Products and packages often bear legends stating, “Patent Pending,” “covered by U.S. Patent No. X,XXX,XXX,” or other similar phrases. And, companies sometimes advertise their products as being “patented.” It may be worthwhile to investigate the accuracy of such representations because it could pay off — big time. How so? First a little background and then the answer.

Patentees may represent that their products are covered by a patent or are patent pending — i.e., that a patent application has been filed — for various reasons. For one, these “patent markings” serve as proverbial “no trespassing” signs directed at potential infringers. Also, the patented or patent pending status of a product can earn it respect and credibility among the consuming public. Furthermore, failure to mark one’s products with applicable patent numbers can adversely affect the amount of damages awarded to patentees who succeed in patent infringement lawsuits.

Under the patent marking statute, 35 U.S.C. § 287(a), marking one's product with an applicable patent number provides the public with constructive notice of the patent alleged to cover the product. Without such constructive notice, a patentee may only recover infringement damages beginning from the date that an infringer received actual notice of the patent at issue, e.g., by a letter from the patentee. Consequently, a failure to mark may interfere with a patentee’s ability to recover for years’ worth of infringement. Accordingly, patentees have incentive to apply patent markings to their products.

However, patent marking can be a double-edged sword. The patent laws include a “false marking” statute, 35 U.S.C. § 292, which penalizes intentionally deceptive representations that a product is covered by a patent or patent application.

The false marking statute has been around in one form or another since 1842, but has attracted very little attention until only recently. The Federal Circuit's Dec. 29 landmark decision in The Forest Group Inc. v. Bon Tool Co. dramatically changed the law on false marking. The court held that the penalty for false marking, which is a statutory maximum of $500 per offense, is “to be imposed on a per article basis.” This means, for example, that if 1 million products were falsely marked with deceptive intent, the penalty may be as much as $500 x 1 million offensive markings, or $500 million.

The foregoing hypothetical is not hyperbole. In a false marking case currently on appeal before the Federal Circuit, Pequignot v. Solo Cup Co., the patentee was accused of falsely marking tens of billions of products with expired patent numbers, allegedly in violation of the false marking statute. Clearly, false marking is serious business.

One more rather important detail: quite literally anyone can sue for false marking. There is virtually no standing requirement in the traditional sense — cognizable injury, etc. — to bring a false marking action. False marking is brought as a qui tam action, whereby a private individual or business entity can investigate false marking offenses and bring lawsuits against alleged offenders on behalf of the U.S. government. A successful false marking plaintiff, known as a “relator,” would split the award 50/50 with the United States.

via Law.com – Patent Markers Beware of False Claims.