OC Patent Lawyer » patent marking

Liability From Third Party False Marking

James Yang — Thu, 23 Dec 2010 01:23:25 +0000

This blog post has been updated due to the America Invents Act enacted September 16, 2011. See Virtual patent marking and false patent marking post.

Patent false marking has become an increasingly important issue for patentees. The typical false marking situation begins with a product manufacturer falsely marking its “own” product with an expired patent number, unrelated patent number, or with “patent pending” when no U.S. patent is pending. The following case shows that a manufacturer may also be sued for incorporating a “third party’s” part falsely marked with a patent number.

Brooks Brothers sells bow ties. Brooks incorporated a mechanism “Adjustolox” manufactured by a third party – J.M.C. Bow Company into its bow ties. The Adjustolox was marked with patent numbers that expired in 1954 and 1955. The maximum potential liability for false patent marking is up to $500 per product sold. For example, the maximum potential liability for selling 1000 bow ties could be as high as $500,000. Accordingly, the maximum potential liability for false patent marking is significant and should be addressed when incorporating a third party’s part marked with a patent.

Stauffer purchased some of Brooks’ bow ties and sued Brooks under the false patent marking statute. Brooks asserted that Stauffer did not have standing to bring the lawsuit since Stauffer was not personally harmed by the false patent marking. The Court held that the false patent marking statute operates to confer standing upon Stauffer. The interesting aspect of this case is that Brooks Brothers is being sued because J.M.C. Bow Company marked the component part (i.e., Adjustolox) with the expired patent. This case illustrates the point that a manufacturer that incorporates a component part marked with a patent number should investigate whether the patent number is properly marked and address the issue with the component part manufacturer early during the process.

I invite you to contact me with your patent questions at (949) 433-0900 or James@OCPatentLawyer.com. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.

Penalty for False Patent Marking

James Yang — Fri, 29 Jan 2010 22:06:03 +0000

This blog post has been updated due to the America Invents Act enacted September 16, 2011. See Virtual patent marking and false patent marking post.

Upon filing a patent application or issuance of a patent, a product disclosed by the patent application or covered by the claims of the issued patent may be marked either “Patent Pending” or “Patented” together with the patent number. The benefit of marking a product as patent pending is that it provides a warning that exact copying may be tantamount to infringement upon issuance of the patent. Also, marking the product with the patent number allows the patent owner to seek compensation for infringement prior to actual notice of the patent at issue.

However, patent owners must be careful to ensure that the product marked as patented is indeed patented or patent applied for. Under current U.S. Patent law, anyone can file a lawsuit against a manufacturer that has falsely marked their product as patented with an intent to deceive the public. For example, if a patent application has become abandoned but the product still includes the “Patent Pending” mark, then others may have a claim against the product manufacturer for false marking. Under 35 USC Section 292, the public can sue the product manufacturer on behalf of the government for the sum of not more than $500 per each offense. This is referred to as a qui tam action. The government is seeking the help of the public to control false marking. The $500 maximum penalty may not appear to be much. However, it depends on how “each offense” is calculated.

The following case explains the meaning of “each offense.” Prior court decisions have reduced the severity of this penalty by counting each offense based on time (e.g., one week, one month, etc.). However, in The Forest Group Inc. v. Bon Tool Co. (Fed. Cir. Dec. 28, 2009), the Court held that the phrase “each offense” means each article or product. For example, if you sold 1,000 widget and falsely marked each widget, then the maximum potential liability is $500,000. This may seem unfair in light of the wide range of products that could be mismarked. For example, imposing a fine of $500 for each baseball cap may be unfair. The Court addressed this concern by pointing out that the $500 penalty is a maximum fine and not a minimum fine. Judges can adjust the fine amount to match the type of product so as to be fair.

Based on the foregoing discussion, it is important to consult with legal counsel to determine whether your product is patent pending or covered by your patent. Alternatively, you may want to consider removing any indicia indicating patent status on your product. Otherwise, you may find yourself defending a claim of false marking. Also, during enforcement of your patent, you may find yourself having to defend yourself against a counterclaim of false marking.

You may also be interested in Patent Marking.

For more information, please feel free to contact me.

Patent marking

James Yang — Mon, 11 Sep 2006 04:34:00 +0000

Under US Patent Marking Statute, patentees may give constructive notice to the public by indicating on the product the word “patent” or “pat.” together with the number of the patent. If the patent number cannot be marked on the product itself, then such marking may be provided on the insert or label associated with the product. By doing so, damages can be calculated from the start of infringement, instead of from actual notice (e.g., receipt of a cease and desist letter or service of a complaint).

In Soverain Software LLC v. Amazon.com Inc., 79 USPQ2d 1208 (E.D. Tex. 2005), the patents at issue were directed to (1) methods for controlling and monitoring access to network servers through the use of a session identifier, and (2) a network-based sales system including a shopping cart. The patents all contained an apparatus claim and a method claim. During litigation, Amazon submitted a motion to the court that damages should be calculated from the date the lawsuit was filed. Amazon contends that that Soverain failed to comply with the patent marking statute since the patent marking was inserted in the software code and the accompanying document. The Court denied Amazon’s motion since this is a question of fact and cannot be decided on summary judgment.

Amazon also moved the court to hold that Soverain’s licensees failed to comply with the marking statute. In response, Soverain contended that they could not comply with the marking statute because the patents were directed to a method. Under Am. Med. Sys., Inc. v. Med. Eng’g Corp., 6F.3d 1523, 1538 (Fed. Cir. 1993), the Court held that a tangible item that can be marked is required to be marked to comply with the marking statute. Soverain contended that the websites employing the patented method is not a tangible item, and thus, need not comply with the marking statute for Soverain to be awarded damges prior to actual notice. The Court disagreed and held that an item’s status of tangible or intangible is not divorced from its ability to be marked, but rather the Court defined “tangible items” as those items that can be marked and “intangible items” as those that cannot be marked. Amazon brought forth examples of various websites that have included patent numbers to show that websites can be marked. Hence, the Court granted Amazon’s motion that Soverain’s licensees failed to comply with the marking statute. Soverain Software LLC v. Amazon.com Inc., .

Updated November 11, 2011, America Invents Act enables virtual patent marking.