Marking a product with a patent number benefits patent holders by allowing damages to accrue from the moment of infringement, rather than requiring actual notice. However, incorrectly marking a product—whether with “patent pending” or an incorrect patent number—can lead to liability for false patent marking. Recent case law has underscored the risks associated with false marking and the substantial penalties involved.
Related article: AIA: Virtual Patent Marking and False Marking Changes
Potential Penalties Under the False Marking Statute
The false marking statute (35 USC 292) imposes liability of up to $500 per falsely marked product. For instance, marking 1,000 units incorrectly could expose a company to a maximum liability of $500,000. This upper limit was clarified in Bon Tool Co., where the court noted that this figure is a maximum, not a required minimum, allowing the court discretion. Nevertheless, businesses should carefully consider the potential financial exposure when establishing a patent marking policy.
Intent Requirement for False Marking: Pequignot v. Solo Cup Co.
In Pequignot v. Solo Cup Co. (Fed. Cir. 2010), the court focused on the intent necessary for false marking liability. Liability arises only if the false marking was done with intent to deceive. In this case, Solo Cup had embedded patent numbers into its cup lid molds, which remained even after the patent expired. The court established that knowingly marking a product with an expired patent number creates a rebuttable presumption of intent to deceive.
Solo Cup rebutted this presumption by demonstrating reliance on legal advice. Upon discovering the expired patent number on its cup lids, Solo Cup consulted legal counsel and chose to phase out the expired marking gradually as molds were replaced through normal wear. The court found that Solo Cup’s actions were based on a reasonable business decision to minimize costs and disruption, rather than an intent to deceive, thus exempting Solo Cup from liability.
Takeaway: Seek Legal Advice on Patent Marking
This case highlights the importance of consulting with patent counsel on marking practices. Proper guidance can help ensure compliance and reduce the risk of costly false marking claims. For assistance with your patent marking strategy, contact me at (949) 433-0900. As an Irvine patent lawyer, I serve clients in Orange County, Irvine, Los Angeles, San Diego, and surrounding areas. Please share this article with those who may find it helpful.