Patent Markings

Defendants Continue Winning Battles on What Constitutes "False Marking"

noreply@blogger.com (Jim Lennon) — Tue, 19 Apr 2011 14:03:00 +0000

Last week two district courts added clarity on what constitutes false patent marking in violation of 35 U.S.C. § 292.

It is Permissible to Mark Method Patents on Products:

The U.S. District Court for the Northern District of California dismissed a recent claim, ruling that producers could mark method patents on products without necessarily violating the statute. San Francisco Technology Inc. v. Elkay Plastics Company, Inc., 3-11-cv-00291 (CAND April 15, 2011, Order) (Alsup, J.).

Instruction Manuals and Website Markings NOT Covered by Statute:

The U.S. District Court for the Eastern District of Pennsylvania granted summary judgment to the defendant, Timex, ruling that their patent markings in instruction manuals were not covered by the statute because they were not themselves “unpatented articles” nor were they “affixed to unpatented articles”. Hollander v. Timex Group USA, Inc., 2-10-cv-00429, pp. 7-8 (PAED April 13, 2011, Order) (Schiller, J.). The court further ruled that their manuals and the “Terms of Use” sections of their website were not “use[s] in advertising” as contemplated by the statute. Id. at pp. 8-11. Finally the court ruled that Hollander, the qui tam relator, had “failed to introduce evidence that Timex acted with the requisite intent to trigger liability under § 292.” Id. at pp. 11-19.

Pace of False Marking Suit Filings in Rapid Decline?

noreply@blogger.com (Jim Lennon) — Tue, 22 Mar 2011 17:54:00 +0000

The following article suggest the rapid pace of filings of false marking suits is slowing in the wake of the Federal Circuit's decision in In Re BP Lubricants, Misc. Docket No. 960 (Fed. Cir. Mar. 15, 2011)(2011 WL 873147) to apply Rule 9(b) to these pleadings:

http://westlawnews.thomson.com/National_Litigation/News/2011/03_-_March/False-marking_suits_slow_after_Federal_Circuit_ruling/ ("Since March 16, the day after the ruling, only one new false-marking suit has been filed, according to an analysis of court filings on Westlaw, down from several cases a day before the ruling.")

Federal Circuit Requires Patent False Marking Be Pled With Particularity: In Re BP Lubricants

noreply@blogger.com (Jim Lennon) — Tue, 15 Mar 2011 19:25:00 +0000

The Federal Circuit today issued its long awaited decision in In Re BP Lubricants, Misc. Docket No. 960 (Fed. Cir. Mar. 15, 2011)(2011 WL 873147). As expected, the court agreed with mandamus petitioner BP Lubricants and amicus curiae, the United States Department of Justice, that a heightened pleading standard under Rule 9(b) applies to False Marking claims under 35 U.S.C. §292. In an introductory summary the court explained that "a complaint alleging false marking is insufficient when it only asserts conclusory allegations that a defendant is a 'sophisticated company' and 'knew or should have known' that the patent expired. " In Re BP Lubricants, Misc. Docket No. 960, at 2.

The decision should have a major impact on a significant number of false marking suits. For example, the Eastern District of Texas had refused to apply Rule 9(b) when considering motions to dismiss the hundreds of false marking cases now pending in that venue.

Stay tune for more as 2011 shapes up to be the year of the demise of the patent marking troll.

Judge Reaffirms Ruling That False Patent Marking Statute Is Unconstitutional

noreply@blogger.com (Bill Ragland) — Tue, 15 Mar 2011 15:39:00 +0000

On March 14, 2011, Judge Dan Aaron Ploster of the Northern District of Ohio reaffirmed his February 23, 2011 ruling that the false patent marking statute is unconstitutional. The U.S. Department of Justice had asked the court to reconsider its prior ruling and sought to intervene in the in the qui tam case filed by Unique Product Solutions against Hy-Grade Valve.

