False Patent Marking

False patent marking is the practice of marking products with patent numbers that do not apply to the product, or using patent-related language with intent to deceive: § 292 PROHIBITS: (a) marking any article with the word 'patent' or any word or number importing it as patented, for the purpose of deceiving the public, if the article is not covered by any patent; (b) using 'patent applied for,' 'patent pending,' or similar language if no application has actually been filed; INTENT REQUIREMENT: § 292 requires that the marking be done FOR THE PURPOSE OF DECEIVING THE PUBLIC; mere negligent mismarking does not violate § 292; the intent must be to deceive, not merely carelessness; COMMON FALSE MARKING SCENARIOS: (1) continuing to mark with a patent number after the patent expires (though AIA created a safe harbor — see below); (2) marking with a patent number that covers a different product, not the marked article; (3) using 'patent pending' after the application has been abandoned or the patent has issued; (4) marking with a competitor's patent number to imply affiliation or falsely suggest the product is patented by someone else; VIRTUAL MARKING (§ 287(a) UPDATE): the AIA allows 'virtual marking' — instead of listing specific patent numbers on the article, a manufacturer can mark with a freely accessible website address (URL) where the current list of applicable patents is posted; this reduces false marking risk because the website can be easily updated when patents expire or new patents issue.

The America Invents Act (AIA, September 16, 2011) dramatically changed false patent marking law: PRE-AIA LAW — QUI TAM SUITS: before the AIA, § 292 was a qui tam statute; any person could file a false marking suit even without any injury; the AIA's amendment was triggered by a wave of qui tam litigation in 2009–2011; plaintiff's law firms filed hundreds of suits against companies marking with expired patents, seeking fines of up to $500 per article; FOREST GROUP v. BON TOOL (Fed. Cir. 2009): the Federal Circuit held that the $500 fine applied PER ARTICLE, not per decision to mark; companies with millions of articles marked with a single expired patent faced potential liability in the billions; this interpretation triggered the wave of qui tam suits; AIA CHANGE (§ 292(b)): the AIA amended § 292(b) to eliminate most third-party standing: 'A person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a Federal district court for recovery of damages adequate to compensate for the injury'; CURRENT STANDING: only two parties may sue: (1) the UNITED STATES (through DOJ); OR (2) a PERSON WHO HAS SUFFERED COMPETITIVE INJURY from the false marking; COMPETITIVE INJURY REQUIREMENT: the plaintiff must show actual harm from the false marking; typically, this means a competitor whose sales were reduced because purchasers believed the marked article was patented (deterring competitors from selling similar products); EXPIRED PATENT SAFE HARBOR: the AIA also created a safe harbor: marking with an expired patent number is NOT a violation if the marking was made in a reasonable belief that the patent was valid when the article was marked.

The AIA created a specific safe harbor for a common false marking scenario — continuing to mark with a patent number after the patent expires: SAFE HARBOR TEXT (§ 292(c)): 'No civil action may be brought under this section for marking an article with the number of a patent that has expired'; this was a direct legislative response to the wave of suits against companies marking with expired patents; SCOPE OF SAFE HARBOR: marking with an expired patent number is NOW COMPLETELY PROTECTED from § 292 liability; even if a company knowingly continues to mark with an expired patent number, this does not violate § 292; PRACTICAL IMPACT: the safe harbor virtually eliminated expired patent number claims in false marking suits; the only viable § 292 claims now involve: (a) marking with a non-expiring patent that never covered the product; (b) using 'patent pending' when no application exists; (c) marking with a fraudulently obtained patent; VIRTUAL MARKING AS AN ALTERNATIVE: even with the safe harbor, companies increasingly use virtual marking (website URL) because: (a) it is easy to maintain up-to-date listings; (b) when new patents issue, they can be added immediately; (c) when patents expire, they can be removed without reprinting products; (d) it reduces administrative burden of tracking which patents cover which products; RETROACTIVE EFFECT: the AIA false marking amendments were applied retroactively to pending cases, mooting many pre-AIA qui tam suits.

Patent marking serves a different purpose from false marking law — it is how patent owners provide constructive notice of their patent rights: § 287(a) NOTICE FUNCTION: a patentee or licensee must mark products with the applicable patent numbers (or a website URL for virtual marking) to provide constructive notice of the patent; WITHOUT MARKING: if the patentee fails to mark covered articles, damages in infringement litigation are limited to the period AFTER the defendant had actual notice of the patent; the patentee cannot recover damages for the infringement period before notice; CONSTRUCTIVE NOTICE THROUGH MARKING: if the patented article is marked, the patentee is deemed to have given constructive notice to the infringer from the date of first marking; damages can be recovered from that date forward, even if the infringer was not personally aware of the specific patent; VIRTUAL MARKING: the patent number or a website URL (§ 287(a)) must appear on the article itself; the website must: (a) be freely accessible; (b) associate the patent numbers with the specific products; (c) be updated when patents change; MARKING OBLIGATION: marking is not legally required — a patentee can choose not to mark; the consequence is only the limitation on damages (not a violation); METHOD CLAIMS: § 287(a) does not require marking when the patent covers only a method claim (not a product); method infringement is often complete upon performing the steps, which may not be visible in any product; IMPACT ON FALSE MARKING SUITS: the marking requirement creates the risk of false marking — a company that tries to mark products to preserve its damages recovery may inadvertently mark with incorrect or expired patents.

Post-AIA false marking enforcement has narrowed significantly in terms of who can sue and what penalties apply: CURRENT ENFORCEMENT: only two parties can bring a false marking suit: (1) THE US GOVERNMENT: the US (through the DOJ or USPTO) can sue under § 292(a) for not more than $500 per offense; (2) A PRIVATE PARTY WITH COMPETITIVE INJURY: a person who has suffered competitive injury may sue under § 292(b) for damages adequate to compensate for the injury; GOVERNMENT ACTION: government suits for false marking are exceptionally rare in practice; the DOJ and USPTO have other priorities; PRIVATE PARTY COMPETITIVE INJURY: to bring a false marking suit as a private party, the plaintiff must show: (a) a violation of § 292(a) (false marking with deceptive intent); AND (b) competitive injury caused by the false marking; WHAT IS COMPETITIVE INJURY: courts have required plaintiffs to show that potential customers were deterred from purchasing the plaintiff's product because they believed the falsely marked article was patented; this is a higher burden than the pre-AIA qui tam standard; PRACTICAL REALITY POST-AIA: false marking litigation has declined dramatically; most false marking claims are resolved informally when the patent owner is notified; false marking suits are now primarily asserted by direct competitors with evidence of actual harm; NOT A CRIMINAL VIOLATION: false marking is a civil violation only; there is no criminal prosecution for false patent marking under § 292.