A recent federal court ruling reminds us that the statutory precaution of marking a  product with patent numbers is a double-edged sword. If the patent marking is inappropriate, the producer may be sued - by anyone – and fined up to “$500 for every such offense.”

In Pequignot v. Solo Cup Company, the federal court in the Eastern District of Virginia took up a suit against Solo Cup Company, which manufactures disposable cups, lids, and other disposable tableware. In the 1970s and 1980s, Solo obtained patent protection for certain lid products, and duly marked the products with the patent numbers.

Such patent marking is appropriate and generally desirable under 35 U.S.C. § 287, because it puts the public on notice that an item is covered by a patent, and, critically, is a requirement for obtaining pre-litigation infringement damages.  Solo also marked some products with a conditional notice: “This product may be covered by one or more U.S. or foreign pending or issued patents.” 

Unfortunately for Solo, it failed to retool its production lines to remove the patent markings as the patents expired. Some Solo products continued to bear the patent markings when the products were no longer patented.

Patent attorney Matthew Pequignot took notice, and sued Solo under the “false marking” provision of the U.S. patent law, 35 U.S.C. §292. That section provides, among other things, that:

Whoever marks upon, or affixes to . . . any unpatented article, the word ‘patent’ or any word or number importing that the same is patented for the purpose of deceiving the public . . [s]hall be fined not more than $500 for every such offense.

Thus, patent marking is a weapon that must be wielded with care. It provides undeniable benefits to the patent owner as long as the markings are accurate, but can become a liability otherwise.

In its most recent ruling in the case, the court upheld Mr. Pequignot’s right to bring the suit, even though he did not personally suffer any harm from Solo’s markings. The false-marking statute provides that “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.”

In fact, the court noted that the “only practical impact” of that clause “appears to be its potential to benefit individuals, such as [Mr. Pequignot] who have . . . chosen to file lawsuits in the hope of personal gain.” Patent owners, be warned.

In a prior ruling, the court found that marking an article with an expired patent number is false marking under 35 U.S.C. §292(a), and that a conditional patent marking (e.g., that a product “may be covered by one or more U.S. or foreign pending or issued patents”) may also constitute false marking, because it “suggests that the article is protected by the patent laws.”

As this area of law evolves, patent owners should take care that their patent markings remain accurate as patents expire, are invalidated or are abandoned, and should avoid conditional patent-marking language. They should also anticipate the cost and effort of retooling production lines to delete obsolete patent markings, as well as the lead time and potential disruption required to requalify products with customers who require requalification when changes are made to the products they buy.

As for Solo’s dilemma, the case may come down to a question of whether Mr. Pequignot can show that Solo’s markings were “for the purpose of deceiving the public.”  If so, and if the court decides that each lid, dish and utensil produced by Solo is a separate offense, Solo’s exposure could be astronomical. Solo needs to consider options for putting a lid on that risk.