Defendants Continue Winning Battles on What Constitutes "False Marking"

Last week two district courts added clarity on what constitutes false patent marking in violation of 35 U.S.C. § 292.

It is Permissible to Mark Method Patents on Products:

The U.S. District Court for the Northern District of California dismissed a recent claim, ruling that producers could mark method patents on products without necessarily violating the statute. San Francisco Technology Inc. v. Elkay Plastics Company, Inc., 3-11-cv-00291 (CAND April 15, 2011, Order) (Alsup, J.).

Instruction Manuals and Website Markings NOT Covered by Statute:

The U.S. District Court for the Eastern District of Pennsylvania granted summary judgment to the defendant, Timex, ruling that their patent markings in instruction manuals were not covered by the statute because they were not themselves “unpatented articles” nor were they “affixed to unpatented articles”. Hollander v. Timex Group USA, Inc., 2-10-cv-00429, pp. 7-8 (PAED April 13, 2011, Order) (Schiller, J.). The court further ruled that their manuals and the “Terms of Use” sections of their website were not “use[s] in advertising” as contemplated by the statute. Id. at pp. 8-11. Finally the court ruled that Hollander, the qui tam relator, had “failed to introduce evidence that Timex acted with the requisite intent to trigger liability under § 292.” Id. at pp. 11-19.

Permalink: http://falsepatentmarking.blogspot.com/2011/04/defendants-continue-winning-battles-on.html

Pace of False Marking Suit Filings in Rapid Decline?

The following article suggest the rapid pace of filings of false marking suits is slowing in the wake of the Federal Circuit's decision in In Re BP Lubricants, Misc. Docket No. 960 (Fed. Cir. Mar. 15, 2011)(2011 WL 873147) to apply Rule 9(b) to these pleadings:

http://westlawnews.thomson.com/National_Litigation/News/2011/03_-_March/False-marking_suits_slow_after_Federal_Circuit_ruling/ ("Since March 16, the day after the ruling, only one new false-marking suit has been filed, according to an analysis of court filings on Westlaw, down from several cases a day before the ruling.")

Permalink: http://falsepatentmarking.blogspot.com/2011/03/pace-of-false-marking-suit-filings-in.html

Federal Circuit Requires Patent False Marking Be Pled With Particularity: In Re BP Lubricants

The Federal Circuit today issued its long awaited decision in In Re BP Lubricants, Misc. Docket No. 960 (Fed. Cir. Mar. 15, 2011)(2011 WL 873147). As expected, the court agreed with mandamus petitioner BP Lubricants and amicus curiae, the United States Department of Justice, that a heightened pleading standard under Rule 9(b) applies to False Marking claims under 35 U.S.C. §292. In an introductory summary the court explained that "a complaint alleging false marking is insufficient when it only asserts conclusory allegations that a defendant is a 'sophisticated company' and 'knew or should have known' that the patent expired. " In Re BP Lubricants, Misc. Docket No. 960, at 2.

The decision should have a major impact on a significant number of false marking suits. For example, the Eastern District of Texas had refused to apply Rule 9(b) when considering motions to dismiss the hundreds of false marking cases now pending in that venue.

Stay tune for more as 2011 shapes up to be the year of the demise of the patent marking troll.

Permalink: http://falsepatentmarking.blogspot.com/2011/03/federal-circuit-requires-patent-false.html

Judge Reaffirms Ruling That False Patent Marking Statute Is Unconstitutional

On March 14, 2011, Judge Dan Aaron Ploster of the Northern District of Ohio reaffirmed his February 23, 2011 ruling that the false patent marking statute is unconstitutional. The U.S. Department of Justice had asked the court to reconsider its prior ruling and sought to intervene in the in the qui tam case filed by Unique Product Solutions against Hy-Grade Valve.

While the government was allowed to intervene, the court again rejected the government's argument that the "Take Care" provision of Article II of the Constitution does not render the false marking statute unconstitutional. The government urged that the statute is civil in nature and therefore the "Take Care" requirement is inapplicable to the statute. Judge Polster concluded that it makes no difference whether the statute is civil or criminal because the "Take Care" provision is applicable to both criminal and civil statutes. The mere fact that the government can intervene in a qui tam false marking case is insufficent control of the case by the government to satisfy the Article II "Take Care" requirement, he said.