While the government was allowed to intervene, the court again rejected the government's argument that the "Take Care" provision of Article II of the Constitution does not render the false marking statute unconstitutional. The government urged that the statute is civil in nature and therefore the "Take Care" requirement is inapplicable to the statute. Judge Polster concluded that it makes no difference whether the statute is civil or criminal because the "Take Care" provision is applicable to both criminal and civil statutes. The mere fact that the government can intervene in a qui tam false marking case is insufficent control of the case by the government to satisfy the Article II "Take Care" requirement, he said.

Unique Product Solutions had already appealed the court's February 23 determination that the statute is unconstitutional.

A copy of Judge Polster's March 14, 2011 order may be found here.

U.S. Chamber of Commerce Joins in Asking Federal Circuit to Declare False Marking Statute Unconstitutional Under the Take Care Clause

noreply@blogger.com (Jim Lennon) — Mon, 07 Mar 2011 14:11:00 +0000

On Tuesday, March 1, 2011, the United States Chamber of Commerce filed a brief as amicus curiea in FLFMC. LLC v. Wham-O, Inc. (Appeal No. 2011-1067) asking the Federal Circuit to declare the False Marking Statute (35 U.S.C. § 292) unconstitutional under the Take Care Clause. The Chamber brief is similar to the amicus brief of the Cato Institute filed in the Wham-O appeal the previous week . A copy of the Chamber's brief is available here: BRIEF OF AMICUS CURIAE CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA IN SUPPORT OF DEFENDANT-APPELLEE AND AFFIRMANCE.

A copy of Wham-O's brief is available here: BRIEF OF DEFENDANT-APPELLEE WHAM-O, INC.

Is the False Marking Troll's Demise Imminent? Senate is Poised to Pass Patent Reform Legislation "in the Coming Days"

noreply@blogger.com (Jim Lennon) — Thu, 03 Mar 2011 18:20:00 +0000

Shortly after noon today the Senate voted to reject a proposal by Senator Feinstein that would have stripped the first-inventor-to-file provisions from the patent reform bill, now dubbed the "Leahy-Hatch-Grassley America Invents Act."

Among many other changes, the comprehensive reform package will moot the vast majority of currently pending false marking suits because they are brought by plaintiffs who will be ineligible to enforce the new law, i.e., non-competitors (dubbed "trolls" by the Federal Circuit).

The Senate appears likely to pass the measures shortly.

CNBC characterized the status of the bill as follows: "The Senate has rejected a challenge to the key component of legislation to overhaul the patent system, paving the way for passage in the coming days." http://www.cnbc.com/id/41890588 (emphasis added).

Stay tuned!

Momentum Builds to Stem the False Marking Wave: Cato Amicus on Unconstitionality and Legislative Reform

noreply@blogger.com (Jim Lennon) — Wed, 02 Mar 2011 14:03:00 +0000

The status of the False Marking Statute (35 U.S.C. § 292) is increasingly uncertain, both constitutionally and legislatively.

Constitutionality Questioned

Two days after Judge Polster of the Northern District of Ohio declared the False Marking Statute unconstitutional, the Cato Institute filed an amicus brief to the Federal Circuit asking that court to find the Statute unconstitutional.

As explained in our last blog, Judge Polster found that the Statute violated the Take Care Clause of the United States Constitution because the Statute provides insufficient government control over enforcement. Unique Product Solutions Ltd. v. Hy-Grade Valve Inc., 10-CV-01912 (ND OH Memorandum Order Feb. 23, 2011). The Cato Institute agrees. In its amicus brief to the Federal Circuit, filed on February 25th, the Cato Institute applied similar reasoning to show the unconstitutionality of the Statute, particularly as compared to well structured qui tam statutes like the False Claims ACt (31 U.S.C. §§ 3729-3733) which impart significant government controls over private relator enforcement. U.S. ex rel. FLFMC, LLC v. Wham-O, Inc., Fed. Cir. No. 2011-1067, Brief for The Cato Institute and Walter Olson as Amici Curiae in Support of Defendant-Appellee and Affirmance (Feb. 25, 2011).

