Patently-O Bits and Bytes No. 41 (False Marking, Etc.)

  • PatentLawPic352Tracking Appeals: There is an interesting new patent litigation blog: Patent Appeal Tracker run by Kyle Fleming and Josh Ryland. They are providing a review of various pre-decision appeals.
  • False Marking: Matthew Pequignot is again a plaintiff in a false marking action under 25 USC 292. He has now teamed with two plaintiffs firms and filed suit in the Eastern District of Texas against Gillette and its parent company P&G. The complaint specifies 683 counts of false marking and requests the maximum $500 per “offense.”  The falsity of the marking appears to be generally summarized as either (1) marking products with expired patent numbers and (2) marking products with patents whose scope do not cover the products.  On the second point, some of the counts allege that the defendants marked products with patents covering a method of manufacture when the product was not manufactured according to the patent. [LINK]
  • False Marking Comment: There are three primary reasons to mark products with the associated patent number. (1) Legally, marking provides evidence of constructive knowledge that can increase a patentee’s damages. (2) Apart from the damage issue, the patent can also serve as at least a low-level deterrent to chill would be competitors.  It will at least cost several thousand dollars to hire a patent attorney to figure out if the patents are expired.  (3) Finally, the patent provides additional market credibility to customers (and perhaps investors). Continued listing of an expired patent would continue to benefit the manufacturer in the last two points — and consequently help the manufacturer maintain its market position. The key point of contention will be whether the listings were made “for the purpose of deceiving the public” as required by the statute.
  • Moving Forward on False Marking: If this type of litigation continues to grow, in house counsel should consider creating a system for ensuring that expired and invalid patents are no longer marked on company products. A system — even if a bit leaky — will likely serve as a good defense against false marking charges because they provide evidence of a lack of intent to deceive the public.
  • Patent Law Jobs:

18 thoughts on “Patently-O Bits and Bytes No. 41 (False Marking, Etc.)

  1. Oops…
    Sorry “Highest Billing Rate Ever,” the reference I used was actually posted by “Teacup.”

  2. Just an ordinary inventor:
    You’re right…there are more “false marking” cases currently in litigation. Check out C07-5058RBL in the District Court Western District of Washington (AG Design & Associates v. Trainman Lantern Co.)
    Defendants filed a false marking claim against AG Design after AG Design affixed “patents pending 1999″ labels on several different models of its railroad lanterns beginning in 1999. AG Design had no patents pending until it filed an application in May 2004. In October 2006, AG Design was granted its patent (patent no. 7,118,245B1). It is pretty clear that AG Design exhibited an intent to deceive the public by falsely marking its lantern products 5 years before actually filing its application with the PTO. The CAFC decision in Clontech Laboratories v. Invitrogen Corp. (03-1464, 04-1099) seems to support AG Design’s intent to deceive by ruling, “Intent to deceive is a state of mind arising when a party acts with sufficient knowledge that what it is saying is not so and consequently that the recipient of its saying will be misled into thinking that the statement is true…and with proof that the party making it had knowledge of its falsity is enough to warrant drawing the inference that there was a fraudulent intent.”
    AG Design knew it didn’t apply for its lantern patent until May 2004. It also knew that there were no patents applied for nor pending when it falsely marked 6 different lantern models from 1999 to 2004. This case appears to be a lot more clear cut than Mr. Pequignot’s case against Gillette and P&G.
    AG Design v. Trainman Lantern Co. will be an interesting case to follow regarding the “damages” issue since there is so little case law addressing this.
    Does anyone have any thoughts on what would be considered an equitable award in a case where AG Design’s intent to deceive seems so clear and convincing? Or should AG Design seriously consider settling this case (as Highest Billing Rate Ever suggests (paraphrased): “pay-them-and-they’ll-go-away?”
    As a side note, Washington’s District Court recently dismissed AG Design’s infringement case against Trainman Lantern Co. on summary judgment.

  3. And where’s the Quanta talkback. I guess we have to wait until Dennis or a friend of the blog does a summary analysis

  4. I thought the result of false marking was simply losing any notice rights you may have. I did not realize there was a basis for recovery of damages.

    I also thought it was rule of reason – If 1 of 30 patents listed was expired or incorrect, notice for the other 29 would still be effective, but if 10 out of 20 patents were expired or incorrect then notice would not apply for the 10 accurate ones.

  5. I performed a short review of the case law. It appears that the requirement is to show, by real evidence, that the patent numbers need to be included for the purpose of misleading the public to show liability under this statute. I dont’ think (and hope) this case will not be successful. It must have taken a lot of hours to prepare that complaint – I think that the time could have been better used by Mr. Pequignot.

  6. Why should anyone have to pay an attorney ANY amount to determine that a company does not own the rights of exclusion that it is falsely representing exist (or otherwise undertake any effort themselves to make this determination)? Regardless of whether or not determining patent expiration is easy (I propose that it certainly is not for a lay individual), marking with expired patents certainly imposes burdens on “the public” (inclusive of competitors) which are not its to bear.

    Expired patents aside, it is self-evident from the complaint that the case is not limited to the issue of marking with expired patents. It appears that it is additionally alleged that most of the products listed in the complaint are not covered (in scope) by one or more of the “in force” (non-expired) patents with which they are marked.

