The changes to the false marking statute under the America Invents Act are retroactive; any existing or future plaintiff must be a party that has suffered “competitive injury."
In 2008, the Plaintiff brought a qui tam action for false marking based on Defendant allegedly using expired patent numbers in its marking materials for a line of bow ties. The America Invents Act (“AIA”) was passed into law while Plaintiff’s action was pending. The AIA made several significant changes to the false marking statute: (1) it eliminated the qui tam provision, instead allowing only a party who suffered a “competitive injury” to bring suit; (2) it expressly stated that marking a product with an expired patent number was not false marking; and (3) it expressly applied the changes to all pending cases. After the AIA passed, Plaintiff conceded that he no longer had standing to pursue his claim. The district court ordered Plaintiff to show cause why he did have standing. Plaintiff argued that the changes amounted to an impermissible pardon by Congress for false marking violations that occurred before the AIA, and that the government did not have the authority to eliminate pending qui tam actions. The district court found that the AIA changes did not amount to a pardon, but instead a grant of “general amnesty,” which is plainly within the purview of Congress’s powers.
The Federal Circuit affirmed. After determining that Plaintiff had standing to appeal, the court considered Plaintiff's main arguments. The court determined that the AIA changes—and particularly, the express statement that marking a product with an expired patent number is not a false marking violation—did not amount to a pardon, but were instead better characterized as repealing the earlier law. Congress clearly has the power to repeal and change laws, and it did so by redefining the act of “false marking.” Plaintiff’s argument about the government’s ability to vitiate a qui tam action through a pardon after it had already started was found equally unavailing. The Federal Circuit held that qui tam plaintiffs do not have vested rights in a case until a judgment is entered. And, as the court determined, the change in law was not a “pardon.” Thus, Plaintiff had no legal right to continue to prosecute his claim in the face of the AIA’s change in law.
Plaintiff raised a host of additional arguments, including that he suffered “competitive injury,” and that the change in law violated the Fifth Amendment Takings Clause because he lost the filing fee paid to initiate his lawsuit. The Federal Circuit found that Plaintiff waived these arguments by not raising them in his initial submission to the district court.
A copy of the opinion can be found here.