Potential liability for false patent marking significantly increased following a recent court of appeals decision. The court decided a fine of up to $500 may be assessed for each individual article that is marked with an invalid, expired, or incorrect patent number. Several suits have now been filed by plaintiffs alleging false marking and seeking large damages against manufacturing companies.
It is increasingly important for manufacturing companies to review their product labeling to ensure that the listed patents cover the product marked, and that the product labeling is revised when patents expire or are held invalid.
The Federal Circuit’s decision issued December 28, 2009 in The Forest Group, Inc. v. Bon Tool Company (No. 2009-1004 (Fed. Cir. Dec. 28 2009) interprets the false marking provision of the U.S. Patent Act. (35 U.S.C. § 292). The false marking provision serves to discourage a seller from falsely marking an unpatented article. False marking includes marking articles that are not covered by the patents and failure to remove a mark when a patent expires or is held invalid.
The false marking statute by law carries a fine up to $500 for each article sold by the manufacturer. Prior to the court’s recent decision, the definition of “per offense” was open to different interpretations. In Forest Group, however, the Federal Circuit held that each article falsely marked is an individual offense giving rise to a fine of up to $500. Although the Federal Circuit states that the $500 fine is a maximum fine and that a court has discretion in determining the fine, this liability can be substantial for manufacturers.
Any person may bring suit for mismarking an unpatented article. Since the Forset Group decision, a suit against Bayer has been filed alleging mismarking for each bottle of Aleve sold, seeking $500 for each offense. The suit alleges that Bayer continued to mark their Aleve bottles after two patents had expired. Similar suits against Graco and BIC have also been filed. More suits are anticipated in the future, as potential plaintiffs take advantage of the new ruling to seek up to $500 per mismarking.
Liability for false marking requires an intent to deceive. Accidental or unintentional marking may not meet this standard. However, if the manufacturer has any knowledge that a patent may not cover a marked product, is invalid, or expired, liability may follow.
If you have questions or concerns regarding this new development in the law, please contact us at bulchis.ed dorsey.com, or any of our intellectual property group members.
Increased Liability for False Patent Marking Puts Manufacturers at Risk
January 11, 2010