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False Patent Marking: What Manufacturers Need to Know about Marking Patented Products
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Does your manufacturing business have a patent marking review process? Patent marking, while seemingly simple, can create complex and potentially costly legal issues for manufacturers. To protect their rights, manufacturers owning patents should "mark" their patented products and related marketing literature to notify buyers their products are patented. Marking improves a manufacturer's chances of recovering damages for patent infringement and is a preferred practice to follow. A proper marking typically includes the issued patent number or "patent pending." However, under federal law, unpatented products (and any advertising for unpatented products) cannot give the indication that the product is protected by an issued patent. If a manufacturer incorrectly marks its products, it can be subject to a fine of up to $500 per product. In the case of a manufacturer that mass produces large numbers of products, such as the Solo Cup Company which had manufactured billions of incorrectly marked cups, the potential liability can be substantial. Even if there is not a large number of improperly marked products, a manufacturer may still have to pay to defend itself against a claim of false patent marking.

These claims do not need to be brought by the government. Federal law provides incentive for any member of the public to file a false patent marking lawsuit by allowing that person to keep half of any fines leveled by a court against the manufacturer found to be falsely marking its products. These types of lawsuits are sometimes referred to as "qui tam" or "whistle blower" lawsuits.

The Cost of False Patent Marking

Historically, financial damages for false patent marking were not based on each product. However, this changed in 2009 when the U.S. Court of Appeals for the Federal Circuit affirmed, in Forrest Group, Inc. v. Bon Tool Company, that damages were to be assessed on a per product basis. As a result, Forrest Group had to pay $180 in damages for each product falsely marked and sold. The court arrived at the amount of $180 because it was the highest price for which Forrest Group sold the products. Not unexpectedly, there has been an increase in the number of qui tam actions filed in federal courts alleging false patent marking following this December 2009 decision.

Proving a False Patent Marking Claim

In order to win a false patent marking lawsuit, it must be shown that an unpatented product was falsely "marked" as being patented when in fact it is not covered by the patent identified in the marking, and that the patent holder intended to deceive the public. One way to show this first element is to demonstrate that the product does not "infringe" the patent placed on the product (in other words, the patent listed does not cover the product). Another way is to demonstrate that the patent placed on the product (or the patent advertised as covering the product) has expired.

Once it has been shown that products are falsely marked, the manufacturer must prove that its intent was not to deceive the public. Although earlier cases, such as Forrest Group, made it somewhat difficult for the patent holder to show a lack of intent to deceive, more recent cases have made it somewhat easier for the patent holder to show a lack of intent. For example, under current law mere knowledge that the marking is false is insufficient to prove intent to deceive. Nevertheless, a manufacturer can still be brought into court and incur substantial legal expenses to rebut these allegations.

How Can Manufacturers Protect Their Businesses?

Manufacturers of patented and patent-pending products should develop a comprehensive periodic review process to ensure their patent marking program complies with current legislation and that its patent rights are being optimized. A review process will help manufacturers avoid being caught up in this growing area of plaintiff's cases. One aspect of this process should include a review of the manufacturer's patented and patent-pending products to ensure such products are marked only with unexpired patents or pending applications that do, in fact, cover those particular products. The process should also remove all expired patents from product markings and related literature.

  • Partner

    Dan is a senior partner of the Intellectual Property and Technology (IP&T) group (former chair 1997-2009), concentrating his practice on counseling emerging and established businesses in all areas of intellectual property and ...

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