The Federal Circuit defined the level of intent required for false patent marking liability in its Pequignot v Solo Cup decision of June 10.1 Noting that the false patent marking statute is a criminal provision with civil penalties, the opinion clarifies that liability for false patent marking requires specific intent to deceive the public. The court also held that while other intent standards may require clear and convincing evidence, the false marking statute requires only a preponderance of the evidence. Accordingly, the inverse is true; showing lack of deceptive intent only requires a preponderance of the evidence. This decision should offer hope for many defendants caught in the wave of false patent marking cases launched in the wake of Forest Group v Bon Tool Company.2
Background. The false marking offense consists of two prongs: 1) a false mark and 2) intent to deceive. While the bounds of the first prong have been more fully explored, jurisprudence regarding intent has been lacking. In this case, Pequignot argued that Solo had falsely marked its products with expired patents and with a statement that the products “may be covered” by one of many other patents. Pequignot further argued that the intent requirement was satisfied by Solo’s mere knowledge that it was marking its products with expired patents.
The Ruling. Consistent with prior decisions, the Federal Circuit rejected a defense that marking with expired patents is not “false marking.” The court noted that, as with never-patented articles, marking with an expired patent number imposes upon the public the expense and burden of determining whether the patent is valid. Solo’s assertion that it had relied on the advice of its counsel and therefore lacked the requisite level of intent for false marking liability was accepted. The court commented that the bar for proving deceptive intent is “particularly high.” A defendant must have acted with the specific intent to deceive the public – not merely intent to falsely mark. In other words, mere knowledge that a patent had expired is not sufficient.
Solo also argued that the statement that a product “may be covered” by other patents is a truthful statement. The court agreed, resolving some inconsistent prior jurisprudence. Because that language stated the truth – that some articles may be covered by the listed patents, the court found it that was “highly questionable” whether such a statement could be made with the intent of deceiving the public.
Conclusion and Application. The Pequignot decision offers guidance as to the burden of proof for the intent element of 35 U.S.C. § 292. Specifically, plaintiffs must now demonstrate that the defendant marked products with an expired or non-applicable patent with the specific intent to deceive the public. Showing that the defendant had knowledge of the falsity of a mark is not sufficient. A plausible defense exists for defendants who, in good faith, relied on the advice of counsel or implemented cost-effective measures to slowly remove non-applicable patent numbers from products.
As always, it is a good idea to seek advice from your patent counsel before marking products with patent numbers or a patent pending designation. The general principals set forth in our previous Townsend update titled, “Avoiding and Defending a False Patent Marking Lawsuit” remain applicable.3 Take heed of any accusations or knowledge of false marking and take diligent action to remedy the situation.