Patent owners that practice their invention are at a disadvantage compared to nonproducing patentees. The patent marking statute, 35 U.S.C. § 287(a), says that patentees that make and sell patented products or authorize others to do so, may mark their patented products and put the public on notice that the product is patented. However, failure to mark a patented product made or offered for sale limits the infringement damages available to the patent owner. In the absence of patent marking, damages are recoverable only for infringement that occurs after the infringer received notice of the infringement. Thus, for patent owners that make and sell a patented product without marking it, the patent marking statute operates as a forfeiture of damages, which may be substantial depending on the duration of infringement prior to providing the infringer with notice. There is no corresponding risk of forfeiture for nonproducing patentees.
From a practical standpoint, one of the challenges many patent owners face is the manufacturing cost of changing tooling and dies when a patent issues for a product that it may have been making and selling for years. This challenge is further complicated by the fact that a product, or components or subsystems of the product, may be covered by multiple patents, each with a different expiration date. From a legal standpoint, it may not be possible to know which patent or patents are likely to be most important from an enforcement perspective and which are most critical to be included in the patent marking strategy.
The recently enacted American Invents Act (AIA) provides some relief. Patent owners are no longer required to include the patent number on the product or packaging. They can now simply include the word “patent” or “patented” or the abbreviation “pat” together with an address of a posting on the Internet that associates the patented article with the patent number. The site must be accessible to the public free of charge. As a result, patent owners can now update a web site with their products’ patent information rather than changing their manufacturing equipment each time a patent issues or expires.
The AIA also reduces the risk of exposure to false patent marking lawsuits. Prior to the amendment to 35 U.S.C. § 292 under the AIA, plaintiffs could file qui tam actions, purportedly on behalf of the public, and seek to collect statutory damages (shared with the government) of up to $500 per unit sold of products that were marked with expired patents. In view of the manufacturing challenges of updating patent information for a product, there was no shortage of products in the marketplace marked with expired patent numbers. False marking suits became a favorite among plaintiffs. The AIA amended the false marking statute to permit only the U.S. government to collect statutory damages for false marking, and to limit the damages private plaintiffs can collect to actual damages from competitive injuries caused by the alleged false patent marking.
The AIA provides relief to patent owners by reducing exposure to frivolous false patent marking lawsuits, and by providing for virtual patent marking. Patent owners that make and sell patented products, or authorize others to do so, should consider implementing a virtual patent marking regime to avoid the risk of forfeiting infringement damages and devaluing their patents.