Wednesday, March 2, 2011, 9:03 AM

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

By: Jim Lennon
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.


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