Forest Group Spawns a Flurry of False Marking Litigation
March 2010
Kevin X. McGann, Dimitrios T. Drivas
DOWNLOAD PDF: Forest Group Spawns a Flurry of False Marking Litigation
If anyone had any doubts whether the Federal Circuit's December 28, 2009 decision in The Forest Group, Inc. v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009) would lead to a spate of new litigation over false marking, the answer has arrived already.1 A brief search indicates that more than 30 false marking lawsuits were filed so far this year and at least 18 were filed in less than a week in February 2010.
As if the patent field were not challenging enough for manufacturers, on December 28, 2009, the Federal Circuit issued a decision that should give any patent owner that marks its products with patent numbers reason to pause. In Forest Group, the Federal Circuit held "that the plain language of 35 U.S.C. § 292 requires courts to impose penalties for false marking on a per article basis." 590 F.3d at 1304 (emphasis added). In so holding, the Federal Circuit vacated the district court's ruling that imposed a fine of US$500 only on a per decision to mark basis. This decision potentially exposes the patent owner to fines of up to US$500 for each article that is falsely marked, rather than a single US$500 fine for each decision to mark a type of article. Although the Federal Circuit explained that the US$500 fine was a maximum fine per article, and that district courts have wide discretion to award sums as small as fractions of a penny for mass-produced products,2 the potential penalties assessed for false marking a mass-produced article will almost certainly encourage more lawsuits by private parties who get to split the award with the United States.
1 A copy of the case is available on the Federal Circuit website at http://www.cafc.uscourts.gov/opinions/09-1044.pdf.
2 590 F.3d at 1304.
Contacts
Kevin X. McGann
Partner, New York
+ 1 212 819 8312
Dimitrios T. Drivas
Partner and Chair, Global IP Practice
+ 1 212 819 8286
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