Legislative Reform Moves Forward

Meanwhile, a revision to the False Marking Statute limiting enforcement rights to parties suffering a competitive injury remains on track as part of a package formerly known as the "Patent Reform Act". The reform package (Senate Bill S. 23), recently renamed the "Leahy-Hatch-Grassley America Invents Act", was unanimously approved by the Senate Judiciary Committee on February 3rd. While various alterations to the overhaul legislation have been proposed, the competitive injury fix to the False Marking Statute is unchallenged. A Senate vote on the package could occur within the next few weeks.

False Marking Statute Declared Unconstitutional by Northern District of Ohio

noreply@blogger.com (Jim Lennon) — Thu, 24 Feb 2011 12:23:00 +0000

While there have been several constitutional challenges to the False Marking Statute (35 U.S.C. § 292) under the Take Care Clause, yesterday's decision from the Northern District of Ohio appears to be the first dismissal. See Unique Product Solutions Ltd. v. Hy-Grade Valve Inc., 10-CV-01912 (ND OH Memorandum Order Feb. 23, 2011).

The court held as follows: "Applying the Morrison “sufficient control” analysis to the False Marking statute, it is clear the government lacks sufficient control to enable the President to “take Care that the Laws be faithfully executed.”" Id. at 12-13. The court applied the standard set forth by the Supreme Court in Morrison v. Olson, 487 U.S. 654 (1988), as interpreted by the Sixth Circuit in United States ex rel. Taxpayers Against Fraud v. General Electric Co., 41 F.3d 1032 (6th Cir. 1994).

The decision will surely encourage more Take Care Clause challenges going forward and may influence other district courts to follow suit. And the question is finally ripe for the Federal Circuit to address once and for all.

US Will Intervene In Another Take Care Challenge

noreply@blogger.com (Jim Lennon) — Wed, 26 Jan 2011 13:06:00 +0000

The United States District Court for the Western District of Pennsylvania, yesterday, granted the Department of Justice's request to intervene in the matter of USA ex rel Alchemy Asset Services Inc. v. GlaxoSmithKline LLC et al., Civ. No. 10-680. See Order, entered January 25, 2011. One day prior, the Department of Justice filed a Notice of Intervention, "respectfully request[ing] that this Court permit the United States to intervene to address the question of the [False Marking] [S]tatute’s constitutionality pursuant to 28 U.S.C. § 2403." GSK moved to dismiss a complaint alleging its "Fiber Choice" product was falsely marked with an expired patent. GSK's motion alleged that the factual allegations were insufficient under Rule 12(b)(6) and that the False Marking Statute violates the Take Care Clause of Article II of the Constitution. In November, a magistrate judge recommended dismissal under Rule 12(b)(6) because the complaint failed to meet the heightened pleadings requirements of Rule 9(b) with respect to the "intent to deceive" prong of the claim. The magistrate did not address the constitutional challenge. Later in November the United States was granted an extension of time to decide whether to intervene regarding the constitutional challenge. Yesterday's order, granting the intervention request, sets the United States' response deadline for this Friday, January 28, 2011.

Representative Latta's Amendment to Change False Marking Statute Reintroduced

noreply@blogger.com (Jim Lennon) — Fri, 21 Jan 2011 13:17:00 +0000

U.S. Congressman Robert Latta of Ohio has reintroduced his bill to amend the False Patent Marking Statute. See http://www.patentdocs.org/2011/01/rep-latta-reintroduces-false-marking-bill-in-the-house.html The Latta Amendment proposes to limit enforcement rights only to "[a] person who has suffered a competitive injury as a result of a violation of [the statute]" and to cap the total available recovery to "not more than $500 in damages ...." Id.

The former proposal is generally more popular than Latta's latter. An amendment proposal approved by the Senate Judiciary Committee in 2010 was solely directed to limiting enforcement rights to competitors.

I recently spoke with newly elected Senator Chris Coons of Delaware about the latest proposed amendments to the False Patent Marking Statute. He indicated that the "competitive injury" limitation may be acceptable but the $500 total cap on damages would not. Senator Coons also acknowledged that amending the False Patent Marking Statute may have become a pawn in the larger political battle over the Patent Reform Legislation.

