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IP: Patent Holders Score Victories in Qui Tam Lawsuits

A previously little-used provision of the Patent Act has provided the fodder for hundreds of qui tam lawsuits filed over the last few years by plaintiffs seeking a windfall from manufacturers failing to remove expired patent markings on their products. The basis for these lawsuits is the provision in Section 292 of the Patent Act that provides a penalty for false marking of not more than $500 "for every such offense."

In 2009, the Federal Circuit, in Forest Group Inc. v. Bon Tool, added fuel to the fire holding that every falsely marked product (not just every make or model of a product, but every product sold) constitutes an "offense" under Section 292. Thus, the stakes in these cases escalated tremendously. In Pequignot v. Solo Cup Company, for example, Solo Cup was accused of falsely marking over 21 billion cup lids with two expired patent numbers. The plaintiff thus sought an award of $500 for each falsely marked lid or, as the Federal Circuit would later point out, an "award to the United States of approximately $5.4 trillion [and what] would be sufficient to pay back 42% of the country's national debt." To say the least, these cases have gone far beyond the intent of the statute.

Allan J. Sternstein

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Michael Stolarski

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