Court Says Patent Marking Law Is Unconstitutional; Expired Patent Trolls May Be Put Out Of Business
from the patent-marking dept
We’ve been covering the various lawsuits and legal questions surrounding false marking or false patent marking over the last year. You can read the link above for details, but the short version is that patent law says you can’t say something is patented when it is not — and that includes items whose patent has expired. That all makes some amount of sense, especially considering the goal should be that once something goes off patents, others shouldn’t be afraid to use it. However, the law also added a provision that lets anyone (yes, anyone) bring a false marking lawsuit — so long as they split the proceeds with the US government. The goal here was to give private actors incentive to enforce this law, since the feds knew quite well they’d mostly ignore it themselves.
The law had a liability limit of $500 for false marking. And therein lies a big problem, because that $500 is defined somewhat ambiguously, and it wasn’t clear if, say, you made a bunch of ties and marked them with an expired patent, if you were liable for $500 total for the whole bunch… or were you liable for $500 for each individual tie that bore the mark? Not too long ago, a court ruled that it was for each individual item, rather than at the product line level… and that opened the floodgates, as various folks around the country just went in hunt of any product with an expired patent number they could sue for mega bucks. In one example, it was noted that this ruling made the total liability jump from $500 to $10 trillion.
I was somewhat conflicted about all of this. I agree that you shouldn’t be able to falsely mark something as being patented, but it also seemed quite clear that this ruling and law were being abused not for any real consumer protection, but just to squeeze money out of manufacturers — and that seemed problematic.
velox was the first to alert us to a ruling that said such false marking laws are unconstitutional, mainly because they hand over a function of the government (preventing false markings) to private citizens, noting that this violates the constitution in handing over criminal law issues to private actors. I imagine there will be appeals and other rulings on this issue, but from an initial quick read, this ruling seems to make sense. It doesn’t make it legal to falsely mark a patent, but recognizes that this is a matter for the government to decide, not some private citizen.