Another False Marking Decision from the Federal Circuit

Anthoula Pomrening Sep. 21, 2010, 5:23am

The recent frenzy of false marking cases has resulted in yet another Federal Circuit decision in this arena with Stauffer v. Brooks Brothers Inc.

By way of background, in December 2008, Raymond E. Stauffer, a patent attorney, brought a qui tam action in the Southern District of New York under 35 U.S.C. 292 asserting that Brooks Brothers had falsely marked its men's bow ties with expired patents.

In concluding that Stauffer lacked standing, the district court found that Stauffer's allegations concerning Brooks Brothers' conduct "were too conjectural or hypothetical to constitute an injury in fact." The district court also denied the government's motion to intervene, finding that there was no basis for intervention as of right and insufficient basis for permissive intervention.

To establish standing, the Federal Circuit stated, "Stauffer must allege that the United States has suffered an injury in fact causally connected to Brooks Brothers' conduct that is likely to be redressed by the court."

The Federal Circuit found that a violation of 35 U.S.C. 292 itself was an injury to the United States, for which the government and Stauffer, standing in the government's stead as its assignee, would have standing to enforce. The court made it clear that Stauffer's standing arose from his status as "any person", as set forth in 35 U.S.C. 292(b), and not from the merits of his contentions.

"The standing doctrine is intended to require that the plaintiff is a proper person to bring the suit; it does not require that the plaintiff properly allege all of the elements of his claim," the court wrote.

Accordingly, the Federal Circuit reversed the district court's dismissal of Stauffer's qui tam action for lack of standing.

After deciding the standing issue, the Federal Circuit then turned to the district court's denial of the government's motion to intervene. The court noted that the government has an interest in enforcing its laws and in half of the penalty sought by Stauffer and that Stauffer may not adequately represent those interests.

Another point noted by the court was that the government would be prevented by res judicata to recover from Brooks Brothers should Stauffer lose.

Since the government's "ability to protect its interest in this particular case would be impaired" without intervention, the Federal Circuit reversed the district court's decision denying the motion to intervene.

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