ARTICLE
24 January 2010

Damage Assessments For False Patent Marking To Be Applied On A Per-Article Basis

DM
Duane Morris LLP

Contributor

Duane Morris LLP, a law firm with more than 800 attorneys in offices across the United States and internationally, is asked by a broad array of clients to provide innovative solutions to today's legal and business challenges.
On December 28, 2009, in "Forest Group v. Bon Tool Company", the U.S. Court of Appeals for the Federal Circuit rejected long-standing precedent to hold that the plain language of the false marking statute (35 U.S.C. § 292) requires the civil penalty to be imposed on a per-article basis—meaning that a false marking claimant may now recover up to $500 "per falsely marked article".
United States Intellectual Property

On December 28, 2009, in Forest Group v. Bon Tool Company,1 the U.S. Court of Appeals for the Federal Circuit rejected long-standing precedent to hold that the plain language of the false marking statute (35 U.S.C. § 292) requires the civil penalty to be imposed on a per-article basis—meaning that a false marking claimant may now recover up to $500 per falsely marked article.

The false marking statute provides, in pertinent part:

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 that the same is patented, for the purpose of deceiving the public . . . shall be fined not more than $500 for each such offense.

The false marking statute also 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 use of the United States." To succeed on a false marking claim, the claimant must prove (1) that an unpatented article was marked as patented and (2) that the marking was for the purpose of deceiving the public. A party asserting false marking must show by a preponderance of the evidence that the accused party did not have a reasonable belief that the articles were properly marked.

In the past, courts have limited the damage award for false marking by either interpreting the statute to impose "a single fine for continuous false marking" or by adopting a "time-based approach" to the statute and imposing a fine for each day, week or month the falsely made articles were falsely marked. The Federal Circuit rejected both of these interpretations in Forest Group v. Bon Tool Company. Although the District Court for the Southern District of Texas found that Forest Group's decision to mark the unpatented articles constituted a single offense and awarded only $500 in damages under the false marking statute, the Federal Circuit held that the plain language of the statute did not support such a construction—and instead required that each falsely marked article serve as a separate offense. In remanding the case for recalculating damages due to false marking, the Federal Circuit reminded the lower court that the statute permits a range of penalties, but "not more than $500 for every such offense," and provides "discretion to strike a balance between encouraging enforcement of an important public policy and imposing disproportionately large penalties for small, inexpensive items produced in large quantities."

For more information about false patent marking, please contact Brian McQuillen, any lawyer in the Intellectual Property Practice Group or the lawyer in the firm with whom you are regularly in contact.

Footnote

1. Forest Group, Inc. v. Bon Tool Co., No. 2009-1044 (Dec. 28, 2009).

This article is for general information and does not include full legal analysis of the matters presented. It should not be construed or relied upon as legal advice or legal opinion on any specific facts or circumstances. The description of the results of any specific case or transaction contained herein does not mean or suggest that similar results can or could be obtained in any other matter. Each legal matter should be considered to be unique and subject to varying results. The invitation to contact the authors or attorneys in our firm is not a solicitation to provide professional services and should not be construed as a statement as to any availability to perform legal services in any jurisdiction in which such attorney is not permitted to practice.

Duane Morris LLP, a full-service law firm with more than 700 attorneys in 24 offices in the United States and internationally, offers innovative solutions to the legal and business challenges presented by today's evolving global markets.

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