02/01/2010 10:15:00 AM EST
Forest Group, Inc. v. Bon Tool Co.: Enhanced Penalties for False Patent Marking
The Federal Circuit held in Forest Group, Inc. v. Bon Tool Co., 2009 U.S. App. LEXIS 28380 (Fed. Cir. Dec. 28, 2009) that the penalty for false marking under 35 USCS § 292 is up to $500 for each falsely marked article. This is a change from previous constructions of § 292. This, combined with § 292's provision that allows anyone to sue for false marking and split the penalty with the government, will likely bring scrutiny to companies' marking schemes and potential lawsuits. In this Analysis, Tom Leach and Eric Chad discuss the law on false marking and Forest Group’s impact and offer recommendations for avoiding false-marking penalties. They write:
The Impact of Forest Group
After Forest Group, it is clear that the $500 maximum penalty attaches to each individual product that is falsely marked. Though the Federal Circuit clarifies that this penalty is a ceiling, and the actual per-product penalty could be as low as a fraction of a penny, the penalty must be sufficiently large that potential false-marking plaintiffs will be motivated to bring such cases. The penalty must also be substantial enough to discourage the competition-stifling effects that false marking creates. The Federal Circuit notes that this interpretation of §292 may create a cottage industry of “marking trolls” bringing numerous false-marking lawsuits, but also notes that this is the intention of §292. Even before Forest Group, individuals were brining false-marking claims to recover half the fine required by §292.
. . . .
Avoiding False-Marking Penalties
Given that false marking suits may become more prevalent and the penalty more severe, patent holders should take steps now to ensure that their products are properly marked. This may also avoid a costly lawsuit, a negative claim construction or finding that a product is not covered by a particular patent. We recommend taking the following steps to avoid any issues.
Review of marked products to remove patents that have expired, been found invalid, or declared unenforceable from the patent marking labels.
Ensuring that all listed patents include at least one claim that under a reasonable construction covers the marked product. This step can be performed by technical employees, but obtaining an opinion from patent counsel may be the best option in close cases.