Part of the False Patent Marking Statute Found Unconstitutional

On February 23, 2011, Judge Polster of the U.S. District Court for the Northern District of Ohio in Unique Product Solutions Ltd v. Hy-Grade Valve Inc. held the qui tam provision of the False Patent Marking statute, 35 U.S.C. §292(b), unconstitutional. The qui tam provision allows anyone to file a false patent marking lawsuit. A basis for the unconstitutionality finding was the Court of Appeals for the Federal Circuit’s previous holding that “the false marking statute is a criminal one, despite being punishable only with a civil fine.” As currently written, the False Patent Marking statute effectively allows the public to be the police on behalf of the U.S. Government.

Unlike other qui tam provisions upheld by courts, the False Patent Marking statute permits any private entity that believes a product is being falsely marked with a patent number to file a criminal lawsuit in the name of the United States, without first obtaining approval from, let alone notify, the U.S. Government. The plaintiff may also settle the case and bind the U.S. Government without any involvement or approval. Because of this, “it is clear the government lacks sufficient control to enable the President to ‘take Care that the Laws be faithfully executed,’” as required by the U.S. Constitution, according to Judge Polster’s ruling. Of additional concern to the Judge was the “very practical policy” reason that inherent with the powers granted to government prosecutors is the responsibility to use that power to benefit the public welfare, not any private interests. In contrast, the Judge found that the False Marking statute provides “uncontrolled privatization of law enforcement,” especially considering the financial incentive for plaintiffs in false patent marking cases.

While not binding on many pending false patent marking lawsuits, Unique Product Solutions questions the constitutionality of the False Marking statute and it may help diminish the recent spate of false patent marking lawsuits filed since the 2009 Federal Circuit’s decision in Forest Group, Inc. v. Bon Tool Co. The constitutionality of the False Patent Marking statute is currently being addressed by the Federal Circuit in United States ex rel. FLFMC, LLC v. Wham-O, Inc., which would create binding precedent, and its opinion is expected within the next 12 months.

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