Violations Of False Patent Marking Statute Can Be Brought To Court By Anybody
In general, for plaintiffs to sue, they must have legal standing. Plaintiffs have legal standing when they can show: (1) injury in fact- a harm that is both concrete and actual or imminent, not conjectural or hypothetical, (2) causation- a connection between the injury and the alleged conduct of the defendant, and (3) redressability-a substantial likelihood that the requested relief will remedy the alleged injury in fact. In a recent case captioned Pequignot v. Solo Cup Co., 91 USPQ 2d. 1493 (E.D. Va. March 27, 2009), the Virginia District Court has ruled that violators of false patent marking statute can be sued by anybody, even if the Plaintiffs cannot show injury to themselves.
The false marking statute provides that whoever falsely marks a products with either a patent number, the words “patent” or “patent pending,” or any other words or numbers implying that the product is protected by a current or pending patent when it is not, and does so with the intent of deceiving the public “[s]hall be fined not more than $500 for every such offense.” 35 U.S.C. §292(a). It further states 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.” 35 U.S.C. §292(b).
In the Pequignot case, Plaintiff Matthew Pequignot is an individual who sued defendant Solo Cup Company for falsely marking several of its products with expired patent numbers and improperly marking other products with conditional patent markings. Solo is a manufacturer of disposable cups, lids, plates, bowls, and utensils. Plaintiff is not a competitor and is not doing any business related to sale or manufacturing of disposable wares.
Solo tried to dismiss Pequignot’s complaint by arguing that Pequignot lacks standing to bring the suit. The Court has determined Section 292(b) to be a qui tam statute, as: it defines false patent marking as a wrong to the government; it imposes a statutory penalty; it provides that any person may sue for the penalty regardless whether or not such a person is personally harmed; and, it allows the suing person to receive half of the recovery from the suit with the remainder going to the government. Historically, qui tam statutes allowed “relators” or “informers” to obtain a portion of the penalty as a bounty for their information. Qui tam relators played roles that today are served by police officers, prosecutors, and regulatory officials.
The Court further stated that qui tam statutes do not require that relators suffer an injury before they pursue an action. Thus, the Court held that although Plaintiff Pequignot lacks standing as a traditional plaintiff, Section 292(b) confers standing on him to sue on the United States’ behalf as a qui tam relator.
Solo also argued that the false marking statute should be restricted to competitors just like false advertising suits under section 43(a) of the Lanham Act. The court rejected Solo’s argument and indicated that the plain language of Section 292 (b) states that “any person may sue for the penalty” unlike the Lanham Act, which authorizes suit for false advertising by any person “who believes that he or she is …damaged by such act.”
Finally, the Court also rejected Solo’s argument that the false marking statute is unconstitutional as it fails to provide the Executive Branch with sufficient control over the litigation. According to the Court, long history of qui tam actions strongly supports a finding of their constitutionality. The Executive Branch need not wield the same level of control over civil litigation as over criminal prosecutions. Moreover, the Executive Branch is not without the ability to assert its interest in a qui tam action. United States may intervene, and the government is not barred from initiating its own action to enforce the substantive false marking provision of 292(a).
The information offered in this article is generalized and is not a substitute for the individual legal research and personalized consultation with an attorney, which is essential in every case. The information offered in this article further does not create a lawyer-client relationship.