The Importance of Patent Marking

Monday, June 6, 2011

If you are one of the many who believe that once a commercialized product holds a patent, it is completely protected from any infringement, you need to keep reading.  That’s because a product must be marked with the correct and active patent number to collect on past damages.  Unfortunately and all too often, that is not the case. 

Many companies lose out on the ability to collect on past damages rightfully owed to them because they failed to perform the very simple task of marking their patented products with patent numbers or, more frequently, they go about the process incorrectly.

And now, a new cottage industry of “patent trolls” is out to find your patent marking mistakes.

First, let me give you a quick overview of patent marking:

According to the US Trademark and Patent Office website, “a patentee who makes or sells patented articles or a person who does so for or under the patentee is required to mark the articles with the word “Patent” and the number of the patent. The penalty for failure to mark is that the patentee may not recover damages from an infringer unless the infringer was duly notified of the infringement and continued to infringe after the notice.”

Hundreds of companies have been blindsided with costly patent mismarking litigation claims because one or more of their products was marked with an incorrect or expired patent number.   These claims have exposed companies to potentially enormous damages liability, but they could all have been avoided.

Recent case law has increased the importance of proper marking of products because one found to intentionally mismark may be liable for damages for each incorrectly marked product.   These recent decisions have opened the flood gates of litigation and as a result, we’ve seen the rise of patent trolls, sometimes also referred to as patent pirates – the person or company that enforces its patents against one or more alleged infringers in a manner considered unduly aggressive or opportunistic, often with no intention to manufacture or market the patented invention.  Now the trolls go after companies who fail to remove a patent marking after the patent has expired.

 

The damages for patent mismarking could range from a fraction of a penny to the $500 statutory maximum per product. 

$500 per product may not seem high, but what about if you are the Solo Cup Company, and you are sued for falsely marking 21 billion lids?  That’s a lawsuit worth $10 trillion dollars.

 

SEE THE ISSUE IN ACTION:  

Read about Solo Cup’s dilemma with false patent marking in this recent BNET.com article

               

The critical issue of mismarking is “intent to deceive”.  Patent marking claims are fraud-based. Thus, to prevail, the plaintiff must show that the defendant company mismarked its products with an actual intent to deceive the public.  But again, these possibilities can all be avoided, if you follow these steps right now to minimize the risks of being sued.

 

Minimize Your Risk 

Conduct an audit of all patented products to determine which contain patent markings. Ensure that all expired patents are removed and all other markings are accurate.
Maintain a docketing system so you are aware when a patent is set to expire so all markings can be removed.  We provide this service upon your request.
Upon expiration or a determination of invalidity, remove all patent markings from products.

Do not mark products with a long list of patents that “may” be applicable to the product. Try to be as accurate and succinct as possible with all patent markings.  If you use terminology such as “this product may be covered by one or more of the following patents”, make sure that at least one covers the product.
When products and/or labeling come up for review, be sure to review all patent markings for accuracy. This is also necessary when purchasing or licensing any new products.
 
If in doubt, obtain an opinion letter as to whether the patent indeed covers the product. A thorough opinion letter can be very valuable in any future litigation and could negate any intent to deceive the public.

 

For additional questions on patent marking, contact Matthew W. Stavish mstavish@bw-iplaw.com , one of the intellectual property lawyers at Berenato & White