Changes in False Marking Interpretation

In a recent decision, The Forest Group, Inc. v. Bon Tool Company, No. 2009-1044, the Federal Circuit has radically reinterpreted the false marking statute, 35 USC 292. The false marking statute makes it illegal to apply a patent number to a product that is not patented, to use "patent pending" when no application is pending, or to use another's patent number with the intent to decieve the public. A $500 fine is payable for violations. Any person can sue for the penalty, and if successful can keep half the recovery, with the other half going to the government.

Historically, this statute has seen little or any use: who's going to sue for $250? However, the Forest Group decision may change all that. In Forest Group the Federal Circuit held that the $500 fine is payable on a per article basis, not on a per judicial decision basis, as previously. For example, a company that sold 10,000 units of a product with an erroneous patent notice - which could easily happen as old patent numbers were not removed from product labels as they expired - would be liable for $5,000,000.

The statute requires that the fine is only payable if the misleading statement specified were made with the intent to deceive the public. Intent is notoriously difficult to prove per se, but can often be inferred.

There are two action items that should be considered in response to this decision. First, all of one's own product notices, labeling, packaging, websites and the like should be carefully reviewed for complete accuracy. Second, one's competitors' notices and labeling should similarly be reviewed for possible liability.

Feel free to contact me for more information.

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