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Patents

Though Proper Patent Marking is a Vital IP Strategy, Improper Patent Marking Can be a Costly Exercise


Tuesday, November 02, 2010


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Ensure Proper Patent Marking

Proper patent marking of an apparatus or system is vital to maintaining a solid intellectual property strategy. Without using proper patent marking methods, the public is not made aware of a pending patent application or an issued patent. Such lack of notice to the public may result in a substantial decrease in awarded damages from a patent infringement claim or a missed opportunity to warn third parties that you may soon have the right to stop them from making, using, selling, or importing your patented technology.

A. Patent Pending

The label "patent pending" is commonly found on products. This label has no legal effect, but instead is used to inform the public that a patent application seeking protection of an associated invention is presently pending with the United States Patent and Trademark Office (USPTO). It is intended to inform third parties that if they attempt to make, use, sell, or import the patent pending technology, the owner of the patent application may be able to stop them when the patent application issues. Use of the patent pending label may be enough to stop others if they believe that a final apparatus or system would infringe claims of an issued patent associated with the patent application. After all, why invest time and money into an apparatus or system when it is going to infringe a patent owned by another party.

The "patent pending" label can be used any time after filing of a patent application with the USPTO, although it is advisable to await acknowledgment of filing a patent application from the USPTO prior to marking an apparatus or system with the label "patent pending."

B. Issued Patent Marking

Under Title 35 of the United States Code, Section 287(a) [1], damages awarded for infringing an issued patent are a direct result of whether the owner of the infringed patent properly marked their patented apparatus or system. Section 287(a) claims that in the failure to properly mark an apparatus or system, "no damages shall be recovered by the patentee in any action of infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for the infringement occurring after such notice."

An example of notification to the infringer, which may be relied upon if an apparatus or system was not properly marked, includes a cease and desist letter claiming patent infringement. Alternatively, in the case of proper compliance with patent marking requirements, damages for patent infringement may be calculated from the date that the public was placed on constructive notice that a marked apparatus or system was patented — i.e., from the date that proper patent marking methods were used.

Proper marking of a patented apparatus or system requires fixing on the apparatus or system the word "patent" or the abbreviation "pat.", together with the number of the patent. If it is not possible to mark properly due to the character of the apparatus or system, an associated package holding the apparatus or system may be marked.

Avoid Improper Patent Marking — It Can Be Costly

Under Title 35 of the United States Code, Section 292, also referred to as the False Marking Statute, whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article the word "patent" or any word or number importing the same is patented, for the purpose of deceiving the public; or whoever marks upon, or affixes to, or uses in advertising in connection with any article the words "patent applied for," "patent pending," or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public - shall be fined not more than $500 for every such offense. In addition, the statute allows for any person to sue for the penalty, in which event one-half will go to the party suing and the other to the use of the United States.

A party bringing a claim for violation of the False Marking Statute need only prove that an unpatented article has been marked as patented and that the marking was done with intent to deceive the public. In the event of a party marking an article to show that a patent has been applied for when that is not the case, the claimant must prove that the article was marked to show that a patent was applied for and that the marking was done with intent to deceive the public.

Since the statute allows any party to bring a claim, including those that have not experienced harm from the false marking, lawsuits under the False Marking Statute have become more and more common. With a possible decision of up to $500 for every offense to the False Marking Statute, one thousand falsely marked products could produce a fine of up to $500,000.

Owners of patents, therefore, must be cautious when marking. Specifically:

  1. Products should not be marked as patented until after receiving confirmation from the USPTO of a patent number;
  2. Care should be taken to remove patent marking after patents expire or after abandonment (e.g., from lack of maintenance fee payment, from invalidation, or from any other method);
  3. Products should not be marked as having a patent applied for until after the patent has been filed and a serial number has been received from the USPTO; and
  4. Care should be taken to remove patent applied for marking if patent applications go abandoned or expire prior to allowance.

Due to the severity of the fines and the eagerness of parties to bring lawsuits under the False Marking Statute, as evidenced by the large number of claims filed, bills have been introduced into the House of Representatives to amend Section 292(b) of the Patent Act, 35 U.S.C. ยง292(b), to allow standing in false patent marking lawsuits only if the plaintiff "has suffered a competitive injury, " and to set the penalty for false patent marking as a per-decision fee rather than a per- falsely marked-product fee.

Conclusion

Patents are valuable intangible assets that allow owners to obtain royalties to licenses, cross-license patented technology, and bring a patent infringement claim against a potentially infringing party. Once an issued patent is obtained, it is vital to follow statutorily required patent marking methods to fully benefit from the rights granted by the government. Unfortunately, if proper patent marking methods are not used, damages for patent infringement, due to lack of actual or constructive notice, may be decreased significantly. In addition, care should be taken to ensure that the False Patent Marking Statute is not violated. The alternative can be extremely costly.

Since the procedure for properly marking a patented invention can be difficult to ascertain without an understanding of patent law and recent case law, it is advisable to consult your patent attorney to ensure that proper patent marking methods are followed in a timely manner.


This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice. Your receipt of Good Company or any of its individual articles does not create an attorney-client relationship between you and Sheehan Phinney Bass + Green or the Sheehan Phinney Capitol Group. The opinions expressed in Good Company are those of the authors of the specific articles.