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Increased Penalties for False Patent Marking Under Recent Federal Circuit Decisions

September 2010

Recent decisions by the Court of Appeals for the Federal Circuit (CAFC) have significantly increased the penalties for manufacturers who are found to have falsely marked a product with a patent notice. False marking occurs when a manufacturer places a patent mark – such as a patent number or patent pending – on a product that is not covered by that patent. This includes marking a product with a previously valid but expired patent.

In a decision in late 2009, the CAFC ruled that the penalty under the false marking statute should not be applied per complaint as in the past, but for each individual product that is found to have been falsely marked. This decision has received a great deal of attention in the media, including articles from Reuters and The Wall Street Journal. To make matters worse, in August 2010, the CAFC confirmed that a charge of false marking can be brought as a qui tam matter. In a qui tam false marking suit, the party who sues does not have to show that they have been injured by the act of false marking, just that there has been a violation of the statute. If the suing party wins the lawsuit, they will split the fine with the federal government.

The recent court decisions have given rise to a number of lawsuits filed by individuals looking for opportunities for financial windfall by filing false marking suits. While the law continues to develop in this area, these suits pose a real threat to many manufacturers. The best defense against this threat is for companies to review their product lines and patent portfolio to make sure that any patent markings on their products are accurate and up-to-date.

Please contact us if you would like our assistance in performing a patent marking audit.

Jeffrey M. Weinick | Member of the Firm | (973) 530-2028 |
Jonathan A. Tyler | Associate | (973) 530-2086 |
Steven M. DiPasquo | Associate | (973) 530-2076 |
Kevin J. Beach | Associate | (973) 530-2158 |
Joseph G. Fenske | Associate | (973) 530-2128 |
Xiaolei Daniel Sun | Associate | (973) 530-2059 |
Brymer H. Chin | Registered Patent Agent | (973) 530-2171 |
David M. Zimmerman | Registered Patent Agent | (973) 530-2083 |