Pleading Intent to Deceive in False Marking: How much is enough?


Written by Scott Daniels (partner in Westerman Hattori Daniels & Adrian and Practice Center Contributor).

It is undisputed that a qui tam claim for false patent marking under 35 U.S.C. § 292 requires, in addition to marking an unpatented article, that the marking be done with intent to deceive the publicForest Group, Inc. v. Bon Tool Co., 590 F.3d 1295, 1300 (Fed. Cir. 2009).  But how specifically must the qui tam plaintiff plead “intent to deceive” to comply with the Rule 9(b) requirement that allegations of fraud be made with particularity?  Unfortunately, the CAFC declined to answer that question in Stauffer v. Brooks Brothers, Inc., decided last month.  Without guidance from the CAFC, the answer appears to depend upon the court in which the complaint is filed.

At the more lenient end of the spectrum is Judge Robert W. Gettleman who in Simonian v. Oreck, Case No. 1:10-cv-01224 (N.D. Ill, August 23, 2010) denied the Defendant Oreck’s motion under Rule 12(b)(6) to dismiss because of the failure of the complaint to make more than a general allegation of deceptive intent. Judge Gettleman applied the who-how-what-when-where standard that has been used by a number of courts.  He concluded that Plaintiff Simonian’s complaint adequately stated that Oreck (the who) had deliberately falsely marked (the how), the particular product (the what), the marking was current (the when), within the District and throughout the United States (the where).  He also found that the allegations, despite their generality, created a presumption: “By alleging that defendants had knowledge of their false marking and that the marks were false creates a rebuttable presumption of deceptive intent.”

Other courts have taken a similarly generous approach to pleading deceptive intent.  In Luka v. Revolon, Inc., Case No. 1:10-cv-02509 (N.D. Ill., September 1, 2010), Judge Matthew F. Kennelly denied a motion to dismiss by inferring intent to deceive from the general allegations in the complaint.  In Simonian v. Irwin Industrial Tool Co., Case No. 1:10-cv-01260 (N.D. Ill., August 27, 2010), Judge George W. Lindberg denied a similar motion to dismiss.  “Plaintiff alleges that [Defendant] Irwin knew or should have known that the patent marked on the products at issue had expired, and alleges that Irwin intentionally included the expired patent on the products for the purpose of deceiving the public.”  These allegations, Judge Lindberg concluded, constituted sufficient pleading.

At the other end of the spectrum is a very thoughtful decision rendered by Judge Sue Robinson in Brinkmeier v. BIC et al., Case No. 1:09-cv-00860 (D. Del., August 25, 2010).  There, Plaintiff Brinkmeier alleged that Defendant BIC knew or should have known that the patents expire, that the marked patents had expired, and that the products in question were not covered by the expired patents.  Judge Robinson dismissed the case finding that Brinkmeier had “pled no facts to show that BIC intentionally attempted to deceive the public.” Further, “allegations that BIC is sophisticated and employs experienced counsel do not suggest intent to deceive.” She concluded that “it appears just as likely on the facts pled that BIC made a marking error” and dismissed the case.

Other judges have taken an approach similar to that of Judge Robinson.  In Simonian v. Global Instruments, Case No. 1:10-cv-01293 (N.D. Ill., August 26, 2010), Judge Elaine E. Bucklo dismissed a complaint because of its failure to recite specific facts indicating deceptive intent.  See also Simonian v. Cisco Systems, Inc., Case No. 1:10-cv-01306 (N.D. Ill., June 17, 2010) where Judge Samuel Der-Yeghiayan also rejected allegations of deceptive intent based on the fact that the defendant was a “sophisticated company.”

These differences among the District Courts may be resolved through the petition filed Tuesday at the CAFC in Simonian v. BP Lubricants USA, Inc., (N.D. Ill., Case No. 1:10-cv-01258).  There, BP seeks a writ of mandamus from the CAFC ordering the District Court to dismiss Simonian’s false marking complaint for failing to allege deceptive intent with sufficient particularity.  Simonian’s complaint, BP asserts, makes only “general allegations of intent to deceive based upon information and belief.”  BP argues that intent is especially difficult to prove where the false marking alleged is based only on expiration of the patent, citing the CAFC’s recent decision in Pequignot v. Solo Cup Co., 608 F.3d 1356 (Fed. Cir. 2010)

Wednesday the CAFC ordered Simonian to reply to BP’s petition within 14 days.  Presumably, the CAFC intends to give serious consideration to BP’s request and, perhaps, to give the trial courts clearer guidance.

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