Brinks Hofer attorney here explains the increase in false patent marking lawsuits

Steve Oberholtzer, Managing Partner of the Ann Arbor office of Brinks Hofer Gilson and Lione, observes that recent court interpretations have led to increases in the penalties imposed on organizations who violate the U.S. False Patent Marking Statute (35 U.S.C. §287).

In the past several months, a slew of suits have been brought against many familiar consumer products corporations, including Procter and Gamble, Gillette Company, Glaxosmithkline, Timex, S.C. Johnson, Pfizer, Oreck and CIBA Vision Corporation, alleging incorrect marking of products with expired patent numbers, using inaccurate patent numbers on products or packaging, or making other improper patent claims.

An infraction of this law, which has remained unchanged since its origin in 1952, was interpreted in the past to typically cost an offender $500 for an entire batch of products that was falsely marked.

Current court decisions, however, are penalizing offenders up to $500 for each falsely-marked article being sold, making it an expensive proposition for defendants in these cases.

"What's especially unusual about this patent law is that any member of the public may bring charges against these violators, many of whom are unaware that a patent infraction has been committed.

"If the court levies a fine, half of the money is awarded to the government and the other half goes to the party bringing the action," Oberholtzer notes.

"Because of the unique nature of this law, we are also seeing situations where individuals who don't own any patents are looking for high-volume products where they stand to gain the most money.

"These false marking decisions are putting companies in a difficult position between wanting to mark their products with patent numbers to enhance their recovery of money damages against infringers, and concerns over the cost and inconvenience of a false marking lawsuit."

Oberholtzer offers the following tips:

1. Audit company products to confirm that patents marked on products encompass the products and are not expired.

2. Set a regular schedule for reviewing patent numbers marked on products.

3. Review patent license agreements to make sure they do not expose the licensing company to false marking liability.

4. Consider patents on methods or processes which do not require marking in the first place to preserve rights to recover money damages.

5. Take care to avoid using the "patent pending" label improperly.

Published: Thu, Mar 25, 2010