Patent Law Practice Center

Recent Developments and Potential Changes in the Litigation of False Marking Claims Under 35 U.S.C. § 292

Hoffman & Baron: The Current State of Patent Law

During late 2009 – 2010, we saw a significant number of remarkable decisions from the Supreme Court and the Federal Circuit that impacted the patent community.  From Bilski v. Kappos, to Forest Group v. Bon Tool, to Wyeth v. Kappos, to Ariad Pharmaceuticals v. Eli Lilly, just to name a few.  The following article discussing these decisions was written by Robert Neuner, Partner with Hoffman & Baron and presenter at PLI’s upcoming 5th Annual Patent Law Institute.  Here is an excerpt and a link to the article.

This paper discusses a range of cases decided in late 2009 and 2010 that reflect the current state of the law on issues with which each of us should have at least some familiarity.  Having decided Bilski, the Supreme Court has one again exercised its oversight over the Federal Circuit.  It will review three Federal Circuit decisions concerning the Bayh-Dole Act and the proofs necessary to establish (a) inducement of infringement and (b) patent invalidity.  There is also the blockbuster Myriad case now wending its way to a decision by the Federal Circuit. (more…)

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 public.  Forest 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.” (more…)

Qui Tam Plaintiffs Have Standing to Sue for False Marking under 35 U.S.C. § 292

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 Stauffer v. Brooks Brothers, Inc. decision.  The article discusses how the Stauffer decision may effect the large number of false marking suits now pending in district courts.  According to the authors, “although the Stauffer decision will not stem the tide of false marking suits – as many patent owners had hoped – several options remain for defending against these actions.”

The US Court of Appeals for the Federal Circuit has ruled that qui tam plaintiffs have standing to sue for false marking under 35 U.S.C. § 292. Stauffer v. Brooks Brothers, Inc., No. 2009-1428 (Fed. Cir. Aug. 31, 2010). Issuing a blow to patent marking defendants, this ruling is sure to impact the flood of cases currently pending in district courts, many of which were stayed pending resolution of Stauffer.

Raymond Stauffer—a patent lawyer himself—brought the suit after he discovered that several bow ties he purchased from Brooks Brothers were marked with two expired US Patents. The district court dismissed Stauffer’s suit for lack of standing, holding that he had not sufficiently alleged an injury to the United States and that any allegations that the alleged false marking quelled competition were too conjectural or hypothetical to constitute injury in fact. (more…)

False Marking: A Patent Litigator’s Perspective

 

I recently read that on the heels of the Forest Group Inc. v. Bon Tool Co.,  decision more  than 100 plaintiffs have filed false marking suits in 2010.  I’m sure that is a scary statistic to the dozens of companies that are potentially facing false marking suits.  I had an opportunity to discuss the issue of false marking with two of our Patent Center Contributors, Brandon Baum, a partner and intellectual property litigator at Mayor Brown LLP and Robert C. Faber, partner and patent prosecutor at Ostrolenk Faber LLP.  While some of their viewpoints are similar, Baum and Faber both have a unique perspective on the topic.

Here is what Brandon Baum, the “patent litigator” , has to say on the issue…

Me: Do you think we’ll see companies begin to stop falsely marketing products in response to the suits? 

BB:  Yes, though the question presumes that companies are “falsely” marking (i.e., with intent to deceive) rather than inaccurately marking (i.e., without intent to deceive).  It will become a priority for companies’legal departments to monitor patent marking and, particularly with respect to expired patents, remove them from packaging. 

Me: Do you believe false marking necessarily causes injury?

BB:  As a general proposition, I think we would all agree that one should not mark a product as being covered by a patent when one knows it is not. I believe that Congress could reasonably believe that false marking causes injury, just like any other sort of false labeling of a product.  (more…)