In Frolow v. Wilson Sporting Goods Co., the Federal Circuit refused to adopt the doctrine of marking estoppel, but held that evidence that Wilson had marked some accused tennis racket models constituted evidence of infringement sufficient to raise a genuine issue of material fact and prevent summary judgment of non-infringement.

The Patent At Issue

The patent at issue was Frolow’s U.S. Patent RE33,372, directed to a tennis racket with specific properties. Wilson had entered into a License Agreement with Frolow, under which Wilson agreed to pay royalties for “Licensed Article(s),” defined as “tennis rackets which are covered by one or more unexpired or otherwise valid claims” of the ‘372 patent.

Mr. Frolow suspected that “Wilson was not paying royalties on all the Licensed Articles and filed suit alleging that Wilson breached the License Agreement and infringed the ’372 patent.” As explained by the Federal Circuit, because of an arbitration provision, “the court limited the breach of contract case to determining which Wilson racket models were Licensed Articles.”

The District Court Proceedings

Frolow originally challenged 42 Wilson tennis racket models. Wilson submitted an expert report showing that the tennis racket models did not fall within the scope of the ‘372 patent. Frolow submitted a declaration disputing Wilson’s methodology, and cited the fact that “Wilson had marked fourteen of the rackets with the ’372 patent number,” arguing that “Wilson’s marking raised a genuine issue of material fact” regarding those models.

The district court rejected Frolow’s marking argument, and “also declined to find that Wilson’s marking prevented it from challenging whether the accused racket models were Licensed Articles.” The district court therefore granted summary judgment in favor of Wilson.

The Federal Circuit Decision

At the Federal Circuit, Frolow argued that “Wilson’s marking of fourteen racket models with the ’372 patent number estopped it from arguing that those models are not Licensed Articles,” or at least that “Wilson’s marking was sufficient to raise a genuine issue of material fact as to whether the fourteen racket models are Licensed Articles.”

In response, Wilson argued that the marking was “inadvertent” and that its “expert report proved that the fourteen racket models were not Licensed Articles” because it showed that the rackets’ properties did not fall within the ‘372 patent.

The Federal Circuit rejected the doctrine of “marking estoppel”:

We decline to create a separate, equitable doctrine unique to patent law, where Congress has spoken and standard evidentiary practices provide adequate remedy. Congress enacted legislation, recently amended, which provides a remedy for false marking. … Equity should not rush in where an adequate remedy at law exists. It would be inconsistent with this legislation to adopt a different and broader remedy for the same harm.

On the other hand, the Federal Circuit agreed that Wilson’s marking supported Frolow’s case:

[W]e do agree that the fact that Wilson marked their products with his patent number is a fact which supports his allegation that Wilson’s products fall within the patent claims. The practice of marking a product with a patent number is a form of extrajudicial admission that the product falls within the patent claims.

The court explained:

Generally, extrajudicial admissions of facts, such as patent marking, are simply evidence that may be countered by the party that made the admission. These admissions are not “binding,” and “may be controverted or explained by the party” that made the statement.

Thus, the Federal Circuit found that “the district court erred when it held that the defendant’s marking was irrelevant.”

Placing a patent number on a product is an admission by the marking party that the marked product falls within the scope of the patent claims. The act of marking is akin to a corporate officer admitting in a letter or at a deposition that the company’s product infringes a patent.

The Federal Circuit also held that, “in this case,” Frolow’s position that the tennis racket models fall within the scope of the patent coupled with the evidence of marking made summary judgment in favor of Wilson improper.

[E]vidence of marking is circumstantial evidence that the marked product falls within the patent claims and can preclude summary judgment in appropriate cases.

The Other Opinions

The Federal Circuit opinion was authored by Judge Moore, and joined by Judge Clevenger and Judge Newman. Nevertheless, Judge Moore and Judge Clevenger each wrote separate opinions expressing “additional views,” and Judge Newman wrote a concurring opinion.

Judge Clevenger wrote to explain that, not withstanding the court’s opinion, the district court may exclude the evidence of marking under Rule 403 of the Federal Rules of Evidence, which provides that “[t]he court may exclude relevant evidence if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, [or] misleading the jury….” In particular, Judge Clevenger believes that the marking evidence may be of limited probative value where Wilson had submitted direct evidence that the fourteen tennis racket models do not satisfy the claim limitations, such that “Wilson would be unfairly prejudiced by its admission, or .. the evidence would mislead or confuse the jury.”

Judge Moore wrote to respond to Judge Clevenger’s additional views, and express her disagreement that Wilson had established that the fourteen tennis racket models do not infringe the patent.

In her concurring opinion, Judge Newman emphasized that Wilson should bear the consequences of its marking:

Throughout the term of the Agreement, Wilson’s position was that these marked racket models were Licensed Articles, and by so marking the rackets Wilson received the benefit of the patent. This was not an inconsequential puff—it was an announcement and admission that the rackets were Licensed Articles under the contract.

According to Judge Newman:

On remand Wilson bears the burden of coming forward with evidence adequate to show that it should not be held to its own long-standing belief that the marked rackets were Licensed Articles, a contract interpretation on which both parties relied for the entire life of the contract. I do not share my colleagues’ theory that the parties’ view of their contract throughout its term is merely “circumstantial evidence” of a royalty obligation due.

The majority opinion rejected this burden-shifting, and noted that Frolow, as the plaintiff, bore the burden of proof.