IP Buzz

The Federal Circuit reminded us again that, while patent marking isn't required, failing to diligently mark your products and monitor your licensees' marking of a patented product has consequences. The patent marking statute generally provides that a patent owner may give notice to the public that a product is patented by marking the article in a manner provided by the statute. While the statute is permissive, failure to mark results in damages being limited to infringement occurring after an infringer was notified of the infringement. If a patent owner's licensee fails to mark, damages are similarly limited.

Rembrandt sued Samsung for infringement of two patents. After the jury awarded Rembrandt $15.7 million in damages at trial, Samsung moved to limit Rembrandt's pre-suit damages based on its failure to mark. Specifically, Rembrandt had previously licensed one of the patents to a third party, but the licensee did not mark and the license agreement had no marking requirement. The unmarked product embodied one of the claims asserted in the action. In response, Rembrandt promptly withdrew the claim from its infringement allegations and filed a statutory disclaimer of the claim pursuant to 35 U.S.C. § 253(a) and 37 C.F.R. § 1.321(a). The district court denied the motion to limit damages, accepting Rembrandt's argument that any previous obligation to mark "vanished" with the disclaimed claim because "a disclaimed patent claim is treated as if it never existed."

The Federal Circuit was not as forgiving. The Federal Circuit held that Rembrandt could not absolve itself of its duty to mark just by disclaiming the claim practiced by the unmarked product, stating that this would essentially be an "end-run around the marking statute." The court also noted that Rembrandt's position was "irreconcilable with the statute's purpose": 1) helping to avoid innocent infringement; 2) encouraging patentees to give notice to the public that the article is patented; and 3) helping the public to identify whether an article is patented. Although a disclaimer has been held to relinquish the rights of a patent owner, the court has never held that a patent owner's disclaimer relinquishes the rights of the public. Here, finding that the marking statute implicates the rights of the patent owner and the public, the court concluded that a disclaimer cannot serve to retroactively avoid the requirements of the marking statute. The court also noted that this case presented a unique issue not yet addressed by the Federal Circuit: namely, should marking apply on a patent-by-patent basis or a claim-by-claim basis? In other words, should a patentee be barred from collecting back damages on claims that complied with the marking statute just because the patent also contained claims practiced by an unmarked product? While tempted to explore this question, the Federal Circuit noted that this question had not been raised on appeal and should be remanded back to the district court for a first stab at the issue.