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False Marking of Expired Patents and Fines

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  • http://www.techdirt.com/articles/20080502/0334191009.shtml
    • It is illegal to make claims of patents or "patents pending". LAwsuits for continuing to list expired patents on products.
    • this is illegal false marking of patent rights.
    • There may be defenses, (for example, the marking process was already in place) for continuing to announce the patent, some claim that it is a problem because the maker is claiming monopoly rights that the holder does not have and may scare off others from making use of a public domain concept.
    • (They forget to mention that it is easy to look up a patent and see what it's status is.) And when they do, they say "I could argue that it's okay to show patents that aren't yours or don't apply to the product because it's easy to look them up and figure out that they're bogus, but nearly everyone agrees that this is an unacceptable practice. Listing expired patents as if they were still active is only slightly less shady."
    • In this age where so many patent holders view patents as important property, it's no surprise that they have trouble letting go once the patent expires and the concept is moved into the public domain.
    • The suing attorney is pursuing a hidden agenda, and is NOT representing me and my interests. Does anyone want to investigate and report on "...Washington DC patent attorney, Matthew Pequignot, filed at least two Section 292 lawsuits in the Eastern District of Virginia alleging false marking. These include Pequignot v. Solo Cup and Pequignot v. Gillette and P&G ..."
    • Once a patent expires, the product is no longer patented. It is as if the product were never patented at all. Continuing to mark a product that is no longer patented is a violation of USC 35, sec. 292 ("False Marking"). False marking products is NOT a service to the public. It unfairly places the burden of proving the patent's validity on the public instead of on the patentee where it belongs. According to sec. 292, ANYONE can file a suit for false marking...you don't need to be an attorney or even an injured party. Companies that misuse and violate the patent laws that are established to protect all of us...are the ones that should be "investigated," not the attorney who files the suit. Marking products as patented or patent pending is a public "No Trespassing" sign...it is not a "Beware of Dog" notice that merely suggests, "be careful." Congress established the False Marking statute to keep inventors and corporations honest. Those who violate this statute are doing so to deceive the American people and to discourage open competition in the marketplace. Anyone who falsely marks their products to deceive the public is guilty and liable for damages...$500 per offense, with one-half going to the person suing and the other half going to the United States. Anyone who deceives us for monetary gain...should be hammered with a substantial fine. Punching them in the wallet is the only way to get their undivided attention.
  • Are you properly marking your patented products
    • marking a product helps to maximize the damages available in an infringement action. Section 287(a) of the Patent Act states that a patent owner who fails to mark its products can only collect damages for infringement if the infringer was notified of the infringement and continued to infringe anyway.
    • Section 292 of the Patent Act states that whoever marks a unpatented product as if it were patented may be subject to a fine. Marking a product with an expired patent number or an incorrect patent number can also create liability under this section.
    • Recent Federal Circuit case has significantly raised the stakes associated with false patent marking. Previous cases have held that the false marking fine of $500 was a maximum fine, regardless of the number of patented articles sold. However, in The Forest Group v. Bon Tool Company, the U.S. Court of Appeals for the Federal Circuit stated that the $500 fine can be applied on a per article basis for each product sold with false marking.
      • Court proudly claimed credit for creating a "new cottage industry of of false marking litigation by plaintiffs who have not suffered any direct harm." Nonetheless, the Court stated that "[t]his, however, is what the clear language allows."
      • http://www.cafc.uscourts.gov/opinions/09-1044.pdf
  • False marking - calculating damages part I - link
  • Increased liability for false patent marking - link
  • Patent pending markings - [link|http://www.greenebaum.com/pubs/xprPubDetail.aspx?xpST=PubDetail&pub=430[

Examples of cases involving false marking of expired patents and fines

Pequignot v. Solo Cup Co.

