False Marking Suits Take Off
I wanted to take a moment to note recent developments in false marking lawsuits under 35 USC Sec. 292. This issue has become especially interesting to me because I ran across a case of false marking over the weekend, when I was buying Valentine’s Day gifts for my girls.
As noted by this article from Courthouse News, there were about 15 false marking lawsuits in 2008 and about 12 in 2009. However, in late 2009 the Court of Appeals for the Federal Circuit decided the case of Forest Group v. Bon Tool (decision here) (PDF), in which it held that false marking penalties of up to $500 are to be assessed on a per-article basis. (For an excellent summary of the case by Robert A. Matthews, see this post at Patent Baristas). As part of the Forest Group decision, the Federal Circuit commented that there could be a “cottage industry” of litigants who have not suffered any direct harm. (This is a debatable statement, or perhaps short-sighted, but it is not my intent to dissect the comment here)
So, is there now a cottage industry of false marking suits? Sure looks like it. Since January 1st, here is a listing (perhaps complete) of 14 false marking suits:
- Brinkmeier v. Bayer Healthcare LLC, Jan. 3, 2010, D. Del.
- Hollander v. Hospira, Inc., Jan. 15, 2010, E.D. Pa.
- Heathcote Holdings Corp. v. Crayola LLC, Jan. 19, 2010, N.D. Ill.
- Hollander v. Timex Group USA, Inc., Jan. 29, 2010, E.D.
- Hollander v. EUSA Pharma (USA), Inc., Feb. 2, 2010, E.D. Pa.
- Hollander v. Etymotic Research, Inc., Feb. 5, 2010, E.D. Pa.
- Heathcote Holdings Corp., Inc. v. The Clorox Co. & Brita Products Co., Feb. 11, 2010, N.D. Ill.
- Josephs v. Federal-Mogul Corp., Feb. 12, 2010, E.D. Michigan
- Zojo Solutions, Inc. v. Leviton Mfg. Co., Inc., Feb. 12, 2010, N.D. Ill.
- Patent Compliance Group Inc. v. Timex Group USA Inc., Feb. 12, 2010, N.D. Texas
- Patent Compliance Group, Inc. v. Activision Publishing, Inc., Feb. 12, 2010, N.D. Texas
- Patent Compliance Group Inc v. Brunswick Corp., Feb. 12, 2010, N.D. Texas
- Josephs v. Sigma-Aldrich Corp., Feb. 16, 2010, E.D. Michigan
- Patent Compliance Group, Inc. v. Wright Medical Tech., Inc., Feb. 16, 2010, N.D. Texas
Two things I conclude from reviewing this list:
- The awareness of false marking as a viable claim, with damages calculated on a per-item basis, may have influenced the frequency with which it is asserted, and
- False marking lawsuits may turn into a cottage industry for groups or individuals who will seek out and file these suits (in other contexts, these groups or individuals are referred to as “trolls”).
One situation that will need to be resolved is how to deal with multiple lawsuits against a single defendant over the same product(s) and patent(s) (for example, the two suits against Timex listed above). Would some sort of estoppel or preclusion apply, such that only the first-filed lawsuit moves to completion? Will a defendant found to have marked falsely be entitled to a credit for damages already paid to one plaintiff? Will the cases be combined and the proceeds divided up between plaintiffs? My original thought is that some sort of issue preclusion should apply in favor of the defendant (since some courts will bar the second action even in the absence of mutuality of parties).
In a climate like this, what should patent holders consider? First, a system like this one from Ocean Tomo (which is used to manage a patent portfolio and its markings) may be a good investment for a sizable company. Second, if a company is not going to invest in a patent-marking management system, it should dedicate at least some amount of time to a review of its patent portfolio and product packaging to ensure that each patent noted on a product’s packaging is both a) in force, and b) has at least one claim covering the product.