Patent Marking Offers Rights, Quick Damage Recovery
Posted on Apr 27, 2017 in Articles
This article originally appeared in The Legal Intelligencer on April 25, 2017.
Have you ever noticed patent numbers on a product that you purchased? Those patent numbers show up everywhere: on the back of an appliance, on the bottom of a candy dispenser—even on the cardboard insulator for a hot coffee cup. Placing a patent number on a patented product is called “patent marking” and it is strictly voluntary, but doing so can afford the patent holder with significant rights.
Simply put, if a patented product is sold without patent marking, damages for patent infringement are unavailable until the infringer has been given actual notice of the infringement. Actual notice occurs when a party that is infringing a patent gains knowledge of that infringement. This may be accomplished, for example, by sending the infringer a “cease and desist” letter or by filing a lawsuit for patent infringement. If, however, a patented product is sold with a proper patent marking, the patent owner has then been provided with ”constructive” notice, and the patent owner can seek damages from the moment infringement began (subject, of course, to the other requirements for filing a patent infringement suit).
Patent marking is described in 35 U.S.C. Section 287(a): “Patentees … may give notice to the public that [an article] is patented.” Patent marking is optional, but the statute describes consequences for failure to mark: “no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice.” The purpose of the patent marking statute is to protect the public. There is no liability for damages until the patent owner has provided either actual or constructive notice. In particular, the patent marking statute serves three functions: “helping to avoid innocent infringement; encouraging patentees to give notice to the public that the article is patented; and aiding the public to identify whether an article is patented,” as held in Nike v. Wal-Mart Stores , 138 F.3d 1437, 1443 (Fed. Cir. 1998).
In order to obtain the damages permitted with proper patent marking, compliance with the patent marking statute is required not only by the patent owner, but also by any licensees authorized to practice the patent. Patent owners must take “reasonable steps” to ensure their licensees are marking patented products correctly.
Patent marking is accomplished in one of several ways. A first approach is to use the word “patent” or the abbreviation “pat.” with the product, along with the number of the patent that covers the product (e.g., pat. 7,000,000). The preferred way to use this approach is by placing these markings on the product itself. As an alternative, it is permitted to mark the packaging being used with the product (instead of the product itself), but this should only occur if marking the product directly is not possible or feasible. Examples would be when the product is too small for patent marking or the cost of marking the product is prohibitive (e.g., the cost of marking the product is high relative to the cost of the product itself). Packaging should not be marked (instead of the product itself) strictly as a matter of convenience. A second approach is to use “virtual marking” whereby the word “patent” or the abbreviation “pat.” is used, followed by a virtual marking internet address. At the internet address, the patented product can then be associated with one or more patents (see, for example, goo.gl/Lk33LU).
Just this month, patent marking became a significant issue when Rembrandt Wireless Technologies was denied certain damages in their patent infringement suit against Samsung. (See Rembrandt Wireless Technologies v. Samsung Electronics, No. 16-1729 (Fed. Cir. 2017).) Before trial, Samsung moved for Rembrandt’s damages award to be limited because Rembrandt had licensed its patent, the license agreement did not require the licensee to mark patented products, and the licensee sold the patented products without proper patent marking. Samsung argued that damages, if awarded, should be limited to the time period after Samsung received actual notice that Rembrandt’s patent had been infringed, (when Rembrandt filed their complaint against Samsung).
The wrinkle in the Rembrandt case occurred when Rembrandt deleted one of the claims of the patent in suit (a process called statutory disclaimer), and argued that, with the patent’s claim gone, the statutory requirement to mark a product with the deleted claim’s patent number in order to obtain pre-notice damages was also eliminated. The U.S. Court of Appeals for the Federal Circuit held that Rembrandt’s deletion of their claim “cannot serve to retroactively dissolve the Section 287(a) marking requirement for a patentee to collect pre-notice damages.” Rembrandt’s strategy of deleting a single claim in order to recover pre-notice damages, however, raised a novel legal question, which has been remanded to the district court for further consideration. It will be several months before the district court issues an opinion on this issue.
Patent marking is visible on many different types of products, but sometimes the phrase “patent pending” or “patent applied for” appears. These phrases might be used when a product is sold with technology that is included in a pending patent application (as opposed to technology protected by a granted patent). The pending application can be either a provisional patent application (which is limited to 12 month pendency) or a nonprovisional patent application (that can mature into an issued patent). The phrases “patent pending” and “patent applied for” may dissuade a potential infringer, but they have no effect on a future damage award.
Patent marking, however, must be done with care. False marking is subject to a fine of $500 for each incident, and only the U.S. government can sue to require payment of the fine. False marking is defined as: placing a patent number on a product with the intent to counterfeit, using the word “patent” in advertising to deceive the public, placing a patent number on a product that is not covered by that patent, and using language such as “patent pending” on a product for which no patent is pending. The use of an expired patent in any of the above scenarios is not considered false marking.
Proper patent marking can result in substantially enhanced patent damage awards. Routinely checking your company’s products to ensure proper patent marking is a wise business strategy.
– By Lawrence E. Ashery