False marking flurry

Nicole Keenan Apr. 17, 2010, 8:44am


There have been a flurry of "false marking" cases filed recently, several of which have been in the Eastern District of Texas.

Federal law prohibits the use of false or misleading patent marks on consumer products. It also allows ordinary citizens-- dubbed false marking "bounty-hunters" by some-- to file suit and share their bounty with the federal government.

East Texan Sarah Tompkins has sued several large companies including Amazon.com, Target Stores Inc. and Wal-Mart Stores Inc. for false marking. Arthur Lee Yarbough has filed a complaint for false patent marking against S.C. Johnson & Son Inc. and Energizer Holdings Inc.

If Ms. Tompkins or Mr. Yarbough are successful, they could stand to collect serious money as the current statute allows for a fine of up to $500 for the sale of each improperly-marked item (note that the statute also requires that one half of the total recovered amount go "to the use of the United States").

What are these cases all about and why are there so many being filed? Some courts have stated that the purpose or intention of the false marking statute is to protect the public from being misled into believing that an article is patented when, in fact, it is not.

In addition, there have been so many cases recently filed because the current version of the false marking statute allows "any person" – including ordinary citizens like Ms. Tompkins and Mr. Yarbough - to sue for the offense of false patent marking.

However, things may change significantly with current and future false marking cases, if legislation pending in Congress finds success.

If an amendment to the pending Patent Reform Act, proposed by U.S. Sen. Patrick Leahy (D-VT) is enacted, the statute would replace "any person" with "any person who has suffered a competitive injury," curbing filings by the most entrepreneurial patent litigators among us. U.S Rep. Darrell Issa (R-CA) has introduced a similar bill in the House.

Note this change, if enacted, disallows a suit by "any person" and requires an actual injury as a predicate for standing to sue. Of course, the question will remain - what constitutes "competitive" injury? We will most likely have to wait and see how the courts interpret this.

Of course, changes to the law may not entirely dispel the recent growth in false marking cases, as we have seen more recently a new trends they don't address: competitor suing competitor for false patent marking. These newly filed cases are likely to remain no matter what the Congress does.

So, the false marking litigations may not be simply a "fad" and instead may be here to stay if this new competitor suing competitor trend continues.

Nicole Keenan is a partner in the Chicago office of McDonnell Boehnen Hulbert & Berghoff LLP, where she specializes in patent law. Read more at www.falsemarking.net.

More News