Intentional Deception Is Required For "False Marking" Under The Patent Law

Wednesday, June 1, 2005 - 01:00
Barry J. Marenberg

The issue of patent marking is one that rarely appears before the Court of Appeals for the Federal Circuit. Recently, however, the Federal Circuit had the opportunity to decide a case dealing with false patent marking. The case is Clontech Laboratories, Inc. v. Invitrogen Corporation,1 a case in which the Federal Circuit was presented with "virtually an issue of first impression." Patent owners will find the Court's analysis extremely informative.

Patent Marking - Some Background

In order to recover damages for infringement, a product protected by a patent or patents is required to be "marked" with the patent number or patent numbers so as to provide notice to the public that the product is protected by one or more patents. According to 35 U.S.C. § 287(a), if a product is not marked, "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. Filing of an action for infringement shall constitute such notice."

Marking patented products with their corresponding patent numbers is an important part of any patent strategy, particularly if the patent owner wishes to (1) discourage a competitor from making, using, offering to sell or selling an infringing product, or (2) maximize the damages awarded for infringement of the patent. Though the patent marking statute employs permissive language, providing the patentee with the option to mark or not, a patent owner's failure to mark its product(s) opens the door for an accused infringer to avoid payment of damages.

Marking puts competitors on "notice" that the marked products are protected by the recited patent(s). Other ways to put potential infringers on "notice" of a patent include the sending of a letter that informs the infringer of the patent and the alleged infringing activity (such as the specific infringing product or products), accompanied by a proposal to abate the infringement, whether by license or otherwise; or by filing an action for infringement in Federal Court. Clearly, patent marking provides a patent owner with the simplest and most cost-effective manner of providing notice that its product(s) are patented.

The timely and proper marking of patented articles with their corresponding patent numbers serves to avoid innocent infringement by putting the world on "constructive notice" of the patent from the first day of the article's commercial life. The proper marking of patented products gives rise to an infringer's strict liability for damages. Thus, if a product is properly marked, even if an infringer failed to notice the patent marking on a product, it is still liable for damages for infringing activity related to that product.

Specifically, the marking requirement is satisfied by literally affixing the word "patent" or the abbreviation "pat.," together with the number of the patent on the patented article.2 If the makeup of the patented article will not allow such marking - a liquid pharmaceutical, for example - a label may be affixed to the product or the packaging containing one or more of the patented articles. Only tangible things or their packaging need to be marked to reap the full-damage benefit. To this end, patented processes or methods, such as a method for performing minimally invasive cardiac surgery, do not need to be marked because there is nothing tangible to mark. If, however, a patent contains both apparatus and method claims, then marking is required.

As stated above, if a patented article is properly marked, the world has been put on constructive notice that such article is patented, and any infringement of the patent, innocent or otherwise, will result in an award of damages for the patent owner. But what if an article or product is marked with a patent number but is, in fact, not covered by the stated patent?

Under 35 USC § 292(a), intentional false marking of an unpatented article as patented or patent pending is against the law and is punishable by a civil fine of $500 for every such offense.3 False marking further includes marking a product with the number of an expired or otherwise abandoned patent with the intent to deceive the public. If a patentee initially fails to mark a patented article, the marking defect can be cured by simply starting to mark. The patentee may then capture damages accruing after the date the marking requirement was satisfied.

The Clontech Case

In Clontech, Invitrogen appealed the District Court's judgment holding that it falsely marked certain of its molecular biology products. At issue were four Invitrogen patents, all entitled " Cloned Genes Encoding Reverse Transcriptase Lacking RNase Activity," and all which had claims generally directed to RNase H deficient Reverse Transcriptase ("RT") polypeptides. Invitrogen's products (RTs, cDNA (complementary DNA) libraries made using the RTs, and kits containing the RTs) sold under these patents were marked with the numbers of all four patents.

At trial, the parties disputed whether Invitrogen's products were falsely marked. In particular, the parties contested whether the patents at issue covered many cDNA library products and whether the kits and RT products failed to meet the "substantially no RNase H activity" limitation of the family of patents. RNase is the well-known abbreviation for ribonuclease, an enzyme that catalyzes the breakdown of RNA into smaller components.