The Troll Busters® Irony: from "buster" to "troll"

noreply@blogger.com (Jim Lennon) — Tue, 18 Jan 2011 14:44:00 +0000

Troll Busters® LLC filed suit last week against a dozen biotech companies alleging that each falsely marked expired patents on their "Taq products and probes to practice polymerase chain reaction ("PCR") and real time PCR." Troll Busters, LLC v. Roche Diagnostics GMBH et al, 3-11-cv-00056 (S.D. CA), p. 10.

Troll Busters® describes itself as an entity that "invalidates patents ... being asserted by patent trolls ... [who] tend to obtain over-broad and largely invalid patent claims and then try to charge a toll to entire industries or even try to charge royalties for even the act of conducting research." See http://www.troll-busters.com/whatDoWeDo.html. Troll Busters® is therefore not an entity that actually competes with other companies to provide a better product or service to the market. Instead, they characterize themselves as "assassins" who work for the greater good of defeating patent trolls. Id.

The irony is that such non-competitor, qui tam relator-plaintiffs are themselves considered "marking trolls". See, e.g., Forest Group, Inc. v. Bon Tool Co., 590 F.3d 1295, 1303 (Fed. Cir. 2009) ("Commentators have discussed a surge of such actions in recent years, noting the possible rise of “marking trolls” who bring litigation purely for personal gain.") (citing Donald W. Rupert, Trolling for Dollars: A New Threat to Patent Owners, 21 No. 3 Intell. Prop. & Tech. L.J. 1 (2009); and A. Justin Poplin, Avoiding False Patent Marking Claims, Law 360, October 9, 2009, http:// www. law 360. com/ articles/ 116798). And while the Department of Justice urges the Federal Circuit to adopt a higher pleading standard for false marking claims to stem the tide of nuisance troll litigation, Troll Busters® fails to plead the facts to demonstrate that its cause is anything but profiteering through patent loopholes, which it purports to condemn.

Regardless of its name or motives, Troll Busters® must address this dilemma for the licensee defendants named in its suit: how can a patent licensee who is required by license to mark the listed patents be presumed to have marked those patents for the purpose of deceiving the public? The Middle District of North Carolina touched on this issue and also found plaintiff's implication of deceit troubling where the licensee marks because of a legal obligation. The N.C. Farmers' Assistance Fund, Inc. v. Monsanto Co., --- F.Supp.2d ----, 2010 WL 3817349, *10 (M.D.N.C. 2010) ("... each of the remaining Defendants are alleged to be licensees who are required by contract to mark their soybean seed bags with the ′605 Patent number. (Doc. 1 ¶ 20.) The complaint fails to allege any facts demonstrating how it is plausible that such licensees, who are bound by contract, would have marked their product with an intent to deceive.").

When Does a Rule 68 "Offer of Judgment" Makes Sense in a False Patent Marking Case?

noreply@blogger.com (Jim Lennon) — Thu, 13 Jan 2011 14:34:00 +0000

Offers of judgment under Rule 68 of the Federal Rules of Civil Procedure are rarely used, according to Professor Eaton of Mercer University School of Law, who describes the Rule as not providing "enough of a carrot or stick to move the parties to the prompt resolution of their dispute." Thomas A. Eaton, Rule 68 Offers of Judgment, ADVOCATE, Spring/Summer 2007, at 4. Essentially, "costs" are viewed as too insignificant to warrant making an offer under the Rule.

In essence Rule 68 allows a defendant to make an offer of judgment at any point earlier than 10 days before trial. If the plaintiff/offeree does not accept the offer and obtains a judgment that is not "more favorable" than the offer, the plaintiff/offeree must pay the defendant/offeror's costs incurred after the offer was made. In Marek v. Chesny, 473 U.S. 1 (1985), the Supreme Court construed "costs" to include the attorney's fees the plaintiff/offeree might otherwise be entitled to as part of the judgment. This interpretation has little impact on most federal civil litigation where there is no statutory basis for an award of attorney's fees.

