Proof that the Infringer was Notified of the Infringement

by Dennis Crouch

Arctic Cat Inc. v. Bombardier Recreational Prods. Inc. (Fed. Cir. 2020)

This case involves the notice requirement for collecting back-damages in patent cases.  35 U.S.C. 287(a) creates a system for limiting back-damages in instances  where a patentee fails to mark its patented articles as patented.

In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.

Id.  The marking requirement only applies to patentees practicing the invention via a “patented article.”  Non-practicing entities have nothing to mark, nor do patentees practicing their unmarkable patented process. In those situations, back damages are available — although still limited to six-years pre-complaint under 35 U.S.C. 286.

In this case, Arctic Cat had stopped manufacturing its patented thrust steering systems by the time the patent had issued — so no marking possible there.  However, Arctic Cat had licensed several of its patents to Honda, including the patents at issue here.  A couple of details regarding the license are important here: (1) The license was agreed-to prior to the issuance of the patents at issue and so did not expressly name them by patent number. However, the license expressly includes later-patents covering Thrust Steering. (2) The license expressly states that Honda has no marking requirements.

Honda made & sold products under the license and did not mark the products with Arctic Cat’s patent numbers.  Although disputed, Honda arguably stopped making covered-products in 2013.  Arctic Cat then sued Bombardier in 2014.   The question then on appeal is how-far back can Arctic Cat collect damages:

  1. Damages only go back to the date of the complaint filing since licensed products had been sold and not marked;
  2. Damages go back to 2013 — when it was no longer possible to mark the products; or
  3. Damages go back the full six years based upon a jury’s holding that the infringement was willful, which implies actual notice of the patent.

Holding: The answer by the court is #1 – Arctic Cat won’t get any pre-filing damages.

#2 (Damages after Cessation) is incorrect because “cessation of sales of unmarked products” alone does not excuse or cure “noncompliance with the notice requirement of § 287.” Rather, “to begin recovering damages after sales of unmarked products have begun, § 287 requires that a patentee either begin marking its products or provide actual notice to an alleged infringer; cessation of sales of unmarked products is not enough.”

#3 (Full Damages) is incorrect because the Federal Circuit has previously held that the back-damages “actual notice” requirement focuses on providing-of-notice.  What we look at is whether the patentee acted to provide notice — it is “irrelevant … whether the defendant knew of the patent or knew of his own infringement.” Amsted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 187 (Fed. Cir. 1994) (citing Am. Med. Sys., Inc. v. Med. Engr. Corp., 6 F.3d 1523, 1537, N.18 (Fed. Cir. 1993) and quoting Devices for Medicine, Inc. v. Boehl, 822 F.2d 1062 (Fed.Cir.1987) (“Absent notice, [infringer’s] ‘knowledge of the patents’ is irrelevant.”).

Looking back to the statute — the key line calls for “proof that the infringer was notified of the infringement.”  287(a).  The court holds here that “notified of the infringement” requires an action by the patentee to provide actual notice. This outcome is similar to what is required by Fed. R. Civil Procedure R. 4(c) which places the burden on the plaintiff for providing notice of a new complaint being filed. A key difference though is that the rules of civil procedure actually spell out that “the plaintiff is responsible for having the summons and complaint served.” I’ll note here that the “filing” of a lawsuit triggers notice under 287 — service of the complaint and summons is seemingly not required. It is also different outcome than the notice requirement found in property recording statutes, including 35 U.S.C. 261 which asks whether a “subsequent purchaser” was “without notice.”

The language of Section 287 at issue here stems from the Patent Act of 1861. That statute indicated that – absent marking – “no damage shall be recovered by the plaintiff, except on proof that the defendant was duly notified of the infringement, and continued after such notice to make or vend the article patented.”  In an 1894 decision, the Supreme Court found that the “duly notified” statement requires an action by the patentee to provide notice.

The clear meaning of this section is that the patentee or his assignee, if he makes or sells the article patented, cannot recover damages against infringers of the patent, unless he has given notice of his right, either to the whole public, by marking his article ‘Patented,’ or to the particular defendants, by informing them of his patent, and of their infringement of it.

Dunlap v. Schofield, 152 U.S. 244, 247–48 (1894).  In Coupe v. Royer, 155 U.S. 565 (1895), the Supreme Court repeated that the required notice is “an affirmative fact, and is something to be done by him” i.e., done by the patentee.

In an interesting article, Michael McKeon argues that the Federal Circuit’s approach of requiring “an affirmative act” is actually based upon “a specific misquote of a critical word (act instead of fact).” Michael J. McKeon, The Patent Marking and Notice Statute: A Question of “Fact” or “Act”?, 9 Harv. J.L. & Tech. 429, 431 (1996). McKeon argues that Dunlap and Coupe were both about placing a burden of proof on the patentee — the patentee must affirmatively prove the fact that notice occurred — and that the Federal Circuit mistakenly read the cases as requiring an affirmative act of providing notice. McKeon cites to several pre-Federal Circuit cases that find actual notice is sufficient even without affirmative notice from the patentee. See, for instance, Warner v. Tennessee Products Corp., 57 F.2d 642 (6th Cir. 1932) (“Actual notice of the issue and contents of the patent, and of the claims that a practice infringes, is sufficient regardless of the source of such notice.”); Abington Textile Mach. Works v. Carding Specialists (Canada) Ltd., 249 F. Supp. 823, 849 (D.D.C 1965) (defendant’s actual/constructive notice was sufficient even though prior to formal notice from the patentee).

5 thoughts on “Proof that the Infringer was Notified of the Infringement

  1. 2

    Aside from my proscriptive comment, I have to wonder how the story written here intersects with one of the other big “0h N0es” of the pre-AIA era and the so-called (Solo cup-like) “Marking Tr011s.”

    How do the changes on marking that were included in the AIA impact this particular story?

  2. 1

    NOT the law (but I posit that it should be): publication of the granted patent itself should carry a strong presumption of notice.

    Anything else serves to defeat the very reason why we have a patent system in the first place.

    1. 1.1

      anon, I assume that would be intended as a gift to patentees, but I am not sure that is really such a helpful thing for them. By that logic, wouldn’t patentees and applicants also be presumed to have notice of all published prior art patents? And why stop at just patents? Why not have a presumption of notice for published non-patent references too?

      1. 1.1.1

        hardreaders,

        Thank you for the comment.

        In all effect though, your “By that logic, wouldn’t patentees and applicants also be presumed to have notice of all published prior art patents?

        is already in play in that patentees and applicants already face the legal fictional person of PHOSITA that has those attributes.

        Given that those attempting to obtain patent rights already face ‘that hurdle,’ it is an even ‘smaller step’ to change the law for policy reasons and make it so that it is simply a de facto worthwhile thing to be keeping up with patents in your business area.

        As I have stated, the very reason FOR having a patent system was “promotion,” and the use of that word has never been limited to the ‘technical advance’ meaning only, but has always included the advertising notion of simply ‘spreading the word.’

        Making this legal change plays directly into that aspect AND would serve the current counter-intuitive direction from many Big Corp entities that attempt to create a plausible deniability of ‘knowing’ and who direct their personal to NOT partake in the fruits of the publication efforts of the Office.

        In essence, the current policy acts to reward the very opposite of the system’s desired behavior.

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