June 2010
If you mark your products with "Patent No. XXXXXXX", or "Patent Pending", you can deter competitors from infringing your patents In the United States, to be able to claim infringement damages, it is essential to notify potential infringers of the existence of a patent. Marking your products with relevant patent numbers may be the most convenient way of meeting this requirement.
The United States Court of Appeals of the Federal Circuit recently issued a judgement which has serious implications for patentees marking their products. The court judgement makes the penalties for false marking potentially very severe.
When a manufacturer marks a product to indicate that it is protected by a patent, when it is not, that is "false marking". In the US, any person can sue a manufacturer for false marking. If the US Court finds false marking with intent to deceive the public, then it can levy a substantial fine. The fine is split equally between the US government and the suing party. The maximum penalty for each “instance” of false marking is $500.
In The Forest Group v Bon Tool Company, the US Court of Appeals found that the “instance”, on which the fine is calculated, is not each occasion of false marking, but is each product that has been falsely marked.
This decision has caused a large increase in the false marking claims in the US, due to the emergence of “patent marking trolls”. These are individuals who search out products that are still marked with patents that have expired.
In a recent high-profile false marking case in the US, a company marked its products with the number of a patent that had expired. The party bringing the action alleged that the company intentionally kept the number on the products after the patent expiry, to mislead the public into believing that the product was still patented. Following the Forest Group v Bon Tool decision, the company could have been fined up to $10,000,000,000, of which the claimant could have claimed half. Happily for the company, they won the case!
Manufacturers who sell in the US must take care when marking their products with patent numbers. In particular, they must promptly remove patent numbers from products which are no longer covered by the patent, for example due to a design modification or when the patent lapses. Manufacturers are allowed to sell marked products that they had in stock when the patent expired.
Please contact us if you require any advice or further information in this regard.