United States: Federal Circuit Remands Novel Issue On Patent Marking Requirement

On April 17, 2017, the United States Court of Appeals for the Federal Circuit vacated an award of more than $15 million in damages because a plaintiff's licensee failed to mark patented articles. Rembrandt Wireless Technologies, LP v. Samsung Electronics Co., No. 2016-1729 (Fed. Cir. Apr. 17, 2017). The decision underscores the importance of not only marking patented articles, but also requiring licensees to mark licensed articles. However, this decision left unanswered whether patent-marking applies on a claim-by-claim rather than a patent-by-patent basis.

In March 2013, Rembrandt sued Samsung for patent infringement in the United States District Court for the Eastern District of Texas. A jury found that Samsung had infringed Rembrandt's asserted patents and awarded Rembrandt $15.7 million in damages. Samsung appealed, inter alia, the denial of its motion for judgment as a matter of law to limit Rembrandt's damages for failure to mark patented articles. The Federal Circuit affirmed the liability rulings but vacated and remanded the district court's denial of Samsung's motion to limit damages for failure to mark.

Samsung moved the district court to limit Rembrandt's potential damages award because Rembrandt licensed its patent to Zhone Technologies, Inc., which sold unmarked products embodying asserted claim 40, the only claim Samsung alleged the unmarked products embodied. Rembrandt should have, but did not, require Zhone to mark its products. Nevertheless, the district court denied Samsung's JMOL motion because Rembrandt withdrew claim 40 from its infringement allegations and filed a statutory disclaimer disclaiming claim 40 pursuant to 35 U.S.C. § 253(a) and 37 C.F.R. § 1.321(a). The district court, citing Genetics Inst., LLC v. Novartis Vaccines & Diagnostics, Inc., 655 F.3d 1291 (Fed. Cir. 2011), reasoned that since a disclaimed patent claim is treated as though it had never previously existed, any prior obligation to mark products embodying claim 40 ceased to exist upon disclaimer.

The Federal Circuit noted that 35 U.S.C. § 287(a) is permissive, not mandatory, because it provides that patentees and their licensees "may give notice to the public that [any patented article] is patented" (emphasis added) by appropriately marking the article. The court further noted, however, that although the statute does not require marking, it further provides, "In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice." The Federal Circuit explained that the statute "protects the public's ability to exploit an unmarked product's features without liability for damages until a patentee provides either constructive notice through marking or actual notice." Slip op. at 20 (citing Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 162 (1989)). According to the Federal Circuit, "Allowing Rembrandt to use disclaimer to avoid the consequence of its failure to mark undermines the marking statute's public notice function." Id. at 21.

The Federal Circuit further reasoned that although a disclaimer relinquishes the rights of the patent holder, it does not retroactively relinquish the rights of the public, including its right to receive notice under the marking statute or avoid pre-notice damages. Consequently, the court vacated Rembrandt's damages award and remanded to the district court.

Before doing so, however, the Federal Circuit addressed, but did not decide, Rembrandt's argument, made to only the district court and not on appeal, that marking requirements should attach to individual claims rather than entire patents. In other words, Rembrandt argued that it should recover pre-notice damages for Samsung's infringement of claims other than disclaimed claim 40. The district court had held that issue moot in view of its ruling on the effect of the disclaimer. Although Rembrandt did not raise the issue on appeal, the Federal Circuit held that Rembrandt did not waive it because the district court did not decide it and it was moot until the Federal Circuit vacated the district court's ruling on disclaimer. Id at 22-23 (citing WesternGeco L.L.C. v. ION Geophysical Corp., 837 F.3d 1358, 1364 n.3 (Fed. Cir. 2016)). Acknowledging that whether the marking statute applies on a claim-by-claim or a patent-by-patent basis is an issue of first impression, the court remanded the issue to the district court to address in the first instance because the parties did not raise the issue on appeal.

This ruling serves as a reminder to patent owners of the importance of the patent marking requirements, and of requiring licensees to mark products embodying licensed patents. It remains to be seen whether Rembrandt will prevail on its claim-by-claim marking argument, which has some logic. As noted above, the Federal Circuit explained that the marking statute protects the public's right to exploit an unmarked product's features without liability until receipt of actual notice. Suppose a patent has claims to mutually exclusive embodiments and the patent owner or its licensee marks one embodiment and not the other. Why should the public have a right to exploit the features of the marked product rather than only the unmarked product? On the other hand, the statute provides that patentees and licensees selling "any patented article" may give notice by marking, and if they fail to do so, "no damages shall be recovered" until actual notice, without express limitation to products with the features of the unmarked products. With millions of dollars at stake, the parties are likely to fully explore the issue, which may well return to the Federal Circuit.

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
Similar Articles
Relevancy Powered by MondaqAI
McDermott Will & Emery
Lewis Roca Rothgerber Christie LLP
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
McDermott Will & Emery
Lewis Roca Rothgerber Christie LLP
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions