are distinct overt acts of marking,” where the marking is part of a single, continuous act there is “but one offense the marking is part of a single, continuous act there is but one offense … and only a single penalty … recoverable, though more than one article may have been marked.” Ultimate rationale: avoid damages that “accumulate as fast as a . . . stamping machine might operate” London rationale accepted and applied for nearly a century 7
Forest Group v. Bon Tool Co. Forest Group v. Bon Tool Co. – – R i i Raising the Stakes Raising the Stakes R i i th th St k St k Background Facts • Plaintiff-Patentee sued for patent infringement • After a claim construction ruling adverse to patentee, defendant counter- claimed for false marking • District Court ruled that neither the accused infringer s nor the patentee s District Court ruled that neither the accused infringer’s nor the patentee’s products were covered by the patent-in-suit Patentee’s “bad” facts • Patentee had been advised by two law firms that it could no longer mark its products products • Patentee claimed that it told its distributor to stop marking the product • But the product continued to be marked • There was no evidence ( e.g., documents, emails, or phone records) e e as o e de ce ( e g , docu e s, e a s, o p o e eco ds) that the patentee ever contacted the distributor 8
Forest Group v. Bon Tool Co. Forest Group v. Bon Tool Co. – – R i i R i i Raising the Stakes Raising the Stakes th th St k St k The District Court found False Marking based on g patentee’s knowledge – after the court’s order – that its patent did not cover its products However, the District Court followed London • District Court construed “$500 for every such offense” as $500 for each “decision to mark” $500 for each decision to mark • The District Court awarded $500 because there was only one order placed after the court ruled that the patent did not cover the product th d t 9
Forest Group v. Bon Tool Co. Forest Group v. Bon Tool Co.- - The Federal Circuit Speaks The Federal Circuit Speaks Th Th F d F d l Ci l Ci it S it S k k Opinion Issued on December 28, 2009 p , Upholds finding of intent to deceive • Basis: the patentee received two legal opinions, two Basis: the patentee received two legal opinions, two adverse claim construction rulings, and two court orders that its patents did not cover its products Reverses and remands on damages Reverses and remands on damages • Held that “$500 for every such offense” should be construed to mean a fine of up to $500 “on a per article basis” 10
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