False marking claim fails on nearly all elements: can it ever succeed?

Two Moms and a Toy, LLC v. International Playthings, LLC, 2012 WL 4510686 (D. Colo.)

Two Moms sued IPT for patent infringement based on some toys called Yookidoo, which were also allegedly falsely marked “patent pending,” and which deterred potential licensees and consumers from buying from Two Moms for fear of infringing a patent.  IPT allegedly knowingly used the false marking because it was represented by competent patent counsel and was informed in 2011 that the toys were unpatented but continued to mark them.

The false advertising, false marking, and deceptive trade practices claims were dismissed.  It was undisputed that there was no patent on the defendants’ toys and no patent application.  But Two Moms failed to provide an objective indication to reasonably infer that the defendant was aware of the unlawful conduct.  Merely alleging that IPT was represented by competent counsel was insufficient.  And alleging that it continued to sell the falsely marked product after being notified of the problem was a mere conclusory allegation: Two Moms failed to identify its evidence that IPT continued to apply a patent pending label to the toys after it was advised that there was no such patent application.

In addition, Two Moms didn’t adequately plead competitive injury, because it wasn’t a competitor.  And it didn’t identify any potential licensee who was deterred or expressed concern over IPT’s false marking.  The same problem deprived it of Lanham Act standing.  And Colorado law requires a knowingly deceptive trade practice, which Two Moms had failed to allege, as found above.