United States: False Patent Marking

Last Updated: March 10 2010
Article by Gerry Kraai and Justin Poplin

On December 23, 2009, the Federal Circuit Court of Appeals held that patent owners and others may be fined up to $500.00 for every product or advertisement bearing a false patent marking. False patent markings include the following:

  1. "Patent Pending", when no patent application is actually pending.
  2. Any patent number, if the patent has expired.
  3. Any patent number, if the patent does not cover the product marked.
  4. The patent number of another, if used without consent of the owner.
  5. Any other patent markings which are false.

Any person may sue for damages for false marking.

For details see below.

DAMAGES FOR FALSE PATENT MARKING CLARIFIED—ADDITIONAL CASES LIKELY

False patent marking may be as costly as infringement to the guilty parties. A recent Federal Circuit case has substantially raised the stakes for false marking, placing all patent owners, licensees, and even sellers at risk of being liable in suits that may be brought by any member of the public.

Patent markings have historically been used to deter copying and increase the patent owner's rights to damages in the case of infringement. Competitors who see patent markings are often less likely to copy patented products. Patent owners and licensees commonly use patent markings on products and related materials in order to maximize the damages that may be recovered in patent infringement cases – i.e., profits and/or royalties for a period of six years prior to the filing of a complaint for patent infringement – rather than being limited to damages accrued after actual notice of infringement to an infringer. The patent markings most commonly used under the patent statute are "Patent Pending" or "US Patent No. ______".

However, it is a violation of federal patent law (35 U.S.C. § 292) to use a false mark to intentionally deceive the public. The "false marking" statute carries a penalty of $500.00 per offense - half of which goes to the party that sues for false marking, and half of which goes to the federal government. The statute states as follows:

(a) Whoever, without the consent of the patentee, marks upon, or affixes to, or uses in advertising in connection with anything made, used, offered for sale, or sold by such person within the United States, or imported by the person into the United States, the name or any imitation of the name of the patentee, the patent number, or

the words "patent," "patentee," or the like, with the intent of counterfeiting or imitating the mark of the patentee, or of deceiving the public and inducing them to believe that the thing was made, offered for sale, sold, or imported into the United States by or with the consent of the patentee; or

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; or

Whoever marks upon, or affixes to, or uses in advertising in connection with any article the words "patent applied for," "patent pending," or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public – shall be fined not more than $500 for every such offense.

(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.

Traditionally, when a product is incorrectly marked as being patented, courts have looked to whether there was a good faith belief that the patent covered the marked product and generally found the requisite good faith belief to be present. In recent years however, the Federal Circuit emphasized the importance of false marking and made it clear that the cost of determining whether an article is covered by a patent should be borne by the patentee instead of the public. For example, in Clontech Labs., Inc. v. Invitrogen Corp., 406 F.3d 1347, 1356-57 (Fed. Cir. 2005), the court stressed the important public interest in permitting full and free competition in the use of ideas which are in the public domain, stating that, "the act of false marking ... externalizes the risk of error in the determination, placing it on the public rather than the manufacturer or seller of the article, and increases the cost to the public of ascertaining whether a patentee in fact controls the intellectual property embodied in an article."

Sensing a new source of revenue, individuals began suing patent owners for false marking when an expired patent number appeared on a product. The lawsuits typically assert that the patent owner knows that the expired patents do not protect the products, and that the public must bear the cost of determining if the products are in fact protected. One such suit is pending against Solo Cup Company in the Eastern District of Virginia. The plaintiff there is seeking a fine of $500 per item marked with an expired patent number, which some commentators have equated to roughly nine million dollars. The case is currently on appeal to the Federal Circuit Court of Appeals.

Whether the maximum fine of $500 per offense should be calculated on a "per product" or "per patent" basis has been unsettled. Until now. In December 2009, the Federal Circuit clarified that the fine of up to $500 must be calculated on a per item basis. Forest Group, Inc. v. Bon Tool Co., — F.3d ——, 2009 WL 5064353, *6 (Fed. Cir. 2009). For example, if a patent owner has 1,000 items falsely marked, the fine could be as much as $500,000. This decision makes it likely that many more patent owners and others will be sued for false marking.

Although the law is still evolving, it appears that there are three basic steps that may be taken to help avoid liability for false patent marking.

First, the basis for marking a product or other materials should be documented. Whether this is an opinion of competent legal counsel or the reasoned opinion of an engineer or supervisor, documentation ensures that there is a review process in place and may help show good faith belief sufficient to defeat a false marking claim.

Second, conditional language in patent markings (e.g., "this product is protected by one or more of " or "this product may be protected by") should be avoided. As the Federal Circuit has indicated (see above), if a company wants the benefits provided by patent marking, it should bear the costs associated with determining if a product is properly marked. Thus, the patent owner (and any licensee) should form a reasoned opinion as to whether a product is covered by a patent and document that reasoning (see the first step, above). If there is doubt regarding whether a product should be marked with a patent number, consult a patent attorney.

Third, policies should be implemented to police patent markings and remove incorrect and expired markings. The policing should occur with sufficient lead time to allow incorrect marks to be removed from products and advertisements and prevent incorrect markings from being placed on newer products.

All currently marked products in the marketplace should be reviewed to determine if the patent markings are correct, and a plan should be instituted to make any necessary changes. Since certain incorrect markings will be easier to detect than others, this review may be done in stages. The expiration of a patent or the abandonment of a patent application (patent pending), for example, will be easier to determine in many cases than whether the patent is covered by the marked product.

In most cases, the costs involved with implementing a policy to avoid falsely marking will be only a very small fraction of the costs associated with defending against a false marking lawsuit. Those responsible for patent markings should visit with their patent attorney about false patent marking and take steps, such as those set forth above, to minimize potential liability.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Gerry Kraai
 
In association with
Related Video
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
Accounting and Audit
Anti-trust/Competition Law
Consumer Protection
Corporate/Commercial Law
Criminal Law
Employment and HR
Energy and Natural Resources
Environment
Family and Matrimonial
Finance and Banking
Food, Drugs, Healthcare, Life Sciences
Government, Public Sector
Immigration
Insolvency/Bankruptcy, Re-structuring
Insurance
Intellectual Property
International Law
Litigation, Mediation & Arbitration
Media, Telecoms, IT, Entertainment
Privacy
Real Estate and Construction
Strategy
Tax
Transport
Wealth Management
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.