The Marking Statute of § 287(a) Requires Internet Vendors of Downloadable Patented Software To Mark Their Websites

IMX, Inc. v. LendingTree, LLC, 2005 U.S. Dist. LEXIS 33179 (D. Del. Dec. 14, 2005); motion for reconsideration denied, 2006 U.S. Dist. LEXIS 551 (D. Del. Jan. 10, 2006).

by Eric Lane,

IMX v. LendingTree appears to be the first court decision to hold that compliance with the constructive notice provision of 35 U.S.C. § 287(a) requires a patentee to mark an internet website that facilitates downloads of patented software.

IMX asserted its patent covering a method and system for trading loans against LendingTree. Users download IMX’s web-based software from IMX’s website. LendingTree moved for partial summary judgment to limit damages to those occurring on or after the filing date of the lawsuit because IMX failed to provide constructive notice of the patent. The issue was whether IMX had to mark its website to provide constructive notice.

Although the components of the invention (database and transaction server) can not by viewed by the end user and the website does not embody any claim of the patent, the court found that IMX had a duty to mark its website because the public accesses the commercial embodiment of the patented invention through the IMX website:

Although IMX does not make or sell the computer components through which its patented system is processed, and although the IMX website itself is not the patented invention, nevertheless, consistent with the purpose of § 287(a) as interpreted by the Federal Circuit, the website is intrinsic to the patented system and constitutes a "tangible item to mark by which notice of the asserted method claims can be given" . . . The point of public access to the patented invention of the ‘947 patent since March 2000 has been through IMX's website; therefore, marking the patent on the website is required.

The IMX case is still pending, but if the marking decision is appealed, would it hold up under Federal Circuit scrutiny? The IMX court found that IMX’s website was a "tangible item" under the Federal Circuit’s American Medical Systems decision, but in American Medical Systems, the "tangible item" at issue was an article produced by the method of the patent-in-suit:

In this case, both apparatus and method claims of the ‘765 patent were asserted and there was a physical device produced by the claimed method that was capable of being marked. Therefore, we conclude that AMS was required to mark its product pursuant to section 287(a) in order to recover damages under its method claims prior to actual or constructive notice being given to MEC.

Yet the IMX court explicitly acknowledged that the IMX website is not the patented invention, so the decision is not consistent with AMS.

On the other hand, the IMX decision could be read as finding the website through which the patented product is accessed to be the legal equivalent of product packaging, which would require marking under § 287(a), or that the website is akin to a product insert. There is some case law that supports the proposition that marking patent notice on materials that are included with each individual patented article, though not on the packaging itself, would satisfy the marking requirement under § 287(a). See Calmar, Inc. v. Emson Research, Inc., 850 F. Supp. 861 (C.D. Cal. 1994) (§ 287(a) requires either marking the patented article itself "or, at least, including something with the packages in which the patented articles are shipped which would indicate the article’s patent number"); Stryker Corp. v. Intermedics Orthopedics, Inc., 891 F. Supp. 751 (E.D.N.Y. 1995) (patentee did not comply with section 287(a) because it failed to mark the product packaging "[n]or was there any evidence offered at the trial by the plaintiff that . . . other literature containing the patent marking was placed in the packaging of the [patented surgical implant] that was distributed to vendors and end-users”).

Note: This post is the first in a series of posts by a team of attorneys at Morgan & Finnegan's New York office.  The team is led by former Markey clerk, Mark Abate.

Comments

[Joe Smith]

Do any of the defenders of the current patent system understand what a stinging indictment of the current system it is that there is this much variation from court to court?

[JimR]

IMX placed notices regarding it's 5,995,947 patent on (i) the "IMX® Patents" page and (ii) the "Patent Press Release" page, but did not place notices regarding it's 5,995,947 patent on (iii) the IMX "Corporate Home" page (http://corp.imx.com/corporate_ home.asp) and (iv) the IMX "Product Information" page (http:// corp.imx.com/corp/product_info.asp). The court said that the notices on pages (i) and (ii) does not provide a clear nexus between the '947 patent and the patented product and, as a result, plaintiff has failed to give the public adequate notice that its "IMX Exchange" system is protected by the '947 patent. Sounds like tomato and tamato, potato and patato to me.