© 2010, Dawsey Co., LPA

August 2010

It is hard to believe, but one company has put the Northern District of Ohio on the map for false patent marking lawsuits, namely a company called Unique Product Solutions.

Since the beginning of 2010 there have been over one hundred false patent marking lawsuits initiated across the country. The false marking suits target companies that sell products marked with a designation to indicate that the product is patented, such as the word “patented” or a patent number, when the product is not patented or the relevant patent has expired. In a case that made it to the Federal Circuit (CAFC) and was remanded to the district court to recalculate the appropriate false marking fine, the district court recently issued an order requiring the false marker to pay a fine that was more than the revenue generated by selling the falsely marked product. Forest Group v. Bon Tool (S.D. Tex 2010). Under 35 USC 292, the fine for false marking is to be “[no] more than $500 for every such offense.” In this case, the evidence showed that 38 pair of falsely marked construction stilts were sold at a price of between $103 and $180. The district court fined the false marking offender at a rate of $180 per set of stilts sold, for a total of $6,840. The court noted that using the highest point in the price range for each set fulfilled the deterrent goal of 35 USC 292.

Then, on June 10th of this year the Federal Circuit decided Pequignot v. Solo Cup, which many believed would put the brakes on the number of new false marking lawsuits being filed. However, surprisingly July has seen an up-tick in the number of complaints alleging false patent marking, with Unique Product Solutions filing 13 false patent marking cases in the Northern District of Ohio since July 1st, which still does not make it the most prolific false patent marking plaintiff since Thomas Simonian, Promote Innovation, LLC, and Patent Group, LLC have all filed more false patent marking complaints.

The Federal Circuit is set to hear the Stauffer v. Brooks Brothers appeal in early August 2010, which raises issues of what type of injury plaintiffs must allege to have Article III standing. Legislation has been proposed in both the Senate and House of Representative that would limit the class of false marking plaintiffs to those who have suffered a “competitive injury” due to the alleged false marking. The proposed legislation is retroactive and would apply to all pending cases. Now we wait; or more appropriately, some courts wait via staying pending false marking litigation pending the outcome in the Brooks Brothers case, while other courts are dismissing cases for lack of standing, and yet other courts are allowing litigation to proceed full-bore.

As of August 30, 2010, Unique Product Solutions has filed at least the following false patent marking actions in the Northern District of Ohio.

Please email David Dawsey if you wish to discuss the impact of false patent marking litigation on your business.

A selection of IP litigation matters handled by the boutique IP litigation firm of Gallagher & Dawsey is found here.