Federal Circuit Enforces Rarely Utilized False Marking Statute

Under 35 U.S.C. §292, a competitor can bring an action against a person who falsely marks an item as being covered by one or more claims of a patent.  If false marking is found, the person is liable to the competitor in the amount of $500 per offense (i.e., per marked item).  In order to enforce this fine, however, the competitor needs to provide, by a preponderance of the evidence, that the person marked the item with “the word “patent” or any word or number importing that the same is patented for the purpose of deceiving the public.” (italics added).  While rarely enforced, in Clontech Labs., Inc. v. Invitrogen Corp., 406 F.3d 1347, 74 USPQ2d 1598 (Fed Cir. 2005), the Federal Circuit had an opportunity to clarify the burdens of proof in showing whether a falsely marked item is in violation of 35 U.S.C. §292.  In this case, Invitrogen is an owner of four patents directed to RNase H deficient Reverse Transcriptase (“RT”) polypeptides:  U.S. Patent No. 5,244,797, U.S. Patent No. 5,405,776, U.S. Patent No. 5,668,005, and U.S. Patent No. 6,063,608.  Invitrogen further markets RNase H deficient RTs known as SUPERSCRIPT (“SS”) and SUPERSCRIPT II (“SSII”), along with kits and cDNA libraries related to SS and SSII.  The SS and SSII have been marked with all four patents, whereas the kits and cDNA libraries were marked with some of the four patents.  A competitor, Clontech, sued Invitrogen on, among other grounds, under 35 U.S.C. §292 for false marking.  Clontech argued that the patents did not cover the sold SS, SSII, kits and cDNA libraries as indicated in the markings, and that Invitrogen was sufficiently aware that these were falsely marked so as to constitute a violation of 35 U.S.C. §292 at least in view of a test conducted in at least 2000.  The District Court found Invitrogen had falsely marked the sold SS, SSII, kits and cDNA libraries and was thus in violation of 35 U.S.C. §292.

On appeal, the Federal Circuit stated that the purpose of 35 U.S.C. §292 is to provide a mechanism of reliably determining if an article is covered by intellectual property.  This purpose is frustrated where unpatented articles are mismarked with an intent to deceive.  However, since 35 U.S.C. §292 is not a strict liability statute, there needs to be evidence that the mismarking was made with an intent to deceive as well as evidence that the marks were indeed false as not being covered by the listed patents.  The Federal Circuit held that the competitor needed to provide objective evidence that shows, by a preponderance of the evidence, this intent to deceive public.  If shown, the accused person can rebut by showing mismarking was not with intent to deceive.  From this test, the Federal Circuit held overturned the District Courts judgment of false marking for the SS and SSII since the conflicting evidence as to the meaning of the 2000 test results did not put Invitrogen on “clear” notice of mismarking and since Court did not interpret the recited phrase “substantially no RNase H activity” to show actual mismarking.

However, in regards to the cDNA libraries, the Federal Circuit upheld the District Court’s judgment of false marking since there was no disagreement about actual mismarking or that the patent owner was not aware that claims covered the cDNA libraries.  The Federal Circuit dismissed Invitrogen’s arguments that the public policy of 35 U.S.C. §292 is further even where there is no good faith belief that the patents cover the marked product as being contrary to the explicit purpose of the statute, which requires the patent owner to provide accurate information about the protected nature of the marked product.  Since there was no objective evidence of good faith belief in that the marking the libraries was not to deceive public and no evidence that marked patents did not cover cDNA libraries, the Federal Circuit upheld the District Court’s judgment for the cDNA libraries as being falsely marked as defined under 35 U.S.C. §292.

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