As noted in a previous post, it is a common practice for companies to mark a patented product with the applicable patent number. Patent marking provides several benefits, of which the most notable is the ability for the patent holder to collect damages for past infringement.
However, the Patent Act also imposes penalties on those who mark products with false or expired patent numbers. These penalties have spawned a wave of false marking lawsuits by individuals who hope to collect from companies who mark products with incorrect patent numbers or numbers of expired patents.
This week, the Federal Circuit issued an opinion that gives some comfort to patent holders who involve counsel in their marking decisions. In Pequignot v Solo Cup Company (No. 2009-1547, Fed. Cir. June 9, 2010), the Court reminded potential plaintiffs that the false marking statute requires that the marker apply the false patent number “for the purpose of deceiving the public”. 35 U.S.C. 292(a). In the case, the Court stated:
the combination of a false statement and knowledge that the statement was false creates a rebuttable presumption of intent to deceive the public . . . Although the presumption cannot be rebutted by ‘the mere assertion by a party that it did not intend to deceive’ . . . The bar for proving deceptive intent here is particularly high, given that the false marking statute is a criminal one.
In the case, the defendant’s products were marked with expired patent numbers. However, before the patents expired, Solo Cup consulted with its patent counsel. Because the products were produced and labeled with molds with molds that would be expensive to replace, the counsel advised Solo Cup that it would not need to engage in wholesale replacement of the molds immediately upon patent expiration. Instead, the attorneys advised Solo Cup that it could simply replace the molds (with proper patent markings) as they wore out or became damaged in the ordinary course of business. The Federal Circuit found this fact to be “credible evidence that [Solo Cup’s] purpose was not to deceive the public.”
The Court’s decision suggests that patentees can help reduce their exposure to false marking liability by consulting with counsel prior to making decisions about when (and when not) to apply markings to their products.