A statutory basis for attorney's fees does exist, for "exceptional cases", in the Patent Statutes. See 35 U.S.C. § 285. These awards generally require a finding of "inequitable conduct" in the procurement of a patent or a pattern of litigation misconduct.

Many False Patent Marking complaints under 35 U.S.C. § 292 seek an award of the plaintiff/qui tam relator's attorney's fees as part of the requested relief, some explicitly referencing 35 U.S.C. § 285. Most False Marking defendants rightfully discount the threat of such an award when assessing their case. In fact no reported decisions could be found, in our research, showing an award of attorney's fees to a False Marking relator. Nonetheless, the threat may exist in certain circumstances. For example, late last week in U.S. Rubber Recycling, Inc. v. Encore International Inc., et. al., 2-09-cv-09516 (CACD January 7, 2011, Order), the Central District of California expressly retained jurisdiction to potentially award attorney's fees. The court dismissed a declaratory judgment of patent invalidity and unenforceability in light of the patentee's covenants not to sue on the patents at issue. But the court refused to dismiss plaintiff's claim for attorney's fees under 35 U.S.C. § 285, finding that "it would be premature and inappropriate for the Court to hold that Plaintiff, as a matter of law, cannot be a 'prevailing' party [under § 285] for its claim of false patent marking[.]" Id. at 12.

Transfers: a common trend in false marking actions

noreply@blogger.com (Jim Lennon) — Tue, 11 Jan 2011 14:33:00 +0000

The District of Delaware is one of the latest courts to grant a false marking defendant's request for transfer. In Brinkmeier, et al., v Exergen, Civ. No. 10-176-SLR, the court granted defendant's request to transfer the action to the District of Massachusetts where an action involving the same patents is pending, "although it is not a related first-filed action." Id. at 6. The court was further persuaded by the fact that "Exergen is not a Delaware corporation and that Delaware represents a very small market for Exergen's products." Id. While the court was not persuaded by Exergen's arguments regarding the inconvenience of litigating in Delaware, particularly "given electronic discovery, electronic means for recording depositions, and the fact that trials go forward in less than 20% of all cases," the court found, "[nevertheless ... [that] Massachusetts is the more appropriate trial forum for this case." Id.

The following are just some of the recently reported decisions transferring false marking actions pursuant to 28 USC 1404(a): U.S. ex rel. Heathcote Holdings Corp., Inc. v. Leapfrog Enterprises, Inc., Civ. No. 10-C-1471, (N.D.Ill., December 27, 2010); Seely v. Cumberland Packing Corp., Civ. No. 10-CV-02019-LHK (N.D.Cal., December 20, 2010); Just Intellectuals, PLLC v. Clorox Co., Civ. No. 10-12415 (E.D.Mich., December 10, 2010); Hollander v. Hospira, Inc., Civ. No. 2:10-CV-00235-JD (E.D.Pa., November 22, 2010); Simonian v. Monster Cable Products, Inc., Civ. No. 10-C-1269 (N.D.Ill., November 22, 2010); Clip Ventures LLC v. U-Dig-It Enterprises, Inc., Civ. No. C-10-3227 CRB (N.D.Cal., October 25, 2010); U.S. v. T.F.H. Publications, Inc., Civ. No. 2:10CV437 (W.D.Pa., October 20, 2010); Lightspeed Aviation, Inc. v. Bose Corp., Civ. No. 10-CV-239-BR (D.Or., October 01, 2010); Unique Product Solutions, Ltd. v. Otis Products, Inc., Civ. No. 5:10CV1471 (N.D.Ohio, September 22, 2010).

In addition, although no written opinions have yet issued, several transfers have been orally granted in the Eastern District of Texas as described by Michael Smith here: http://mcsmith.blogs.com/eastern_district_of_texas/2011/01/tyler-false-marking-cases-heard-at-scheduling-conferences.html ("the five cases in which defendants sought transfer were transferred ... .").

