Courts Continue to Rule on False Marking Cases

Attorney Ben Hodges Analyzes In re BP Lubricants

In In re BP Lubricants the Federal Circuit issued an expected writ of mandamus curtailing the growing proliferation of false marking cases. The Federal Circuit agreed with the majority of district courts in ruling that any complaint alleging patent false marking must meet the pleading standards for fraud articulated in Federal Rule of Civil Procedure 9(b). Rule 9(b) requires that when alleging fraud or mistake a party must state with particularity the circumstances constituting fraud or mistake. The Court explained that “[p]ermitting a false marking complaint to proceed without meeting the particularity requirement of Rule 9(b) would sanction discovery and adjudication for claims that do little more than speculate that the defendant engaged in more than negligent action.”

The Court further stated that “one cannot avoid the [particularity] requirement simply through a general averment that defendants ‘knew’ earlier what later turned out badly.” The Court found that generalized allegations, such as when a defendant is a sophisticated company with patent experience, do not meet the Rule 9(b) pleading requirements. The Court provided some examples of what would satisfy the requirements such as: allegations that the defendant sued a third part for infringement after the patent expired or allegations that the patent marking was revised or altered after expiration. The Court also found that though a presumption of intent to deceive may be triggered by some circumstances, as described in Pequignot v. Solo Cup Co., this presumption alone cannot satisfy Rule 9(b).

This case marks another in a line of multiple pending false marking cases at the Federal Circuit since it altered the standard for false marking damages in Forest Group, Inc. v. Bon Tool Co. Still to be decided are cases dealing with further pleading requirements, what defines an instance of marking in advertisements or websites, and the constitutionality of the false marking statute. Previously decided was the issue of standing in false marking cases.