False Patent Marking: Are You The Next Defendant?

If your company sells patented products, now is a good time to review your patent notices for accuracy and establish procedures to avoid becoming the next defendant. If you do uncover issues, it is likewise a good time to confer with outside counsel to ensure that you can effectively defend against any case that might be brought by any disgruntled employee, patent troll, or any person. In this Analysis, Paul McQuade and Manuel Cordovez discuss false patent marking and provide a checklist to avoid false marking. They write:

Why Mark a Product in the First Place?

     Given the scale of potential liabilities in view of the Forest Group [v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009)] decision, one might instinctually want to remove any patent markings from one's products as a protective measure. However, in order to recover damages for infringement, the Patent Act also requires that products carry the appropriate patent number(s) as constructive notice to others that the item is patented. If one were to sell products without indicia of patent coverage, damages for infringement could only be recovered prospectively from the time a suit is filed, or actual notice is provided to the infringer. The difference between being able to sue for years of damages for past infringement, versus only prospective damages, can be substantial. Moreover, if one has invested in research and expended the time and resources to patent a new invention, removing the patent notice, and thus the prospect of damages, diminishes the value of one's IP assets.

     For these reasons, it is important that articles of manufacture continue to carry some indicia of being patented. To qualify as constructive notice entitling one to infringement damages, patent marking of a product must be "substantially consistent and continuous." This is a question of fact, which will be resolved upon the particular circumstances of each case. In Maxwell v. J. Baker Inc. 86 F.3d 1098 (Fed. Cir. 1996), the court held that marking 95 percent of all products constituted constructive notice because "substantially all" of the products were routinely and continuously marked and the patent holder attempted to comply with the statutory marking requirements. In other cases, a lower percentage of marked products failed to qualify as constructive notice and the right to recover infringement damages prior to actual notice was lost.

     . . . .

Checklist to Avoid False Marking:

     Based on recent developments, therefore, the following steps should be considered:

1. Review current labeling regimes - Are markings accurate?

2. Review each patent listed -- Does each have at least one claim that reads on this product?

3. Use "patent pending" only when an application is on file.

(footnotes and citations omitted)

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