DOJ Defends the Constitutionality of 35 USC § 292 Under the "Take Care" Clause

noreply@blogger.com (Jim Lennon) — Fri, 07 Jan 2011 14:33:00 +0000

The Department of Justice recently filed a brief in the Eastern District of Texas defending against a Constitutional challenge to the False Marking Statute (35 USC § 292) under the "Take Care" Clause of the Constitution. See BRIEF OF THE UNITED STATES DEFENDING THE CONSTITUTIONALITY OF 35 U.S.C. § 292, Promote Innovation LLC v. Medtronic, Inc., 10-cv-00233-TJW-CE (EDTX, filed 12-1-10) (attached), p. 11.

While the Federal Circuit is expected to rule shortly on BP Lubricants' mandamus petition on the standard for pleading the intent prong of a false patent marking claim, this next challenge is looming. Wham-O signalled it will be the first to raise the "Take Care" challenge to the Federal Circuit in the appeal by FLFMC of its dismissed false marking suit, but the court below only reached the Constitutional question of standing under Article III. While it may not occur in the FLFMC appeal, the merits of the "Take Care" challenge will eventually be addressed by the Federal Circuit because so many false marking defendants are now raising it.

The "Take Care" Clause simply says that the President "shall take Care that the Laws be faithfully executed[.]" U.S. CONST. art. II, § 3. While some have argued in the past that qui tam schemes in general violate this clause because of the abdication of statutory enforcement authority, many current challenges focus on the details of the False Marking Statute. In contrast to other qui tam statutes, like the Federal False Claims Act (31 U.S.C. § 3729–3733), the False Marking Statute fails to provides the Executive with any authority over a qui tam relator's false marking action. In its brief, the DOJ admitted that the United States lacks the authority to "to intervene in or terminate a qui tam suit" in situations where it wishes to resume control of enforcement, but argued that this was not an issue in the present case. Thus, it argued, the question was not ripe for Constitutional challenge.

The DOJ is attempting to walk a fine line here. Just a few months earlier, in supporting the mandamus petition of BP Lubricants, it argued that it had "a substantial interest in the interpretation of qui tam statutes," and that "any interpretation of the False Marking Statute ...
is of significant interest to the United States." RESPONSE OF THE UNITED STATES AS AMICUS CURIAE IN SUPPORT OF PETITIONER, In Re BP Lubricants USA Inc., No. 2010-960 (Fed. Cir., filed Oct. 20, 2010), pp. 2-3. While a distinction can be drawn between enforcement and interpretation of the statute, the line is thin when we talk about the DOJ having a "substantial interest" in "any interpretation," yet lacking any control over individual enforcement actions. It will be interesting to see how these views are reconciled and how the DOJ's position evolves in the face of judicial scrutiny.

Another Late Season Christmas Gift to False Marking Plaintiffs?

noreply@blogger.com (Jim Lennon) — Thu, 23 Dec 2010 14:16:00 +0000

It was the end of December 2009 when the Federal Circuit issued its decision in The Forest Group Inc. v. Bon Tool Company, 590 F.3d 1295 (Fed. Cir 2009), wherein the Court addressed the following prescient point:

Forest argues that interpreting the fine of § 292 to apply on a per article basis would encourage “a new cottage industry” of false marking litigation by plaintiffs who have not suffered any direct harm. This, however, is what the clear language of the statute allows.

As if the Federal Circuit's decision alone was not enough to encourage the "new cottage industry," on remand, the Southern District of Texas set the per article amount of the damages award at "the highest point of the price range" ($180) for the falsely marked article (a spring-loaded stilt used in the construction industry). The per article amount is viewed as an anomaly because there were only 38 articles at issue, making the total fine $6840.

