It had been opined that the decision in Stauffer, and the similar decisions in Shizzle Pop and WHAM-O, would bring an end, or at least a diminution, to the stream of “false marking” lawsuits. All of these cases were dismissed on the grounds that the plaintiff lacked standing to sue.
Well, much to our surprise, the C.A.F.C. has reversed this dismissal, holding that the statutory provision “[a]ny person may sue for the penalty” really means ANY PERSON. However, they apparently had some reservations about the impact of this reversal, as evidenced by their direction to the lower court to address the defendant’s pending motion to dismiss “on the grounds that the complaint … fails to allege an ‘intent to deceive the public’ … with sufficient specificity to meet the heightened pleading requirements for claims of fraud … imposed by Rule 9(b).”
Taking solace and hope from the C.A.F.C.’s parting shot, the defendants in three false marking cases in Illinois moved for dismissal on the grounds that the complaints filed against them lack the requisite specificity with respect to the allegations of intent to deceive.
Alas, these attempts have met with, at best, limited success – one win, two losses – as the trial courts noted that “the Rule expressly provides that ‘intent, knowledge, and other conditions of a person’s mind may be alleged generally’,” meaning that no specificity is required.
With “standing” and “specificity of pleading” having been eliminated as effective defenses, defendants will probably seek to prove that they did not intend to deceive the public. Pequignot suggests that reliance on the advice of counsel, or the avoidance of business interruption, might serve in this regard. We suggest that mistake, carelessness and, possibly laziness, might also be argued.
THE LESSON TO BE LEARNED: Until the courts, or Congress, get around to dealing with this blight on the legal landscape, be careful of your patent marking.
I agree with the CAFC's decision here. However, the ruling might prove to little avail for prospective false marking trolls -- if Congress passes the current version of patent reform bill S.515, its inclusion of a "competitive injury" provision as requisite for standing will place an additional limitation on false marking patent suits. One door opens, and another door closes.