A patentee’s rights to recovery in an infringement action are substantially enhanced if their patented article is properly marked. The relevant statutory language, found in 35 U.S.C. § 287(a), states: “Patentees . . . may give notice to the public that the same is patented, either by fixing thereon the word ‘patent’ . . . together with the number of the patent, or . . . by fixing . . . to the package . . . a label containing a like notice.” The corollary to that principle is that an unpatented product must not be marked in that fashion. To that end, 35 U.S.C. § 292(a) states: “Whoever marks upon . . . any unpatented article the word ‘patent’ or any word or number importing the same is patented . . . [s]hall be fined not more than $500 for every such offense.” The intent here is to prevent manufacturers from gaining an unfair competitive advantage by falsely claiming their products are protected by patents.
The prohibition on marking unpatented articles presents a potential trap to patentees. As a practical matter, many patentees are prone to forget to remove the marking when their patent expires. Further, a measly $500 fine does not add much incentive to remember. But that situation changed recently. In The Forest Grp. Inc. v. Bon Tool Co., decided December 28, 2009, the Federal Circuit Court held that false marking penalties under 35 U.S.C. § 292 are $500 per article sold rather than $500 per product line as had been followed for many years. As you can imagine, at $500 per article sold, the total penalties for mass produced products can reach the millions of dollars very quickly.
One example of the dramatic effect of the court’s new interpretation regarding false marking penalties was recently reported in the Detroit Free Press. Curiously, plaintiffs in false marking lawsuits do not need to prove damages in order to prevail. That fact, coupled with the potential for huge monetary windfalls as described above, has resulted in a rush to the courthouse.
In response to this situation, a bill was introduced in congress last month. The bill seeks to return to the good old days when the fine for false marking was capped at $500 per product line. The bill has been referred to the House Judiciary Committee. But for now, patentees best be on alert to promptly remove patent markings just as soon at their patent expires.