Marking Products as Patented: Many manufacturers mark their products as patented by listing the associated patent number on the product or its packaging. The marking serves as constructive notice to potential infringers -- allowing a patentee to collect damages for infringement even if the infringer had no actual knowledge of the patent. There have also been a few cases where marking was important to support a plaintiff's willful infringement allegations. From a non-rights-based perspective, marking a product as patented may create additional consumer goodwill by suggesting that the marked product is innovative and that the design is the valuable property of the manufacturer. The markings may also tend to deter would-be competitors.
Marking is not without risk. The Patent Act provides a cause of action against those who "falsely claim that their products are patented." The false-marking cause of action is termed a qui tam action because the action may be taken by any private individual on behalf of the government. A successful false-marking claimant must prove two elements: first, that an unpatented article has been marked as patented; and second that the marking was done with intent to deceive the public. Clontech Labs. Inc. v. Invitrogen Corp., 406 F.3d 1347, 1352 (Fed. Cir. 2005).
Rather than calling for damages or compensation, the false-marking statute calls for a fine of "not more than $500 for every … offense." 35 U.S.C. 292. In the recent case of Forest Group v. Bon Tool, the Federal Circuit held that the "offense" relates to each article that has been falsely-marked. Thus, the fine against a manufacturer that sells a batch of 1,000 tubes of lip-gloss would have an upper limit of $500,000.
Patent Reform: In her recent article, Professor Winston (Catholic U) has argued that the rules of false-marking should be shifted to place more of a burden onto the patentee to avoid false marking. Winston would ease the proof necessary for to prove "intent to deceive the public." Some manufacturers are requesting patent reform that goes the other way. I have heard of three potential changes being suggested: (1) clarifying that the listing of expired patents is not actionable; (2) limiting the standing to only particular individuals who have been harmed (such as competitors) or otherwise eliminating qui tam enforcement; and (3) overruling the Forest Group decision as a way to limit damages.
The Harm of False-Marking: I am working on a project to understand how the false-marking fine should be calculated. Notably, the fine could be based on any of (1) compensation for the harm caused to the public by the false-marking; (2) disgorgement of the false-marker's profits due to the false-marking; or (3) punitive damages based on the culpability.
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