Saturday, August 01, 2009

Revitalizing false patent marking

Elizabeth I. Winston, The Flawed Nature of The False Marking Statute


In 2005, the United States Court of Appeals for the Federal Circuit rendered a decision on an “issue of first impression” interpreting a one hundred and sixty-three year old provision of the United States Code - the “false marking” statute embodied in 35 U.S.C. § 292. It is false marking to mark as patented an unpatented article if done with the intent to deceive the public and as such, is a fineable offense. The false marking statute remains one of only a handful of qui tam actions left intact from a rich history of varied incentives provided by the government for private enforcement. Enacted to protect patentees, and viewed as a blend of public and private resources, the false marking statute has failed to work as intended. These issue lies with the interpretation of the statute given by the courts. The penal nature of the statute has been eviscerated by the current interpretation, leaving us with an interpretation that is both false and flawed – the punishment should fit the crime, and the courts should not be allowed to read a statute into non-existence simply because of their discomfort with the qui tam nature of the action. Unduly emphasizing the fact that the false marking statute requires neither privity nor injury on the part of the party bringing suit, ignores the culpability of the party who has falsely

marked their innovation – harming both the patent system and the public. A party who falsely marks their innovation as patented should be presumed to have done so with the intent to deceive the public, and the burden should rest on the marker to prove that they lacked such intent. Furthermore, the penalty should reflect the culpability of the marking party, taking into account various mitigating factors, including whether the public was actually deceived, the materiality of the marking and the harm to competitors caused by the marking. Only then can the false marking statute ring true as the effective and economically efficient vehicle it was designed to be.

I think her proposal won't work to the extent it includes materiality--false patent marking will rarely be material to consumers; she also advocates looking at the effect on competitors, which I think gets a lot closer to the actual damage. Anyway, it's a good look at a provision of the patent law that doesn't get much attention.

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