ODI Queensland - Open Data Essentials - Law and Licensing
Mark With Care (Bob Barrett)
1. Spotts Fain IP Team Client Alert May 2010
Mark With Care: The Rise of § 292 False Patent Marking Lawsuits
By Bob Barrett
Everyone has seen a package or a product stating "Patent Pending" or "U.S. Pat. No.
X,XXX,XXX." Many businesses mark their packages or products with these or similar phrases
to place a proverbial "Stay Away" notice to potential infringers. Marking a product also allows a
business to recover patent infringement damages prior to the date the patentee sends a letter to an
alleged infringer about the patent or files a patent infringement lawsuit. Many businesses,
however, are unaware of the dangers of the "false marking" statute, which punishes intentionally
deceptive representations that a product is covered by a patent or a patent application.
False marking cases are governed by federal patent law and specifically are covered by 35
U.S.C. § 292. The statute includes a qui tam provision that allows private individuals or
businesses (e.g., disgruntled formed employees, business competitors, accused infringers, etc.) to
sue on behalf of the federal government. Section 292 traces its history back to the nineteenth
century, but it did not attract much attention until the Federal Circuit's December 29, 2009
decision in Forest Group, Inc., v. Bon Tool Co. 590 F.3d 1295 (Fed. Cir. 2009). Bob Barrett
In Forest Group, the Federal Circuit interpreted the statute as requiring that penalties be
imposed on a per article basis, and rejected an argument that the statute only imposes a single
fine for each decision to falsely mark. The statute sets the maximum fine at up to $500 for each
false marking offense, with half of the penalty going to the suing party and the other half to the
federal government. After Forest Group was remanded by the Federal Circuit, the district court
set the false marking fine at the highest point of the product price range, which was $180 per
falsely marked article. The district court reasoned that setting the fine at the highest point would
"fulfill[] the deterrent goal of § 292's fine provision." Forest Group, Inc., v. Bon Tool Co., Civil
Action 4:05-cv-04127 (S.D. Tex. Apr. 27, 2010).
As one would expect, the number of false marking cases soared after Forest Group. During
2009, there were fewer than 10 false marking lawsuits brought in the United States. In contrast,
during the first four months of 2010, there have been over 130 false marking lawsuits filed.
Forest Group seemingly created a fantasy scenario for plaintiffs' attorneys who dreamed about
Dana McDaniel
millions of falsely marked products with a potential payday of $250 for each product.
Chair, IP Team
There are still questions about the false marking statute that need to be decided and may
ultimately squash the cottage industry of false marking plaintiffs' attorneys. For example, the
Federal Circuit is currently deciding the burden of proof required to establish "intent to deceive the public," a required element of
a false marking violation. Depending on how the Federal Circuit rules on the intent element, and legislation presently being
2. considered in Congress, false marking lawsuits may once again become primarily a patent infringement defense. Nevertheless,
false marking currently represents a serious threat to businesses. Hoping for a rescue from Congress or the Federal Circuit is not
a strategy to deal with the false marking threat.
So what should a business do? First, since marking remains valuable as a notice to potential infringers and can increase
potential infringement damages awards, businesses should continue to use marking as a tool to protect their patented products.
Second, businesses with marked products, or considering marking future products, should consider: (i) conducting an audit of
current products and packages to ensure the accuracy of markings; and (ii) developing a marking policy for future products.
For assistance developing and implementing a patent marking audit strategy for your business, or for assistance defending
against a false marking lawsuit, please contact Bob Barrett (bbarrett@spottsfain.com) or Dana McDaniel
(dmcdaniel@spottsfain.com).
![Spotts Fain IP Team Client Alert May 2010
Mark With Care: The Rise of § 292 False Patent Marking Lawsuits
By Bob Barrett
Everyone has seen a package or a product stating "Patent Pending" or "U.S. Pat. No.
X,XXX,XXX." Many businesses mark their packages or products with these or similar phrases
to place a proverbial "Stay Away" notice to potential infringers. Marking a product also allows a
business to recover patent infringement damages prior to the date the patentee sends a letter to an
alleged infringer about the patent or files a patent infringement lawsuit. Many businesses,
however, are unaware of the dangers of the "false marking" statute, which punishes intentionally
deceptive representations that a product is covered by a patent or a patent application.
False marking cases are governed by federal patent law and specifically are covered by 35
U.S.C. § 292. The statute includes a qui tam provision that allows private individuals or
businesses (e.g., disgruntled formed employees, business competitors, accused infringers, etc.) to
sue on behalf of the federal government. Section 292 traces its history back to the nineteenth
century, but it did not attract much attention until the Federal Circuit's December 29, 2009
decision in Forest Group, Inc., v. Bon Tool Co. 590 F.3d 1295 (Fed. Cir. 2009). Bob Barrett
In Forest Group, the Federal Circuit interpreted the statute as requiring that penalties be
imposed on a per article basis, and rejected an argument that the statute only imposes a single
fine for each decision to falsely mark. The statute sets the maximum fine at up to $500 for each
false marking offense, with half of the penalty going to the suing party and the other half to the
federal government. After Forest Group was remanded by the Federal Circuit, the district court
set the false marking fine at the highest point of the product price range, which was $180 per
falsely marked article. The district court reasoned that setting the fine at the highest point would
"fulfill[] the deterrent goal of § 292's fine provision." Forest Group, Inc., v. Bon Tool Co., Civil
Action 4:05-cv-04127 (S.D. Tex. Apr. 27, 2010).
As one would expect, the number of false marking cases soared after Forest Group. During
2009, there were fewer than 10 false marking lawsuits brought in the United States. In contrast,
during the first four months of 2010, there have been over 130 false marking lawsuits filed.
Forest Group seemingly created a fantasy scenario for plaintiffs' attorneys who dreamed about
Dana McDaniel
millions of falsely marked products with a potential payday of $250 for each product.
Chair, IP Team
There are still questions about the false marking statute that need to be decided and may
ultimately squash the cottage industry of false marking plaintiffs' attorneys. For example, the
Federal Circuit is currently deciding the burden of proof required to establish "intent to deceive the public," a required element of
a false marking violation. Depending on how the Federal Circuit rules on the intent element, and legislation presently being](https://image.slidesharecdn.com/markwithcarebobbarrett-12795662243376-phpapp02/85/mark-with-care-bob-barrett-1-320.jpg)