  • http://www.law.com/jsp/law/sfb/lawArticleSFB.jsp?id=1202421310557 - Matthew A. Pequignot, a partner at Washington-based intellectual property boutique Pequignot + Myers, filed two false patent marking lawsuits as a plaintiff in the Eastern District of Virginia. One of those was against disposable product maker Solo Cup Co. last September, and the other against Gillette and its parent company, The Procter & Gamble Co., in January. Pequignot v. Gillette, No. 1:08-cv-00049 (E.D. Va.); Pequignot v. Solo Cup Co., No. 1:07-cv-00897 (E.D. Va.).
  • Risks of false patent marking link
  • http://machinedesign.com/article/patent-lawsuit-could-cost-billions-1103
    .. back to ambulance chasing

    On November 14th, 2009 joeN says:

    "The Eastern District of Virginia granted summary judgment in favor of Solo Cup Co. that it was not liable for improper patent marking under 35 U.S.C. § 292(a). Pequignot v. Solo Cup Co., No 1:07cv897-LMB/TCB (E.D. Va. July 2, 2009). The Court agreed with Solo that the advice of counsel it received to replace patent-marking molds with non-marking molds in a gradual fashion was reasonable. Solo's overall conduct was held to evidence a lack of intent to deceive the public. The Court also held that an "offense" under the statute is the overall decision to mark improperly, thereby rejecting Pequignot's argument that Solo should be penalized for each and every lid it marked."

    I hope Solo now sues Pequignot to recover all its legal expenses, for "pain and suffering", and damage to its good name.

    For Pequignot, it's back to ambulance chasing. Nice try but no cigars. Break a leg.

  • http://www.grayonclaims.com/storage/MarkingPoliceVers4.pdf - The New Patent Marking Police - Answering Clontech and Forest Group
    • The Court in Forest Products recognizes that a $ 500 fine is out of the question for some products, suggesting discretion to award fines of "a fraction of a penny per article". For 21 billion articles as in the Solo Cup Lid case, this presents a damages range at a tenth of a penny an article of $ 21,000,000.00 up to a maximum of ten trillion dollars

Forest Group Inc. vs. Bon Tool Company

  • http://www.senniger.com/ -
    • Federal circuit court held in Forest Group v. Bon Tool Co. - "the plain language of the statute does not support the district court's penalty of $500 for a decision to mark multiple articles. Instead, the statute's plain language requires the penalty to be imposed on a per article basis." In other words, the statutory fine is properly imposed for each and every article that is falsely marked , even where the articles are mass produced."
    • The court also held that using words such as "may be covered" by a patent is insufficient to avoid a finding of false marking.
  • Lawsuit exposes potential patent danger - http://www.cafezine.com/depts/article.asp?id=23292&deptid=2
    • "This unusual case raises the question of how businesses can protect themselves from patent marking bounty hunters," said Ed Green, registered patent attorney and member of Coats and Bennett. "Given that federal law allows individuals to sue for false marking and reap monetary benefits, it is imperative that companies learn how to avoid false marking liability."
    • How to protect a company against false marking issues, according to Coats and Bennett
      • Pay attention to detail - simply stop using patent market when the patent expires, even if production must be changed
      • Patent ongoing innovation - Patents expire in 20 years from first filing, but new and improved changes can be patented.
      • Build your market and brand recognition - brand identity is trademarkable, and extends after patents expire
      • Use the trademark - strong trademark can help continue dominance, can encourage customer loyalty.
  • link
    • Great article, lots of footnotes, and very in depth explanation of this case
    • Forest Gp., Inc. v. Bon Tool Co. - case about the yoke or clamp on construction stilts.
    • Manufacturer had failed to remove a patent marking after being instructed by Forest, and Bon did not notice this on inspection. This left Forest guilty of falsely marking it's products.
    • The Federal Circuit held that the century old First Circuit precedent in London v. Everett H. Dunbar Corp.,8 which provided that each act of false marking was subject to only one continuous fine, was based upon the 1870 Patent Act, and was rendered completely erroneous by the amendments to the Act in 1952.
    • List of actions for patent holders and litigants

Clontech Laboratories, Inc. v. Invitrogen Corp., 406 F.3d 1347 (Fed. Cir. 2005)

