Patent Law Practice Center

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…)

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…)

Oral Argument In Key False Marking Case: Stauffer V. Brooks Brothers, Inc.

Jeanne Gills (partner at Foley & Lardner and Practice Center Contributor) and Mary M. Calkins (senior counsel at Foley & Lardner) passed along this news alert discussing the August 3rd oral argument heard by the Federal Circuit in the Stauffer v. Brooks Brothers, Inc. false marking litigation….

On August 3, 2010, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit (C.J. Rader, J. Lourie, and J. Moore) heard oral argument in Stauffer v. Brooks Brothers, Inc., Nos. 09-1428 et al (Stauffer). Stauffer is the latest in a line of appeals from district court decisions in false marking suits brought under 35 U.S.C. § 292. The panel mostly focused on two standing issues: (1) the requirements for an individual plaintiff, who is not a competitor of the defendant allegedly committing false marking, to have standing to sue for damages under Section 292; and (2) whether the United States may intervene during the initial phase of a Section 292 action dealing with standing on the pleadings, rather than later during the merits phase of the action. Given the several hundred false marking cases that have been filed during the past year, including those that have been stayed pending a decision in Stauffer, the Federal Circuit’s ruling could impact whether these cases survive on jurisdictional grounds or will proceed on the merits.

Background

Section 292 prohibits marking an “unpatented article” with words indicating that the article is patented “for the purpose of deceiving the public,” and establishes a monetary fine of up to $500 per falsely marked article. The statute further provides that “[a]ny 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.” (more…)