Liability For False Marking Requires High Degree of Deceptive Intent

The Federal Circuit recently issued a highly anticipated decision in Pequignot v. Solo Cup Co., which clarified what constitutes false marking under the false marking law codified at 35 U.S.C. § 292.  The false marking law was brought to the forefront earlier this year when the Federal Circuit in Forest v. Bon Tool confirmed that a party found liable for false marking may be fined up to $500 for each article that is falsely marked.

Section 292 states that a person is subject to a statutory fine if they mark an “unpatented” article as being patented “for the purpose of deceiving the public.”  Prior to the Solo Cup decision, questions still lingered regarding: (1) whether articles marked with expired patent numbers can be “unpatented” articles; and (2) the bar for proving the defendant acted “for the purpose of deceiving the public” under the statute.

With regard to the first issue, the Federal Circuit determined that an article marked with an expired patent can be considered false marking under Section 292.  In other words, the Federal Circuit confirmed that certain Solo cup lids accused by Pequignot of being marked with an expired patent were “unpatented” under the statute, and thus falsely marked, because the patent that previously covered the lids expired and was no longer in force.  

Solo avoided false marking liability, however, by prevailing on the second issue.  Specifically, the Federal Circuit held that the bar for proving the requisite deceptive intent is “particularly high” and it requires a purpose of deceit, rather than simple knowledge that a marking is false.  While the Federal Circuit found that knowing a marking is false created a presumption of false marking liability, that presumption can be rebutted by showing that the alleged false marker did not act with an intent to deceive.  The Federal Circuit determined that Solo demonstrated that it acted in good faith and never intended to deceive the public, in part, by relying on the reasonable opinions of its outside counsel.

The Solo Cup decision confirms that even if a company knows a patent marking may be false, liability for false marking can be avoided if the company demonstrates it acted for reasons other than to deceive the public.  While proving a lack of deceptive intent can be very fact specific, some facts highlighted by the Federal Circuit in Solo Cup may help avoid a false marking finding, including consultation with counsel to implement a program to avoid falsely marking products.