A Benjamin N. Cardozo School of Law-affiliated non-profit legal services organization, known as the Public Patent Foundation, has filed a pleading in its false-marking lawsuit against the company that makes Tylenol® products, challenging the constitutionality of a retroactive America Invents Act (AIA) provision that would divest the non-profit of standing. Pub. Patent Found. v. McNeil-PPC, Inc., No. 09-05471 (U.S. Dist. Ct., S.D.N.Y., filed November 11, 2011).  

The defendant apparently argued that the foundation does not meet the retroactive standing requirement adopted for false-marking claims by the recently enacted patent-reform law.

According to the foundation’s memorandum of law opposing the defendant’s motion for judgment on the pleadings, the foundation “exists to represent the public interest in the patent system. [It] filed this case in June 2009 against defendant McNeil for falsely marking its Tylenol products as patented because [the foundation] believes the public interest is significantly harmed by such false patent marking. [The foundation] was deliberately induced to file this suit because Congress long ago included in the false marking statute a qui tam provision incentivizing private parties like [the foundation] to pursue violators on behalf of the Government.”

The foundation agrees that the AIA changes, “if applied to this case,” would divest the foundation of standing, but argues that “the attempted retroactive application of those changes violates the Due Process Clause of the Fifth Amendment to the Constitution by depriving [the foundation] of its property right in this matter without any legitimate legislative purpose.” To bolster its challenge, the foundation alleges that several congressional representatives stated during debate that, while the false-marking provisions advanced the bill’s broader patent reform goals, “there is absolutely no reason for Congress to interfere in these claims which are before the courts.”

The foundation contends that the “only honest explanation” for “the retroactive elimination of qui tam false marking suits is that it was the result of lobbying efforts by corporations like McNeil who wished to deliberately eliminate the rights of private parties like [the foundation] to continue to pursue pending” false-marking lawsuits. Characterizing the patent reform law’s targeting “of those who were deliberately induced to file false marking suits” as an “expressly improper purpose” under the case law, the foundation also states, “any potential ‘public good’ argument that McNeil or the United States might proffer for the retroactivity would surely be pretextual, further indicating its impropriety.”

Referring to remarks by Senator Jon Kyl (R-Ariz.), who alone spoke in favor of retroactivity, the foundation concludes, “Senator Kyl’s statement makes it clear that qui tam plaintiffs like [the foundation] were an ‘unpopular group’ and the retroactivity was intended to get ‘retribution against’ them. This is an illegitimate purpose, even under McNeil’s precedent.” Senator Kyl had noted that a Federal Circuit ruling appeared “to have created a surge in false-marking qui tam litigation,” which surge would be addressed by making the false-marking law’s revision retroactive.