Forest Group v. Bon Tool (S.D. Tex 2010)
In a 2009 decision, the Federal Circuit remanded the Bon Tool case with instructions to the district court to recalculate the false marking fine owed to the defendant-counter-claimant. In particular, the Federal Circuit held that each falsely marked article represented a separate and distinct act of false marking, each subject to a fine of up to $500.
On remand, Judge Atlas of the Southern District of Texas determined that the false-marking fine should at least recapture all of the revenue generated from the sale Forest’s falsely-marked products. Here, Forest had sold falsely marked stilts “at prices between $103.00 and $180.00.” The court then set the false-marking fine at the highest price-point of $180 per article. Because only 38 pair of falsely marked stilts were sold, the total fine was relatively small — less than $7,000. Half of the fine will be given to the US Government and half collected by Bon Tool.
The Court finds that the appropriate fine in this case is $180.00 per article, the highest point of the price range. This will deprive Forest of more than it received for the falsely-marked stilts, fulfilling the deterrent goal of § 292’s fine provision. Based on the $180.00 per article fine for the 38 falsely-marked stilts of which there was evidence at trial, the Court imposes against Forest a fine of $6,840.00 pursuant to § 292.
Judge Atlas based her decision on the Federal Circuit’s three stated policy goals of: discouraging mis-marking; encouraging enforcement; and avoiding “disproportionately large penalties.” Bon Tool had asked for the maximum $500 per offense. Forest argued that the fine should be limited to its profits on the falsely-marked products of $2,400.