New Industry Springs Up Overnight: Filing Patent Marking Suits Over False Patent Claims
from the patent-marking dept
A few years back, we wrote about some lawsuits that were filed against companies who were still listing expired patents on their products, implying that those products were still protected by the patents. The practice of claiming patent coverage over something that isn’t patented is known as “patent marking,” and it’s become very popular lately. AdamR alerted us to the news that Activision was recently sued for patent marking, in listing out patents on certain games that don’t cover what’s in those games. But that’s just the tip of the iceberg.
Joe Mullin points us to the news that, in just the past few months, it looks like a bunch of lawyers have started going around filing patent marking lawsuits. In at least some of these cases, totally different groups of lawyers have sued the exact same companies over the same patents.
What’s going on?
Well, as we noted a few years back, there had been a few such cases filed under the law covering patent marking, and as they made there way through the courts, there was a question of how the penalties should be calculated. The law notes that anyone found to have been patent marking “Shall be fined not more than $500 for every such offense.” But, if you were selling products — say Solo plastic cup lids (which one such case is about) — is that $500 fine for all the lids (considering all the cups with the marking together to be a “single offense”) or does each cup lid constitute a separate offense? Clearly, the difference matters in a big way.
Without going into all the details, an appeals court ruled, at the end of last year, that the $500 should apply to each item, rather than to the product as a whole — massively increasing the liability for false marking. This particular ruling, the Forest Group ruling, applied to construction stilts, and greatly increased the liability — but in some of the other cases, the difference is even more striking. As some have noted, with Solo cups lids, there are supposedly 21 billion (with a b) cup lids with the allegedly falsely marked patent out there, meaning that a ruling like the one in Forest Group, if applied to Solo, turns a $500 liability into a $10 trillion liability.
That’s real money.
And here’s the next part of the law that makes things tricky. Unlike many court cases, anyone is allowed to bring a patent marking case. Yes, anyone. You just have to split the award with the US government. As the law notes:
Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.
So, with the Forest Group ruling last year, suddenly a bunch of lawyers realized that there could be good money in finding anyone with a falsely marked patent — especially if it’s on a consumer product of which there are tons in the market. Hence the sudden rush of patent marking cases, including duplicate suits against the same companies over the same patents.
There are some concerns, obviously, that this is a dangerous situation, with a bunch of lawyers basically scouring the country for anything marked with a patent that might be expired or doesn’t cover the product in question. In fact, I’ve seen some start calling them “patent marking trolls,” playing off of the “patent troll” concept. But, at the same time, as with copyfraud, falsely claiming a gov’t granted monopoly right over something that is not protected is a pretty serious problem — and a law that makes it profitable to punish such an abuse seems like it should be a good thing. Now, if there were only a similar setup for copyrights…