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Farewell, False Markings

It has been, for many large companies, a nightmare. Since the Federal Circuit handed down its December 2009 ruling in Forest Group Inc. v. Bon Tool Co., hundreds of businesses throughout the nation, in all industries, have been sued for false patent marking. These companies—including Gillette, Solo Cup, Brooks Brothers and Target—faced potentially staggering fines, sometimes running into trillions of dollars.

The vast majority of false marking suits were filed by speculators hoping to reap large financial rewards. But they can no longer bring or maintain these suits, thanks to the America Invents Act.

As of Sept. 16, false marking suits may be maintained only by a patentee’s competitors or by the federal government. And competitors may obtain only compensatory damages, not large punitive fines.

The statute also narrows the scope of false marking. Marking a product with an expired patent number is no longer false marking. And a product can now be marked just by indicating it is patented and listing a website that provides further details.

This legislation will end the tsunami of false marking lawsuits, according to many experts. “It’s a win for all corporations that make products,” says Yar Chaikovsky, a partner in McDermott Will & Emery. “It’s a win for the American economy.”

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