The Federal Circuit began its analysis in Clontech by looking to 35 U.S.C. § 292(a), which states, in relevant part:

[w]hoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article the word "patent" or any word or number importing the same is patented, for the purpose of deceiving the public ... [s]hall be fined not more than $500 for every such offense.

Thus, when an unpatented article is marked, and such marking is for the purpose of deceiving the public, the statute is violated.

When the statute refers to an "unpatented article" the statute means that the article in question is not covered by at least one claim of each patent with which the article is marked. Thus, in order to determine if an article is "unpatented" for purposes of § 292, it must be first determined whether the claims of a patent cover the article in question. To make that determination, the claim in question must be interpreted to ascertain its correct scope, and then it must be ascertained if the claim reads on the article in question.

False marking plays an essential public policy role in that the act of false marking misleads the public into believing that a patentee controls the article in question (as well as like articles), externalizes the risk of error in the determination, placing it on the public rather than the manufacturer or seller of the article, and increases the cost to the public of ascertaining whether a patentee in fact controls the intellectual property embodied in an article.

Initially, the Federal Circuit began its analysis by stating that "[w]e see no reason to interpret the statute differently to render it a status of strict liability for mismarking." Thus, there is no violation of the marking statute without an intent to deceive. That the marking party did not have such an intent is irrelevant since the test is not a "subjective one." Instead, the test of intent to deceive is "objective."

The Federal Circuit concluded that in order to establish knowledge of falsity for the purpose of § 292(a), the plaintiff must show by a preponderance of evidence that the party accused of false marking did not have a reasonable belief that the articles were properly marked (i.e., covered by a patent). Absent such proof of lack of reasonable belief, the Court noted, no liability under the statute ensues. The question of whether conduct rises to the level of statutory deception is a question of fact.

At trial, Invitrogen provided evidence and witness testimony directed to a battery of experiments performed in the year 2000. The year 2000 experiments were performed to determine whether Invitrogen's RTs meet the assay defined "substantially no RNase H activity" limitation of the claims of the patents in suit. In reviewing the trial court's holding with regard to the year 2000 experiments, the Federal Circuit stated that the issue is whether the results of the year 2000 experiments should have disabused Invitrogen of any good faith belief that it harbored concerning the RNase H activity of the RT products. Viewing the testimony and evidence as a whole, the Federal Circuit was convinced that the trial court erred in deciding that the results of the year 2000 experiments put Invitrogen on notice that its products were not covered by the patents in suit. As such, the Federal Circuit reversed the trial court's determination that data generated by the year 2000 experiments constituted notice to Invitrogen that the marking of its RT products were statutorily deceptive based exclusively on the limitation "substantially no RNase H activity."

Practical Implications

Clontech holds that there is no liability for false marking where the patent owner had a reasonable belief that that marked products were in fact covered by the claims of the patent. It remains a sound strategy to mark products under 35 U.S.C. § 287(a), and furthermore to carefully ascertain that the marked products are actually covered by the claims of the patent(s) with which they are marked. A patent owner should apply good faith and reasonable efforts to keep all patent marking up to date and accurate. Any potential for a showing of intent to mislead the public by improperly marking products should be addressed early on and where possible eliminated at the outset. Moreover, a careful patentee, who is marking an article with a patent number, should consider creating a contemporaneous memorandum or other documents that would be admissible on the issue of intent, should the "good faith" of the patentee in marking the article ever be questioned.

1 -- F.3d --, 2005 WL 1038775, Fed. Cir., May 5, 2005.

2 35 U.S.C. §287(a)

3 35 U.S.C. §292(b) provides that "[a]ny person may sue for the penalty, in which event one-half shall go to the person serving and the other to the use of the United States."

Marc S. Friedman is a Member of the Firm of Sills Cummis Epstein & Gross P.C. and the Chair of the Intellectual Property Group. Barry J. Marenberg is an Intellectual Property attorney at Sills Cummis Epstein & Gross P.C. Copyright 2005, Sills Cummis Epstein & Gross P.C. All rights reserved.

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