Not marking a patented product with the patent number can prevent you from recovering damages from infringing products sold over a period of time. On the other hand, false marking or marking with an expired patent number can result in a fine of up to $500 per product sold. Hundreds of false marking suits have been filed over the last year. Should you mark or not mark at all?
If patented articles are not marked with the patent number, the patent owner can only recover damages starting from the date that the infringer is notified of the infringement, as stated in 35 USC 287. The marking of the patented article constitutes notice. The effect of the marking is to increase the infringement damages. For example, in Funai Electric v. Daewoo Electronics, the difference between the time at which infringement is considered to have started based on marking and the time at which written notice of infringement was given is about six months. Depending on the volume of the infringing product that was sold, the difference can be significant in terms of the monetary value of the damages.
However, the patent statute also has a provision for punishing those who affix “false markings” to their product, as stated in 35 USC 292, also known as the “false markings statute.” The “false markings statute” has been on the books for some time; however, the tsunami of false marking cases started in December 2009, when the CAFC, in Forest Group v. Bon Tool Co., held that the interpretation of the statute required that the penalty be applied for each falsely marked article. Consequently, if you are manufacturing paper cups and each cup is falsely marked, you will be assessed a penalty of up to $500 per cup. Clearly these penalties can quickly add up.
There are a number of conditions to consider in a “false marking case.” To be guilty of false marking, a party must have marked an unpatented article and must have done so with the intent to deceive the public. As the CAFC stated in Pequignot v. Solo Cup, marking the product with an expired patent number is false marking. The statute allows any person to sue for the penalty and obtain half, with the other half going to the US government. The fact that any person has standing to sue was emphasized in the CAFC decision in Stauffer v. Brooks Brothers. Although the complaint must have enough details to at least establish a presumed intent, not doing so results in a dismissal without prejudice and the person suing for the penalty may try again with an amended complaint.
However the deck is not totally stacked in favor of the party suing for the penalty. Pequignot v. Solo Cup provides an example of a case where the party accused of false marking was able to show that they had falsely marked without intent to deceive. Every case is different and requires a different approach to prove lack of intent. Careful planning and other actions before a suit is filed can go a long way towards proving lack of intent.
Companies can take the approach that they will continue to mark in order to increase the possible infringement damages and deter infringers. If they continue to mark, companies have to pay attention to the possibility of false marking and can establish a program to ensure that, if false marking occurs, the lack of intent can be proven.