Failure to properly mark a product with its patent number limits an infringer’s liability for damages. Infringers have the burden of production to initially identify products which the patentee failed to mark. The patentee then has the burden of proof to show that the unmarked products are not covered by the patent.
In Arctic Cat Inc. v. Bombardier Recreational Products Inc. (BRP) (Fed. Cir. 2017), the Federal Circuit sorted the respective burdens of the alleged infringer and the patent owner when the alleged infringer tries to limit damages based on the patent marking statute. In particular, “an alleged infringer who challenges the patentee’s compliance with §287 bears an initial burden of production to articulate the products it believes are unmarked ‘patented articles’ subject to 35 USC §287. … Once the alleged infringer meets its burden of production, however, the patentee bears the burden to prove the products identified do not practice the patented invention.”
Patent marking: General Background Information
Before moving the particular facts of the case and the ramifications of the case, here is general background information on patent marking.
Patent marking as codified in §287 provides a means by which a patent owner can constructively give notice to the public of its patent so that infringers are liable for damages regardless of whether the infringer actually knew about the infringement. The patent marking statute serves three related purposes:
- Encouraging patentees to give public notice that the article is patented, and
- Aiding the public to identify whether an article is patented.
To comply with the patent marking statute, the patent owner must place a mark on the patented product with the right patent number or a webpage that leads one to a webpage with the right patent number. If so, the public is given public notice of the patent.
Now, if the patent owner does not mark their patented products with the right patent number or just fails to mark the patented product with the patent number at all, then those unmarked patented products will have the opposite effect of leading the public to believe that the patented product is actually not patented. In this event, §287 places a limit on damages that the patent owner can receive should he or she fail to mark its products. Damages do not start to accrue not until the alleged infringer has received actual notice of infringement of the patent.
Now moving to the facts of this case.
Evidence provided to meet Burden of Production
In this case, the alleged infringer (Bombardier Recreational Products, Inc. (BRP)) provided evidence that the patent owner (Arctic Cat) failed to mark all of the patented products (i.e., Personal Water Craft) with the right patent number. The evidence provided by the alleged infringer to meet its burden of production included:
- a licensing agreement between the patent owner and Honda to practice the patent;
- 14 Honda products which were unmarked;
- Expert testimony that if BRP’s model was infringing on the patent so would Honda’s product.
Thus, the alleged infringer argued that the patent owner should not be awarded damages at the start of the infringement via constructive notice under §287 but only after BRP received actual notice of the infringement of the patent. Because of the evidence presented by the infringer, the burden switched to the patent owner. The patent owner now has to prove that the Honda products were not covered by the patent, and thus the identified products which were not marked did not need to be marked with the patents at issue in this case.
Minimum needed to meet Burden of Production
In making its holding, the Federal Circuit specifically stated that they are not determining the minimum showing needed to meet the initial burden of production by the alleged infringer. They made clear that in the facts of this case, the alleged infringer did meet its burden of production.
Because the Federal Circuit did not provide a standard for how the alleged infringer can meet its initial burden of product, the next issue for the lower courts is to render opinions as to what the standard might be.
Does the alleged infringer need only identify the models which were not marked? Can they merely list all of the patent owner’s models that might be covered by the patent and should have been marked regardless of whether it was marked? These are all questions to be answered in future litigation.
Patent marking versus false patent marking
On the other hand, if a narrow interpretation of the patent claims is taken so as to avoid liability for false patent marking, then some of the patent owner’s products that should be marked, will not be marked and the patent owner would have failed to comply with the patent marking statue.This case also raises issue of false patent marking under §292. On the one hand, if a broad interpretation of the patent claims is taken, then some of the patent owner’s products that should not be marked, will be marked with a patent number. In this scenario, the marking of the unpatented product will constitute false patent marking and comes with its own set of liabilities for the patent owner.
Fortunately, the case law relating to patent marking appears to allow for some of the patented product to be unmarked yet still comply with the patent marking statute as long as patent marking has been “substantially consistent and continuous”. American Medical Systems, Inc. v. Medical Engineering Corporation (Fed. Cir. 193). In Arctic Cat, the products which the alleged infringer asserted were not marked with the proper patent number were the products of the patent owner’s licensee. In that case, the court recognizes that it might be hard for the patent owner to police all of its licensee’s products and thus uses a “rule of reason” as to whether the patent owner made reasonable efforts to ensure compliance with the marking requirements. This is one of the issues to be decided on remand.
On the other hand, the false patent marking statue requires an intent to deceive the public. If you have a good faith belief that the product is covered by the patent, then that fact would mitigate the changes that you would be liable for false patent marking. If you have your patent attorney review the product to be marked and the patent(s), he or she can make a determination as to whether the product is covered by the patent(s).