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April 22, 2010Client Alert

False Patent Marking Update: Federal Court Calculates the Fine for False Patent Marking and Applies it to Unmarked Products Advertised as being Covered by the Patent

As a follow up to alerts sent in February 2010, in which we noted the recent spike in lawsuits for false patent marking under 35 USC § 292, a recent court decision indicates courts are likely to apply the false patent marking statute on a case-by-case basis by modifying the fine in view of the facts and circumstances surrounding the false patent marking.

In particular, the District Court for the Southern District of California recently issued an order in Presidio Components Inc. v. American Technical Ceramics Corp. providing that the fine for false patent marking of Presidio’s product (capacitors) would be set at about 32 percent of the overall sales price per product sold rather than the maximum statutory fine of $500 per product sold. The Court determined that because the products at issue were mass-produced, the reduced fine was enough to enforce the public policy behind the false patent marking statute without imposing disproportional liability.

The Court further determined that the false marking fine extended to products sold by Presidio that were not themselves falsely marked, but that were advertised as being covered by the patent at issue (U.S. Patent No. 6,816,356). This decision confirms that falsely using a patent number in advertising can qualify as false patent marking under 35 USC § 292.

As previously explained, the increased scrutiny of patent marking stems from the Federal Circuit’s recent decision in Forest Group Inc. v. Bon Tool Co.

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