By now the reader should be aware of the prevailing scourge of “mismarking” lawsuits – suits brought against unfortunate manufacturers (known to those of us in the law biz as “poor schnooks”) who somehow forgot to delete patent numbers from their products when the patent expired. The number of such lawsuits exploded when the courts ill-advisedly held that the correct measure of damages is up to $500 per mismarked article, rather than per production run as was previously the prevailing law.
While the plethora of such suits provides employment for a host of attorneys, at a time when unemployment is at record levels, Congress seemingly has finally grasped the idea that these suits might be having a negative impact on a productive segment of the economy, namely the folks who actually produce something – the manufacturers. This new-found recognition is evidenced by a bill, recently introduced by a Republican, which would return the production run as the base for calculation of damages for mismarking.
Lest the manufacturers start celebrating – or the lawyers start commiserating – prematurely, we hasten to point out that such reform does not seem to be uppermost in politicians’ minds, who seem focused on legalizing – or smoking (but not inhaling) - pot. Two currently pending bills, which would limit standing to sue to those who were actually injured, are apparently about to die from inattention.
It is unclear whether this new bill, if passed, would apply only prospectively or also retroactively. It may have the unintended consequence of spurring the filing of mismarking suits as plaintiffs (technically known as “relators” or, more colloquially as “jerks”) seek to get in under the wire. Only time will tell.
I do like the competitive injury requirement. Interesting that there are 2 bills pending; I had only heard about one. Unfortunately, I've also heard from insiders that passage of any legislation addressing patent reform is (yet again) unlikely to get any floor time this year. It's a shame, but it's no surprise, either.
It seems most of our Colleagues are missing the simpler solution to this problem.
If it is so easy for an attorney with no patent experience to identify items marked with expired patents, then how are such mismarkings actually deceptive?
Let's face it, anyone paying attention knows that patents numbered below 5,250,000 have expired**. The District Courts and Fed Cir simply need to rule that a mismarking claim predicated on expiration of "U.S. Patent Number 4,789,123" does not meet the deception (intent to deceive) requirement as a matter of law.
** Patent number 5,250,000 was issued on October 5, 1993**
Requiring harm to the market is an attractive suggestion. However, such harm can play an important role in mismarking litigation under the current statute as part of damages calculations and/or as one indicia of intent to deceive. Once again, this change can be implemented through judicial clarification and does not require any action by Congress.
Finally, the proposed statutory changes to 292 may well relegate mismarking actions to counterclaims only. Under a "harmed party only" system, mismarking claims will almost always prompt an infringement action from the patent owner and raising the cost of the "mismarking action" prohibitively. Such an effect should be considered before any statutory changes are put into place.
barnhartm at pipkinferguson.com