If you are proud of your patented products, and you want to protect your rights against competitors and knockoffs, marking your products or packaging with applicable patent numbers is a wise business decision. Recently, however, a seldom used section of patent law has come into vogue to catch patent holders whose patent rights have expired or who over-mark their products with inapplicable patents.
Under 35 U.S.C. § 292(a), whoever (1) marks any unpatented article or article not covered by a pending patent application with the word "patent," "patentee," "patent applied for," "patent pending," or any word or number indicating that the article is patented or covered by a pending application, (2) for the purpose of deceiving the public, shall be fined not more than $500 for every such offense.
On December 28, 2009, the U.S. Court of Appeals for the Federal Circuit held that federal courts are required to penalize those who falsely mark unpatented articles on a per article basis—and not on a per decision basis. Forest Group, Inc. v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009). Prior to the Forest Group decision, many federal courts had imposed the statutory fine for each instance where the decision was made to mark unpatented goods, often on a one-time basis and regardless of the number of actual units that had been falsely marked. In Forest Group, the plaintiff (Forest Group) brought a patent infringement action against defendant (Bon Tool), who was a competitor. Bon Tool argued successfully that Forest Group's own mechanical stilts used in the construction industry were marked with the asserted patent, but were not actually covered by Forest Group's patent. Agreeing with the defendant, the district court only fined Forest Group a single $500 penalty, regardless of the actual volume of falsely marked articles that were sold by Bon Tool. The appellate court reversed.
In addressing Forest's argument that such a holding would encourage "a new cottage industry" of false marking litigation—that is, suits by persons or entities suing alleged false markers to get the statutory remedy—the Federal Circuit blessed such qui tam actions, reasoning that "the false marking statute explicitly permits qui tam actions" and that "[p]enalizing false marking on a per decision basis would not provide sufficient financial motivation for plaintiffs…to bring suit." 590 F.3d 1303-04. Because the statute underlying the Federal Circuit's decision allows for any person to sue for the $500-per-article penalty, some commentators have expressed concern that there will be an explosion in suits filed by private persons against alleged false markers—solely to get the statutory remedy. Following the decision in Forest Group, there have already been dozens of independent, follow-on false-marking suits against companies such as Proctor & Gamble, S.C. Johnson, Hallmark, Crayola and Adobe.