Archive for the ‘35 USC 292’ Category

Forest Group v. Bon Tool on remand

April 29, 2010 Leave a comment

In Forest Group, Inc. v. Bon Tool Co. [DOC], 590 F.3d 1295 (Fed. Cir. 2009), the Federal Circuit, on appeal from the U.S. District Court for the Southern District of Texas, held that a false marking fine of not more than $500 should be assessed for each article marked falsely.

On remand, the Southern District ordered [PDF] on Tuesday that Forest Group shall be fined $180 for each falsely-marked article, for a total fine (based on evidence at trial of 38 sales of falsely-marked articles) of $6,840.00. This is not much in absolute dollars. Notably, however, this represents the upper limit of the sale price for each of the articles, meaning that Forest made no money at all on any of the sales of a falsely-marked product (and, indeed, could have lost money on some sales, since the evidence showed there were sales at prices as low as $103).

The court noted that such a fine (amounting to the total sales price of the false-marked articles) “fulfill[s] the deterrent goal of [35 U.S.C. Sec. 292’s] fine provision.”

Indeed it does.


False Marking Suits Go Bananas

February 23, 2010 1 comment

We noted in a post last week that there has been a dramatic uptick in the rate of filing of false marking suits.  As noted there, false marking suits are qui tam actions filed under 35 USC Sec. 292, with an individual making the claim on behalf of the United States (any monetary award is shared equally between the plaintiff and the U.S.).  We posited (as have others, such as Justin Gray at Gray on Claims) that this uptick may be due to the Federal Circuit’s holding in Forest Group v. Bon Tool that false marking damages shall be awarded on a per-article basis (rather than on a per-occurrence basis), thus raising the possibility of large damage awards.

The rate of filings has continued unabated.  Using the lawsuit classifications of RFC Express, it appears that there have been 14 18 more false marking complaints filed in the last 4 days.

  • Arthur Lee Yarbough v. S.C. Johnson & Son, Inc. & Energizer Holdings, Inc., Feb. 19, 2010, 10-cv-00096, E.D. Tex.
  • Gregory Harrelson v. Stanley Works, Inc., Feb. 19, 2010, 10-cv-00371, N.D. Ala.
  • Advanced Cartridge Techs., LLC v. Lexmark Int’l, Inc., Feb. 22, 2010, M.D. Fla.
  • Patent Compliance Group, Inc. v. Tweezerman Int’l LLC, Feb. 22, 2010, 10-cv-00350, N.D. Tex.
  • Patent Compliance Group, Inc. v. Nutro Products Inc. & S&M NuTec LLC, Feb. 22, 2010, 10-cv-00351, N.D. Tex.
  • Azimuth Unlimited, LLC v. Seatel, Inc., Feb. 22, 2010, 10-cv-60253, S.D. Fla.
  • Thomas A. Simonian v. Mead Westvaco Corp., Feb. 23, 2010, 10-cv-01217, N.D. Ill.
  • Thomas A. Simonian v. Weber-Stephen Prods. Co., Feb. 23, 2010, 10-cv-01220, N.D. Ill.
  • Patent Compliance Group, Inc. v. Hunter Fan Co., Feb. 23, 2010, 10-cv-00359, N.D. Tex.
  • David O’Neill v. Roche Diagnostics Corp., Feb. 23, 2010, 10-cv-01205, N.D. Ill.
  • Thomas A. Simonian v. Pfizer, Inc., Feb. 23, 2010, 10-cv-01193, N.D. Ill.
  • Thomas A. Simonian v. Bunn-O-Matic Corp., Feb. 23, 2010, 10-cv-01203, N.D. Ill.
  • Thomas A. Simonian v. Ciba Vision Corp., Feb. 23, 2010, 10-cv-01202, N.D. Ill.
  • Thomas A. Simonian v. Blistex, Inc., Feb. 23, 2010, 10-cv-01201, N.D. Ill.
  • Thomas A. Simonian v. Fiskars Brands, Inc., 10-cv-01225, Feb. 23, 2010, N.D. Ill.
  • Thomas A. Simonian v. Oreck Corp. et al., 10-cv-01224, Feb. 23, 2010, N.D. Ill.
  • Thomas A. Simonian v. Merial LLC et al., 10-cv-01216, Feb. 23, 2010, N.D. Ill.
  • Thomas A. Simonian v. Kimberly-Clark Corp. et al., 10-cv-01214, Feb. 23, 2010, N.D. Ill.

This listing makes crystal clear that at least some people (or entities) are making a serious go of it in searching out falsely marked goods.  If businesses needed any more encouragement to review their patent portfolios and package markings, this should be it.  Any falsely marked good is now like big game to the false marking hunters.

[Updated at 10:26pm to add a 14th complaint]

[Updated 7:00am Feb. 24, 2010 to add more]

Categories: 35 USC 292, False marking

False Marking Suits Take Off

February 17, 2010 2 comments

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:

  1. 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
  2. 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.

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