In In re BP Lubricants USA Inc., [Misc. 960](March 15, 2011) the Federal Circuit granted BP Lubricant’s Petition for a writ of mandamus directing the U.S. District Court for the Northern District of Illinois to dismiss a complaint for false patent marking under 35 USC §292 filed against BP. The Federal Circuit held that FRCP 9(b)’s particularity requirement applies to false marking claims, and that a complaint alleging false marking is insufficient when it only asserts conclusory allegations that a defendant is a “sophisticated company” and “knew or should have known” that the patent expired. Because this was the first time that the Federal Circuit held that FRCP 9 applies to pleading false marking, the District Court was instructed to grant defendant leave to amend the Complaint.
A few weeks ago on February 28, 2011, Judge Polster of the Northern District of Ohio held that the qui tam provision of the statute violates the “take care” clause of the U.S. Constitution. Unique Product Solutions, LTD. v. Hy-Grade Valve, Inc., Civil Action No. 5:10-cv-1912). The “take care” clause of the U.S. Constitution, Art. II, § 3, provides that the Executive Branch “shall take Care that the Laws be faithfully executed.” Judge Polster found that §292 did not provide sufficient controls by the Executive Branch over actions for patent mismarking, distinguishing other cases where the constitutionality of the statue had been upheld. The constitutionality of the current patent mismarking statue may be decided by the Federal Circuit later this year United States ex rel. FLFMC, LLC v. Wham-O, Inc., (Case No. 2011-1067).
On the legislative front, Congress is acting slowly to stem this opportunistic litigation. The Patent Reform legislation (recently passed by the Senate) restricts private mismarking claims to persons who suffer “a competitive injury” as a result of the mismarking. At least in the case of an expired patent, it is difficult to see any injury arising from “mismarking,” and it is arguably a benefit to competitors. The status of the patent can be quickly determined, and having the patent number is a tremendous advantage in addressing freedom to practice questions.
With increased pleading requirements making the assertion of mismarking claims more difficult, and the mismarking statute at risk of being declared invalid or being replaced, the end of this non-productive, opportunistic litigation may finally be in sight.