The America Invents Act, or AIA, enacted in September 2011, was the most significant overhaul of patent law in 50 years. Some of the most publicized changes include the adoption of a first-to-file system, an increase in the fee schedule, the creation of a micro-entity, and the creation of a post-issue challenge period.
While these changes will undoubtedly affect patent prosecution strategies, it may take years for the courts to sort through all of the new law, the Patent Office to fully implement all aspects of the AIA, and practitioners to become fully versed in the new law. Patent marking law was also remodeled by the AIA, but has received significantly less attention. The ramifications of this change are comparatively clear and patent marking strategies can be effectively revised today.
A product is marked when the word “pat.” or “patent” and the number of the patent is placed on the product or the packaging of the product. False marking occurs when such a designation is improperly applied. The chief benefit of marking a product is that a marked product provides constructive notice to potential infringers.
If a product is properly marked, the owner may recover all damages from the time the infringement began. If the product is not marked, the patentee must provide and prove actual notice, for example by sending cease and desist letters or filing a lawsuit, and can only recover for infringement that takes place after the date of notice.
The AIA did not alter the notification benefit of marking products and this remains the primary reason to mark products.
The AIA did, however, change several of the negative aspects of patent marking law to favor patentees. Pre-AIA law allowed any member of the public to sue for false marking and to recover up to $500 for each article that was improperly marked with a patent number. The award from any lawsuit had to be split with the government. The AIA effectively removed this provision.
Now, only the U.S. government can sue for the $500 per article fine; it is unlikely that the government will begin to sue private entities for false marking. Private entities are still allowed to sue for false marking, but they are only able to recover their actual damages and must prove a competitive injury. Potential plaintiffs are therefore more or less limited to actual competitors.
Likely, it will be difficult to show both damages and competitive injury due to false marking because both are very speculative. In addition, the actual damages resulting from false marking are likely to be less than the potential $500 per article fine that was previously available. Although false marking is still prohibited, the likelihood of a lawsuit is significantly reduced due to fewer potential plaintiffs and the lower potential liability.
As an alternative to placing the patent number on the article or packaging, several companies have marked their products with website addresses. The related websites contain the patent information pertinent to the marked products. This practice is now known as virtual marking, and before the AIA, the law was unclear if virtual marking was sufficient to provide notice. However, the AIA explicitly authorized virtual marking as an appropriate method to provide notice to potential infringers.
In order to virtually mark a product under the AIA, the product must still be marked with the word “pat.” or “patented”, but does not have to include the specific patent number. Instead, the product or packaging can include the address of a freely accessible website. That website must list the patents that protect the product. Presumably, the website could list several patented products and the patents that cover each. Thus, once such a website is established, it will be much easier to mark a product. Many products may direct purchasers to the same page so a manufacturer will only have to maintain a single patent marking website if desired.
Marking can also be changed easily by updating the website. The patent information listed on the website should be kept up to date. New patents should be added as they issue and expired and invalidated patents should be removed. Virtual marking provides a relatively easy way to provide notice to potential infringers while avoiding the costs of constantly updating equipment with marking information.
In Pequignot v. Solo Cup Co., the Federal Circuit decided that a product that was once protected by a patent was unpatented after the patent had expired for the purposes of the false marking statute. According to the 2009 case, if a manufacturer did not remove a patent marking relating to an expired patent, they could be liable for false marking. The AIA specifically overruled this case and establishes that continued marking after a patent has expired is not false marking. Thus, if a product was ever protected by a patent, it may remain marked.
However, it is still a best practice to remove the “patented” designation once the patent expires, because the marking no longer provides the advantages of notice and could potentially be false marking if the patent did not actually protect the product. If the product is virtually marked, the patent number can be removed from the website. Although it is a best practice to remove expired patents from a product, packaging or website, there is no longer a requirement to do so.
Congress also eliminated all of the pending false marking lawsuits. The elimination of these lawsuits has been constitutionally challenged, but these challenges have not been successful. Although additional appeals may still be taken, it is not likely that these lawsuits, by some estimates as many as 500, will be reinstated. The elimination of these lawsuits provides security not only for those being sued, but also for anyone who marked products before the AIA was enacted.
The America Invents Act has significantly altered the law surrounding patent marking. Generally, the law now favors patentees who mark their products because the risks associated with marking products have effectively been eliminated. In addition the AIA established virtual marking as an effective way to provide notice. Virtual marking is therefore a powerful tool for manufacturers.
It is appropriate to review marking strategies now and to incorporate virtual marking. A periodic review of marked products should also be scheduled to add new patents to and remove expired patents from products, packaging and/or websites.
Garth H. Mashmann is an associate with the law firm of Heslin Rothenberg Farley & Mesiti PC. He can be reached via email at firstname.lastname@example.org, or at (518) 452-5600. The previous statements are for informational purposes only and do not constitute legal advice.