The US Court of Appeals for the Federal Circuit vacated a district court judgment as it relates to marking, finding that the patent owner cannot use disclaimer to avoid the marking requirement (35 USC § 287) and thereby attempt to collect pre-notice damages. Rembrandt Wireless Techs., LP v. Samsung Elecs. Co., Ltd., Case No. 16-1729 (Fed. Cir., Apr. 17, 2017) (Stoll, J).
This case relates to an infringement action addressing patents claiming a system and method of communication between modems utilizing a modulation method. Samsung appealed several issues, among them the district court’s decision refusing to bar Rembrandt’s recovery of pre-notice damages based on Rembrandt’s failure to mark products that were covered by an asserted patent claim that Rembrandt disclaimed after filing its complaint.
Rembrandt licensed one of the patents at issue in this case to Zhone Technologies. The license agreement between Rembrandt and Zhone did not require Zhone to mark its products with the patent number, and Zhone sold unmarked products embodying claim 40 of the asserted patent. After receiving notice of Rembrandt’s patents on the filing of the complaint in this matter, Samsung moved to limit its potential damages pursuant to 35 USC § 287, the patent marking statute, based on failure of Rembrandt’s licensee to mark products covered by claim 40. Eight days after filing its complaint, Rembrandt withdrew claim 40 from its infringement allegations and filed a statutory disclaimer at the US Patent and Trademark Office, formally disclaiming claim 40. The district court denied Samsung’s motion to bar Rembrandt’s recovery of pre-notice damages, accepting Rembrandt’s argument that any prior obligation to mark products embodying claim 40 vanished once it disclaimed claim 40. Samsung appealed.
The Federal Circuit reversed, explaining that marking under § 287(a) is permissive, not mandatory. However, if a patent owner chooses not to mark, “no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice.” The Court rejected Rembrandt’s position that its obligation to mark its products embodying claim 40 vanished when Rembrandt disclaimed claim 40, concluding that it is irreconcilable with the statute’s purpose to notify the public of the patent rights associated with patented products. As the Court explained, while a disclaimer relinquishes certain rights of the patent owner, it cannot serve to relinquish any rights of the public. Because the marking statute’s focus is not only on the rights of the patentee but also on the rights of the public, the Court concluded that disclaimer cannot serve to retroactively dissolve the § 287(a) marking requirement.
On a related issue, the Federal Circuit found that whether the marking statute should attach on a claim-by-claim rather than on a patent-by-patent basis is a novel legal issue raised by Rembrandt that has not been squarely addressed in the Court’s prior decisions. Because the parties did not address this legal issue in briefing on appeal, the Court remanded to the district court to address this legal issue in the first instance.