  7. Holy cats — that false marking complaint is 218 pages, with 1,729 paragraphs!

    I join with the skeptics on this, at least with respect to expired patents. Any potential competitor can easily and cheaply check the expiration dates of the patents. Consumers hardly care one way or another. Bad faith marking of a patent in force might present a closer case, though.

  8. JAOI-

    if you look at the comments from the PTO surrounding the 17/20 year determination process, they acknowledge that yes, it is possible to have a child application expire before the parent. I do not have it at my fingertips, but i succinctly remember it from one of my previous patent term analysis.

    Just an fyi.

  9. I have another timely TGIF Happy Hour tip.
    In a previous post I wrote to my friend Leo:

    “My toddies are mostly comprised of two parts Early Times bourbon to one part Boissiere sweet vermouth and two dashes of Angostura, the perfect-for-me Manhattan taken at least twice before supper on a plethora of rocks.”

    If you are on a diet, use less vermouth.
    Vodka, gin, rum and various whiskies have about 64 calories per 1 oz. shot.
    Wine has more calories than liquor, especially sweet wine.

    In fact, I intend to lose about five pounds – no vermouth for me, Just Early Times.

    Another tip, if your drink is “Early Times,” you can legitimately start Happy Hour early, such as right now.

    —————————

    It is true that I like to entertain, but I would also genuinely appreciate any possible help on the serious patent questions.

  10. Re: the new blog, it looks like they are calling it “Patent Appeal TRACER” (not Tracker) with a by-line of “Tracking Patent Cases Through the Federal Circuit.”

  11. “If it works, I will salute him.”

    Not me. Seems like a socially near-useless activity. I’m hoping the defendants fight him, and that courts properly hold the “intent to deceive” threshold to be quite high.

  12. Dear Highest billing rate ever,

    Re:
    “My point above, however, was that “typically” expiration analysis is easy.”
    Of course, you are right.

    However, No, I’m not pulling your chain, but I did tell a little white lie about the hypothetical —I know of someone who has exactly the situation as I described.

    He is looking at MPEP 1402 and wondering if that may solve the problem.
    If so, is there going to be a regular patent examination that may take years?

    —————————————-

    One good tip(s) deserves another:

    I found these shortcuts very helpful:
    link to ittraining.lse.ac.uk

    But I didn’t find the non breaking word space listed (a non breaking word space looks like a little degree sign) – its function is to tie two words together so they don’t happen to separate from each other at the end of a line, and instead both words stay together and carry down to the next line.

    Nor did I find this gem: the proper way to abbreviate a patent number, e.g., #7,890,123 is ’123. Many abbreviate it this way ‘123, but that is not correct grammar. Even some Judges do it wrong, but appeal courts like the Federal Circuit and the Supreme Court get it right. If you use a san serif typeface, there may be no difference. However, briefs typically use New Times Roman, and the Supreme Court specifies Century Schoolbook, both traditional serif styles that read better than san serifs unless you are European (no slur intended – Europeans were brought up reading mostly Univers and Helvetica).

    Here is a shortcut to correct patent abbreviation grammar:
    Hold down Control and hit the apostrophe key twice – it works like magic on a PC.

    I’ve been meaning to ask, does anybody out there in Patently-O Land use Apples?

  13. JAOI-

    I agree that your hypothetical requires some analysis, i.e., $$$. My point above, howver, was that “typically” expiration analysis is easy. Unless your hypo (or the like) is popping up all over the place, there is simply not much cost associated with determining expiration, certainly not to the extent to “chill” competitors. Are patentees purposefully selecting patents having convoluted priority claims for marking? I’ve never heard of that strategy.

  14. Apparently, there are more of these suits to be filed. Page 11 of the compliant contains a “cut-and-paste” anomaly which references an expired patent of Isuzu (USP 6,192,856). Mr. Pequignot certainly has more than a condo in mind for his proceeds (I’m not hating – just envious).

  15. Dear Highest billing rate ever,

    Hypothetical Question:
    A jumbo patent ’111 with multiple inventions was filed in 1986.

    The chain was kept alive and another patent ’222 was filed in 1994.
    ’222 was said to be a C-I-P of ’111, and ’222 said it incorporated ’111 by reference.

    However, ’111 & ’222 have not one Figure or one sentence in common.

    ’222 was filed in 1994. A straight Continuation ’333 patent of ’222 was filed in 1996.

    When does ’333 expire?

    If the answer is based on the ’111’s date of 1986, that would, of course, be unacceptable and illogical and an unintended consequence of the 17-year / 20-year term switchover. For example, how can a Continuation sibling expire before its parent?

    How would you recommend rectifying the situation for the inventor?

    Disclaimer: Please consider my questions purely from an academic standpoint, a Socratic philosophic inquiry, and in now way legal advice.

  16. The fact that 683*$500 = $341,500 leads me to believe that Mr. Pequignot is banking on the pay-me-and-I’ll-go-away factor.

    If it works, I will salute him. And I won’t even complain if P&G jacks up the price of their razors by 0.1 cents to cover the unexpected cost of Mr. Pequignot’s new condo. God bless America.

  17. Dennis, I don’t think it would typically cost thousands of dollars to determine if the patent expired. Most laypersons could figure it out on their own. Even if you did hire an attorney to investigate a close case (maybe something falling in the 17-year / 20-year term switchover or with a complex PTA), an opinion limited to expiration analysis of a single patent should rarely run over $1000. Is there something I am missing there that should require more than 3 hours of attorney time?

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