Another late season holiday gift has been given to false marking plaintiffs (qui tam relators). The Northern District of Georgia granted a default judgment award in a false marking case involving Christmas tree stands, Polytree (Hong Kong) Co., Ltd., et. al. v. Forests Manufacturing, Ltd., 1-09-cv-03377 (GAND December 20, 2010, Order). The Northern District of Georgia cited to the District Court decision in Forest Group to support its determination of an award based on the middle price point of the falsely marked articles ($84.75). Ironically, the false marking award is nearly 30x greater ($2,339,100) than the infringement damages award ($79,200) granted to Polytree in the same case. While the false marking award is striking (especially when compared to the infringement award), this case is probably another anomaly. It was a default judgment against a competitor/counterfeiter that, in addition to copying the stand design, copied the plaintiffs' patent numbers and implicitly admitted this after an exchange of cease-and-desist letters by Polytree. The case was also unusual because it involved a violation under the first clause of the False Marking Statute (35 U.S.C. § 292), which the Court referred to as "patent mismarking," for claiming specific patent coverage without the consent of the patentee.

Regardless of the distinctions, expect even non-competitor false marking relators to raise Polytree in addition to Forest Group if they ever make it to the damages phase of a false marking case.

Happy Holidays!

Texas Split on Applicability of Rule 9(b) to False Marking Pleadings

noreply@blogger.com (Jim Lennon) — Fri, 17 Dec 2010 20:04:00 +0000

Yesterday's Opinion and Order from the Northern District of Texas (Patent Compliance Group v Wright Medical) applies the heightened pleading requirement of Rule 9(b) to false marking claims, in stark contrast to the current position of the Eastern District of Texas, refusing to apply Rule 9(b) to false marking claims. NDTX was somewhat persuaded by the explicit remand language of the Federal Circuit in the Stauffer case and the several district courts that have lined up in favor of the higher pleading standard.

In other interesting false marking news out of Texas, Judges Ward and Everingham of the Eastern District recently granted (orally) two transfer requests by false marking defendants under 1404, leading several other defendants to file transfer motions. While it may be difficult to win dismissal of a false marking claim in EDTX currently, many of these recently filed actions may be ripe for transfer. Michael Smith of Siebman Reynolds put it this way in his blog (http://mcsmith.blogs.com/eastern_district_of_texas/2010/11/false-marking-cases-in-marshall-routine-cases-and-wrinkles.html): “as for now, plaintiffs are 0-2 on venue rulings, with two pending, one being briefed, and four more being drafted as a result of the courts' granting of the two.”

The United States Amicus in BP Lubricants May Be the Game Changer

noreply@blogger.com (Jim Lennon) — Tue, 14 Dec 2010 14:15:00 +0000

It has been nearly two months (October 20th) since the United States filed its amicus brief , supporting the petition of false marking defendant, BP Lubricants, to obtain a writ of mandamus compelling dismissal of the suit filed by Thomas Simonian in the North District of Illinois.

Filings at the Federal Circuit are not available through their PACER site, therefore, many litigants and courts may be unaware of this significant development. The brief is significant because, despite being procedurally and financially aligned with false marking plaintiff's as qui tam relators on behalf of the government, the United States sided with the false marking defendant in its amicus brief. Through its brief the United States effectively acknowledges that the trend of suits under 35 USC 292 has gone too far, with scores of inadaquately pled false marking claims dominating the landscape since the Federal Circuit’s decision in Forest Group v. Bon Tool, at the end of last year.

While the United States offered tangential support to qui tam relators in other false marking litigation earlier this year (e.g., supporting Stauffer's attempt to reverse the dismissal of his suit against Brooks Brothers on the question of standing and supporting similar opposition in San Francisco Technologies v Adobe, et al., in the Northern District of California), it has line up squarely against the plaintiff, Thomas Simonian, in this matter. “The position of the United States is that, consistent with other cases "sounding in fraud," False Marking cases should be subject to the pleading requirements of Rule 9(b).” The United States goes on to explain that while intent to deceive may be averred generally, pleadings must still “allege sufficient underlying facts from which a court may reasonably infer that a party acted with the requisite state of mind." In this vein, the United States rejects the attempt by Simonian to obtain the inference by merely pleading that a defendant is a "sophisticated company" which "knows, or should know" the patent at issue were expired. It argues that these types of allegations are insufficient to satisfy Rule 9(b)'s pleading standard, even if relaxed.