  • Intentional deception required for false marking under patent law - link
    • In Clontech, Invitrogen appealed the District Court's judgment holding that it falsely marked certain of its molecular biology products. At issue were four Invitrogen patents, all entitled " Cloned Genes Encoding Reverse Transcriptase Lacking RNase Activity," and all which had claims generally directed to RNase H deficient Reverse Transcriptase ("RT") polypeptides. Invitrogen's products (RTs, cDNA (complementary DNA) libraries made using the RTs, and kits containing the RTs) sold under these patents were marked with the numbers of all four patents.
    • At trial, the parties disputed whether Invitrogen's products were falsely marked. In particular, the parties contested whether the patents at issue covered many cDNA library products and whether the kits and RT products failed to meet the "substantially no RNase H activity" limitation of the family of patents. RNase is the well-known abbreviation for ribonuclease, an enzyme that catalyzes the breakdown of RNA into smaller components.
  • http://www.grayonclaims.com/storage/MarkingPoliceVers4.pdf - The New Patent Marking Police - Answering Clontech and Forest Group

Stauffer v. Brooks Brothers

  • http://www.grayonclaims.com/storage/MarkingPoliceVers4.pdf - The New Patent Marking Police - Answering Clontech and Forest Group
    • ISSUES:
      • Dismissal of private qui tam litigants case for lack of standing
      • Constitutionality of the qui tam statute
        • At a time when the positions of Under Secretary and Deputy Under Secretary were vacant, the Obama Administration strongly supported the qui tam false marking action. What position should the government take? What should Congress do with respect to qui tam actions within the more macroscopic picture of patent reform legislation?
    • the Middle Ages qui tam practice where civil actions were brought by informants to enforce punitive statutes.
    • renaissance of the newly created ad hoc "patent marking police". Whether styled as "trolls" or "bounty hunters", they seek their pot of gold by identifying patent-marked goods where there either is no patent that covers such goods or where the marked patents have expired
    • The rich Middle Ages tradition of the action is explored, an action "qui tam pro domino rege quam pro se ipso in hac parte sequitur," literally, "who pursues this action on our Lord the King's behalf as well as his own." See § III, The Middle Ages: Qui Tam pro domino rege ....

Arcadia Machine & Tool Inc v. Sturm, Ruger & Co. 786 F.2d 1124, 1125 (Fed. Cir. 1986)_

  • http://www.grayonclaims.com/storage/MarkingPoliceVers4.pdf - The New Patent Marking Police - Answering Clontech and Forest Group
    • it should be noted that it is difficult to understand how a mens rea can attach to marking an expired patent number on manufactured goods. If anything, the argument could be made that publishing an expired patent number on goods presents an invitation to copy the goods as free to the public: It is a simple matter to go to the PTO website and check the patent number and immediately determine whether the patent has expired or not. The patentee loses more than it gains through marking an expired patent number. In Arcadia Machine, the fact that expired patents were marked was excused: "[W]hatever errors appeared in the labels were inadvertent, the result of oversight, or caused by patent expirations." Arcadia Machine & Tool Inc. v. Sturm, Ruger & Co., 786 F.2d 1124, 1125 (Fed. Cir. 1986)(emphasis added).)

London 179 Fed. at 508

  • http://www.grayonclaims.com/storage/MarkingPoliceVers4.pdf - The New Patent Marking Police - Answering Clontech and Forest Group
    • The problem with a per article approach was appreciated a century ago in London which anticipated the nightmare scenario of the Solo Cup Lid case: "Patented articles are so varied in kind and in value that, if we construe the statute to make each distinct article the unit for imposing the penalty, the result may follow that the false marking of small or cheap articles in great quantities will result in the accumulation of an enormous sum of penalties, entirely out of proportion to the value of the articles, while the marking of expensive machines used in limited numbers may result in the infliction of penalties which are comparatively slight in relation to the pecuniary value of the articles." London 179 Fed. at 508.

See also

  • lawsuit over the blatantly false copyright "warnings" put on DVDs and CDs.
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