How to Avoid the Potentially Costly Mistake of False Patent Marking
In order to recover damages due to patent infringement, the patent holder must mark patented articles or their packaging with the patent number and the word 'patent' or 'pat.'
Marking, however, has its risks, in particular, when a patent has expired or a product has been modified after it has been patented. In such cases, the patent holder can be sued for false marketing.
False patent marking, punishable by a fine of up to $500 per instance, occurs where an unpatented product is marked or advertised as patented or marked as "patent pending" or "patent applied for" when no patent is pending.
The Federal Circuit, the court tasked with deciding patent appeals, recently sent a shock wave throughout industry with its decision in the Bon Tool case that each falsely marked article could give rise to a fine of up to $500 per article. For mass produced articles, the potential liability for false marking could be astronomical. This decision has resulted in increased levels of litigation because of the potential for enormous damages.
The shock wave has dissipated to some extent with the recent Solo Cup decision. In that case, the plaintiff had sought a fine of $500 per mismarked item which could have amounted to approximately 5.4 trillion dollars.
The Federal Circuit determined that Solo Cup, did not intend to deceive the public in marking products with an expired patent number. Rather, they had acted on good faith reliance on the advice of counsel in replacing molds (with the expired patent numbers) with unmarked molds as the marked molds wore out, in accordance with their policy.
In light of these cases, patent holders should be extra careful when it comes to marking products and advertisements with patent numbers.
Where the design of your product has changed, consult your patent lawyer to determine whether the patent still covers your product.
If you are in doubt as to whether your patent has expired or is still in force, consult your patent lawyer.
When a patent expires or is no longer in force, discontinue marking the patent number as soon as possible. Where it is impractical to discontinue marking immediately, set up a policy in conjunction with your patent lawyer for phasing out the erroneous patent marking.
Jonathan Grad is an intellectual property lawyer and partner at the Eden Prairie law firm of Vidas, Arrett & Steinkraus, PA. www.vaslaw.com