After initial skepticism about whether BP Lubricants' mandamus petition would be substantively addressed by the Federal Circuit, the amicus of the United States leads to an expected ruling on the merits of the pleading question. In fact, since the filing of the amicus, at least two district courts have stayed false marking actions pending the outcome of In Re BP Lubricants (e.g., San Francisco Tech. Inc. v. Graphic Packaging Int't, No. 1:10-cv-1195 (N.D. Ga. Nov. 10, 2010), D.I. 229; NEWT LLC v. Nestle USA, Inc., No. 1:09-cv-04792 (N.D. Ill. Nov. 1, 2010), D.I. 56) and the District of Delaware openly pondered the question during oral argument last week (see last post).

Oral Argument in Brinkmeier v Graco

noreply@blogger.com (Jim Lennon) — Thu, 09 Dec 2010 19:24:00 +0000

Oral argument was held today in the matter of Brinkmeier v Graco, a case that holds significant weight for its original dismissal of false marking claims for insufficient pleading under Rule 12(b)(6). That dismissal decision has been relied upon by several district courts and the Department of Justice, in a recent amicus brief, as a guide post for measuring the sufficiency of false patent marking allegations.

The original dismissal tossed the majority of Brinkmeier's false marking claims but allowed one claim based on the fact that the patent at issue had been the subject of prior litigation by Graco. The additional allegations of Brinkmeier's Second Amended Complaint were at issue today. During argument the Court questioned whether the false marking statute allows for claims based on allegations of what a defendant "should have known" about the scope and expiration of its patents, rather than what is actually known.

The parties appeared to concede that the heightened pleadings standard of Rule 9(b) does apply to false marking allegations. The parties differed over whether Brinkmeier's allegations were sufficient to allow for the reasonable inference of not only knowledge of falsity, but Graco's intent to deceive.

Among other things, Graco pointed to the fact that its markings included conditional language (e.g., "may be covered by one or more of the following patents ...") which, Graco says, negates not only intent but the allegation that the marking was even "false". Graco pointed out that Brinkmeier never asserted that the conditional statement itself was inaccurate. Instead Brinkmeier focused on case law suggesting that conditional language does not excuse a marking that otherwise lists inapplicable or expired patents.

The Court suggested it might be beneficial to withhold ruling on the sufficiency of the Second Amended Complaint until the Federal Circuit resolves a similar issue in the mandamus petition of In Re BP Lubricants.

The case argued today is Brinkmeier v. Graco Children's Products Inc., Civil Action No. 1:09-cv-00262-LPS.

False Marking Relator, Raymond Stauffer, Goes On Record

noreply@blogger.com (Jim Lennon) — Mon, 06 Dec 2010 21:23:00 +0000

Raymond Stauffer, the qui tam false marking relator that sued Brooks Brothers over their marking of bowties with expired patent numbers, gives his plaintiff perspective on false patent marking here:

http://www.pharmalot.com/2010/12/false-patent-markings-big-fines-ray-stauffer-explains/

We'll leave it to you to weigh the truth/falsity of his suppositions.

Note that Mr. Stauffer recognizes that the Federal Circuit did not remand his case to decided whether the Rule 9(b)'s specificity requirement applies, but "to what degree rule 9b is satisfied." Ironically, while both Mr. Stauffer and the Department of Justice (through their amicus in support of BP Lubricants' mandamus petition to the Federal Circuit) recognize the applicability of Rule 9(b) to false marking claims, district courts continue to split on this important question. The Federal Circuit's decision in In Re BP Lubricants, expected in the coming months, should resolve this split once and for all.

BIC, Womble Carlyle Team, Defeat False Patent Marking Claim in U.S. District Court

noreply@blogger.com (The Womble Carlyle Team) — Fri, 27 Aug 2010 19:14:00 +0000

BIC Corp, represented by Womble Carlyle attorneys Jim Lennon, Bill Ragland and John Morrow has defeated a major false patent marking claim in federal court. The August 25th dismissal is promising news for other companies facing similar false patent marking claims.