Statutory false marking, under 35 U.S.C. 292 of the U.S. Patent Act, is the act of marking an article or product to suggest patent protection with an intent to deceive the public when, in fact, no such patent protection exists. Any person may bring a claim for false marking, even if they have not suffered any personal loss, and the patentee is to be fined up to $500 per offence. Any fine resulting from false marking is split between persons bringing the action and the federal government.
Until recently, it was unclear whether the term "per offence" should be interpreted as imposing the statutory fine on a "per article" or "per decision" basis. This ambiguity has now been resolved by the Court of Appeals for the Federal Circuit (CAFC), which ruled that "per offence" must mean "per article".
In Forest Group v. Bon Tool Co., the CAFC took the position that the statute language clearly suggested an intention to impose the fines on a per-article basis. The CAFC also noted that the harms created by false marking (deterring innovation, discouraging new entries into competitive markets, motivating unnecessary design-around expenses, etc.) can occur each time an article is marked, and larger numbers of falsely marked articles made available to the public may exacerbate the problems. In view of modern, mass-produced articles entering the market place, a single fine of $500 was not considered a sufficient penalty to satisfy the intended purpose of the statute.
Some suggest that imposing a per article fine will lead to huge statutory fines and could promote a new breed of litigants, dubbed "marking trolls," to launch a wave of new false marking lawsuits. Interestingly, the CAFC stated that encouraging individuals to bring false marking claims is actually an intended purpose of the current statute. However, it also held that a statutory penalty of up to $500 does not mean that a court must impose a penalty of $500 per article. Instead, the court has the discretion to award a much smaller fine per article (e.g. a fraction of a penny) so that the total fine is proportional to the marking offence. Giving courts the discretion to award a reasonable fine in false marking cases may prove to be an effective way to curtail the impact of aggressive "marking trolls," but only time will tell.
Please click here for a PDF of The Forest Group, Inc. v. Bon Tool Company, [Dec. 28, 2009] CAFC 2009-1044 (Rader, Plager and Moore)