Unique Product Solutions had already appealed the court's February 23 determination that the statute is unconstitutional.

A copy of Judge Polster's March 14, 2011 order may be found here.

Permalink: http://falsepatentmarking.blogspot.com/2011/03/judge-reaffirms-ruling-that-false.html

U.S. Chamber of Commerce Joins in Asking Federal Circuit to Declare False Marking Statute Unconstitutional Under the Take Care Clause

On Tuesday, March 1, 2011, the United States Chamber of Commerce filed a brief as amicus curiea in FLFMC. LLC v. Wham-O, Inc. (Appeal No. 2011-1067) asking the Federal Circuit to declare the False Marking Statute (35 U.S.C. § 292) unconstitutional under the Take Care Clause. The Chamber brief is similar to the amicus brief of the Cato Institute filed in the Wham-O appeal the previous week . A copy of the Chamber's brief is available here: BRIEF OF AMICUS CURIAE CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA IN SUPPORT OF DEFENDANT-APPELLEE AND AFFIRMANCE.

A copy of Wham-O's brief is available here: BRIEF OF DEFENDANT-APPELLEE WHAM-O, INC.

Permalink: http://falsepatentmarking.blogspot.com/2011/03/us-chamber-of-commerce-joins-in-asking.html

Is the False Marking Troll's Demise Imminent? Senate is Poised to Pass Patent Reform Legislation "in the Coming Days"

Shortly after noon today the Senate voted to reject a proposal by Senator Feinstein that would have stripped the first-inventor-to-file provisions from the patent reform bill, now dubbed the "Leahy-Hatch-Grassley America Invents Act."

Among many other changes, the comprehensive reform package will moot the vast majority of currently pending false marking suits because they are brought by plaintiffs who will be ineligible to enforce the new law, i.e., non-competitors (dubbed "trolls" by the Federal Circuit).

The Senate appears likely to pass the measures shortly.

CNBC characterized the status of the bill as follows: "The Senate has rejected a challenge to the key component of legislation to overhaul the patent system, paving the way for passage in the coming days." http://www.cnbc.com/id/41890588 (emphasis added).

Stay tuned!

Permalink: http://falsepatentmarking.blogspot.com/2011/03/is-false-marking-trolls-demise-imminent.html

Momentum Builds to Stem the False Marking Wave: Cato Amicus on Unconstitionality and Legislative Reform

The status of the False Marking Statute (35 U.S.C. § 292) is increasingly uncertain, both constitutionally and legislatively.

Constitutionality Questioned

Two days after Judge Polster of the Northern District of Ohio declared the False Marking Statute unconstitutional, the Cato Institute filed an amicus brief to the Federal Circuit asking that court to find the Statute unconstitutional.

As explained in our last blog, Judge Polster found that the Statute violated the Take Care Clause of the United States Constitution because the Statute provides insufficient government control over enforcement. Unique Product Solutions Ltd. v. Hy-Grade Valve Inc., 10-CV-01912 (ND OH Memorandum Order Feb. 23, 2011). The Cato Institute agrees. In its amicus brief to the Federal Circuit, filed on February 25th, the Cato Institute applied similar reasoning to show the unconstitutionality of the Statute, particularly as compared to well structured qui tam statutes like the False Claims ACt (31 U.S.C. §§ 3729-3733) which impart significant government controls over private relator enforcement. U.S. ex rel. FLFMC, LLC v. Wham-O, Inc., Fed. Cir. No. 2011-1067, Brief for The Cato Institute and Walter Olson as Amici Curiae in Support of Defendant-Appellee and Affirmance (Feb. 25, 2011).

Legislative Reform Moves Forward

Meanwhile, a revision to the False Marking Statute limiting enforcement rights to parties suffering a competitive injury remains on track as part of a package formerly known as the "Patent Reform Act". The reform package (Senate Bill S. 23), recently renamed the "Leahy-Hatch-Grassley America Invents Act", was unanimously approved by the Senate Judiciary Committee on February 3rd. While various alterations to the overhaul legislation have been proposed, the competitive injury fix to the False Marking Statute is unchallenged. A Senate vote on the package could occur within the next few weeks.

Permalink: http://falsepatentmarking.blogspot.com/2011/03/momentum-builds-to-stem-false-marking.html