September 1, 2010Client Alert

The Federal Circuit Holds That False Marking Plaintiff Has Standing to Sue in Stauffer v. Brooks Brothers

On August 31, 2010, the Federal Circuit held in Stauffer v. Brooks Brothers, that a false patent marking plaintiff who did not allege an injury in fact to himself nevertheless has standing to sue. The Federal Circuit reasoned that the false marking statute is a qui tam provision that allows individuals or so-called “relators” to stand in the government’s stead, and to bring the lawsuit to enforce the statute as a partial assignee of the governments’ claim. Even though a relator suffered no injury himself, the qui tam provision operates as a statutory assignment of the United States’ rights which confers standing to the relator to assert the injury in fact suffered by the assignor, in this case the United States. The Federal Circuit noted that by enacting section 292, Congress has defined false marking as leading to an injury in fact to the United States and “determined that such conduct is harmful and should be prohibited.” Thus, in order to have standing, a relator, such as Stauffer, must allege that the United States has suffered an injury in fact causally connected to the conduct of the defendant, such as Brooks Brothers, that is likely to be redressed by the court deciding the lawsuit.

Notably, the Federal Circuit did not consider whether Brooks Brothers’ motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim for relief because it does not allege an intent to deceive the public with sufficient specificity to meet the heightened pleading requirements for claims of fraud required by Rule 9(b), nor did it consider whether the false marking statute was unconstitutional for violation of Article III’s take care clause.

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