The Benefits of Patent Marking
Upon filing a patent application or receiving a granted patent, a business may choose to mark its product as “Patent Pending” or “Patented” along with the patent number. Marking a product as Patent Pending warns competitors that duplicating the product could lead to infringement claims if the patent is ultimately granted. Once the patent is issued, marking the product with the patent number enables the patent owner to seek compensation for infringement from the time of constructive notice rather than from the date of actual notice, such as a cease-and-desist letter.
Risks of False Patent Marking
Patent owners must exercise caution to ensure that their products are correctly marked as patent pending or patented only if they truly have a pending application or an issued patent covering the product. Under U.S. Patent Law, a manufacturer can face a false marking claim if a product is falsely marked with an intent to deceive the public. For example, if a patent application has been abandoned but the product still displays “Patent Pending,” a competitor or member of the public may have grounds for a false marking claim.
Legal Implications of False Marking:
Under 35 U.S.C. § 292, the public is empowered to file a lawsuit against manufacturers on behalf of the government in cases of false patent marking. This action, known as a qui tam action, can result in a fine of up to $500 per offense, with the intent of enlisting public assistance to prevent deceptive marking practices. While $500 may not seem substantial, it becomes significant based on how “each offense” is defined.
Defining “Each Offense” Under the Law
The courts have interpreted the term “each offense” in various ways, but recent rulings have clarified this concept. In earlier cases, penalties were sometimes calculated based on time intervals, such as weekly or monthly violations. However, in The Forest Group Inc. v. Bon Tool Co. (Fed. Cir. Dec. 28, 2009), the Federal Circuit ruled that “each offense” refers to each individual product falsely marked. For example, if a manufacturer falsely marks 1,000 products, the maximum penalty could reach $500,000, calculated at $500 per item.
The Court’s Fairness Approach:
Recognizing the potential for excessive penalties, the Court clarified that the $500 per-item fine is a maximum, not a minimum. Judges are therefore permitted to assess fines that are reasonable based on the nature of the product. For instance, a judge may reduce penalties to avoid unduly punitive measures on mass-produced, inexpensive items, such as baseball caps.
Best Practices for Patent Marking
Given these considerations, patent owners should work with legal counsel to ensure products are properly marked as patent pending or patented and to verify that any marking is accurate. If there is any doubt, it may be wise to remove patent markings to avoid the risk of a false marking claim. Otherwise, a patent owner could face a false marking lawsuit or, during patent enforcement, a counterclaim for false marking.
For further information on patent marking or to discuss a specific situation, please reach out at (949) 433-0900. Feel free to share this article with anyone who may benefit. As an Orange County Patent Lawyer, I am available to assist clients across Orange County, Irvine, Los Angeles, San Diego, and surrounding cities.