The first half of 2010 was rough on businesses that own patents. Many such firms were swept up in a flood of new lawsuits, thanks to a Federal Circuit ruling in late 2009 that revitalized a previously obscure provision of patent law punishing those who incorrectly mark their products as patented. People seeking to make a quick buck went to court, alleging that businesses had marked their products with incorrect patent numbers and demanding damages of $500 for each wrongly marked item.
A defendant's potential liability was staggering. Solo Cup Co., for instance, was sued for $10.9 trillion dollars--an amount equal to more than 80 percent of the U.S. national debt.
That all changed in December 2009, when the Federal Circuit issued its ruling in Forest Group Inc. v. Bon Tool Co. The court held that each wrongly marked item is a separate offense under the statute.
Some people saw a golden opportunity. They could rake in millions by suing businesses whose mass-produced items were incorrectly marked. In the six months following the Bon Tool ruling, relators filed approximately 250 false patent marking suits.
Corporate Road Map
However, businesses cheered another part of the Federal Circuit's opinion. The court held that in order to violate the false marking statute, a defendant must specifically intend to deceive the public by falsely marking its products as patented.