A Vanishing Opportunity?

Just a couple of weeks ago, we wrote about the “new patent trolls” – the folks who seek to make a living out of suing product manufacturers allegedly guilty of “mismarking” their products, that is to say, marking the products with the numbers of expired patents or patents which do not cover the product on which they are marked.

While we hesitate to claim credit for it – notice the author’s becoming modesty – there is a clear and growing backlash to this new and rapidly growing industry.

On the legal front, the courts seem to be raising the level of proof required to establish that the alleged mismarking was “intentional.” (Pequignot v. Solo Cup)

Solo had knowingly continued to mark cup lids with the numbers of expired patents, on the advice of counsel who opined that deletion of these patent numbers could be delayed until the molds, used to form the lids, were worn out or broken and needed replacement.

The trial court granted summary judgment in favor of Solo, on the ground that “there was not a scintilla of evidence” to support Pequignot’s allegation that Solo intended to deceive the public. During oral arguments before the appeals court – the C.A.F.C. – one of the judges seemed to suggest that the “false marking” statute – for the anal retentive reader, it’s 37 U.S.C. §292(b) – was criminal in nature, whereby intent must be proved “beyond a reasonable doubt.” The C.A.F.C. has not yet rendered its decision, which will clearly have a significant impact on the new trolls’ future incomes.

In another case, where a manufacturer was marking its adjustable bow ties – yes, ADJUSTABLE BOW TIES – with the number of an expired patent, the trial court dismissed the case on the ground that the plaintiff lacked standing to sue because he had failed to specify an actual injury to a competitor, the market for bow ties – if there, in fact, is such a market nowadays – or the U.S. economy. (Stauffer v. Brooks Brothers, Inc.) An appeal of this decision is also pending.

On the legislative front, a proposed amendment to the Patent Reform Act of 2009 would moot the Brooks Brothers case by limiting the right to sue for false marking to plaintiffs who have “suffered a competitive injury.” The proposed amendment would apply to all cases pending when the new law is enacted.

THE LESSON TO BE LEARNED: Nothing lasts forever; anyone planning to cash in on this new troll opportunity better hurry up and do so.

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