False Marking Statute Ruled Unconstitutional by Ohio District Court

Mayer Brown’s Partner James R. Ferguson passed along this article he wrote with colleagues Richard M. Assmus and Emily C. Melvin on the recent Unique Product Solutions v. Hy-Grade Value decision wherein Judge Polster of the U.S. District Court for the Northern District of Ohio struck down the false marking statute as violating the “Take Care” Clause of Article II of the U.S. Constitution. The article discusses how the decision could affect the numerous false patent marking cases pending in district courts throughout the country.

The Northern District of Ohio has become the first court to strike down the qui tam provision of 35 U.S.C. § 292. Employing the “Take Care” clause of the Constitution, Judge Dan Aaron Polster ruled on February 23, 2011, that the false marking statute lacks the statutory controls necessary to pass constitutional muster. Unique Product Solutions, Ltd. v. Hy-Grade Valve, Inc., Case. No. 5:10-cv-1912 (N.D. Ohio, Feb. 23, 2011). (more…)

CAFC Rules For False Marking Plaintiff In Stauffer Case

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

The CAFC (Lourie, Rader & Moore) today removed one of the major hurdles facing individuals pursuing qui tam actions against others for false patent marking.  In Stauffer v. Brooks Brothers, the CAFC ruled that 35 U.S.C. § 292 permits individuals to “stand in the government’s stead, as assignees of the government’s own claims.” There is no requirement for standing under Rule 12(b)(1) that the individual qui tam plaintiff have, itself, suffered injury from the alleged false marking.

Raymond Stauffer had sued Brooks Brothers and its parent company, Retail Brand Alliance, for marking the mechanism on their bow ties with the numbers of two patents, both of which had expired in the 1950’s.  Stauffer asserted that this identification of the patents constituted false marking under § 292, which provides for a fine of not more than $500 per violation.  It also provides that “any person” may sue for that fine, splitting any recovery with the United States.

Defendants moved to dismiss under Rule 12(b)(1), arguing that Stauffer lacked standing.  The trial judge first stated that Stauffer, as a qui tam plaintiff representing the United States, must establish that U.S. has suffered “an injury in fact,” that the injury was caused by Brooks Brothers, and that a court could redress that injury.  The trial judge then found that Stauffer had failed to allege injury to the U.S. in his complaint, and any assertions that Stauffer himself had been injured would not satisfy the standing requirement.  The judge therefore dismissed the case. (more…)