Because the process for obtaining a patent in the United States is quite complicated and can be quite expensive, I decided to present this article for current and future patent owners, so you are aware of a huge potential pitfall. The issue is “patent marking.”
A key benefit of investing in and obtaining your valuable patent is that once the patent issues you are able to (1) stop others from infringing on your invention, and (2) receive damages if and when they do. And, given the statute of limitations for patent infringement is 6 years, those damages could rack up to a sizable amount of money. However, one clear way to shoot yourself in the foot as a patent owner is to not follow the law yourself.
What do I mean? U.S. patent law sets forth how a patent owner is to notify the public that an invention is indeed patented. Under 35 U.S.C. §287, a patent owner who makes or sells patented products should mark those products as set forth in the statute. If they don’t, they risk losing infringement damages attributable to the period of time prior to providing notice of infringement.
Here’s what the statute actually says:
Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word “patent” or the abbreviation “pat.”, together with the number of the patent, or by fixing thereon the word “patent” or the abbreviation “pat.” together with an address of a posting on the Internet, accessible to the public without charge for accessing the address, that associates the patented article with the number of the patent, or when, from the character of the article, this cannot be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.
Rough translation: Dear patent owner, if you don’t mark your patented products, you risk losing out on potentially years-worth of infringement damages.
We saw this play out in a recent case before the United States Court of Appeals for the Federal Circuit (“Federal Circuit”). In Arctic Cat Inc. v. Bombardier Rec. Prods., 2020 U.S. App. LEXIS 5023 (Fed. Cir. Feb 19, 2020), the Federal Circuit took up this very issue.
In the case, a patent owner, Arctic Cat Inc. (“Arctic Cat”), licensed certain of its patents to Honda to produce products. The license agreement did not require Honda to mark the products as required by the patent statute. So, when Honda made and sold the products covered by the patents, no markings were placed on them indicating that the products were patented.
After years of production, Honda stopped making and selling products covered by the licensed patents. Thereafter, Arctic Cat sued Bombardier for patent infringement. At the trial court level, a jury determined that Bombardier had willfully infringed the asserted patent claims and awarded damages for the six-year period before Arctic Cat filed the lawsuit. The court, however, disagreed and limited the recovery, holding that Artic Cat could not receive any pre-complaint damages due to Honda’s failure to mark its products as required by the statute.
Needless to say, Arctic Cat appealed. While I won’t go into the intricacies of its arguments here, it’s the Federal Circuit’s opinion which is indeed noteworthy. The Federal Circuit began by reaffirming two key points of patent law. First, the statutory marking provisions do not apply until a patentee makes or sells a patented product. Therefore, a patentee who never makes or sells a patented product may recover damages without ever providing notice of infringement to an alleged infringer. Second, a patentee’s licensees are also required to comply with the marking statute.
The Federal Circuit went on to hold that that once a patentee (or its licensee) begins making or selling a patented product, the notice requirement of 35 U.S.C. §287 attaches. A patentee can only cure a failure to mark by providing notice of infringement (e.g., cease and desist letter) or by beginning to mark patented products. The purpose of this rule is to incentivize a patentee who has sold unmarked products to begin proper marking.
The Federal Circuit also held that a finding of willful infringement does not satisfy the actual notice requirement of the statute. The Court made it clear that actual notice under 35 U.S.C. §287 requires the communication of a specific charge of infringement by a specific accused product. The focus is on the action of the patentee, not the knowledge of the infringer. Whether the accused infringer already knew of the patent or knew of the infringement is irrelevant.
So, remember, putting the public on notice that your product is patented is indeed important. In addition to the cachet to the consumer, it lets competitors know they should beware of copying. Moreover, if you don’t, you could be cheating yourself out of quite a bit of money if you must sue someone for infringement.
©2020 Albert F. Davis, Esq.
Disclaimer:
This law update is intended for general information purposes only. One should not consider the update legal advice or legal opinions relating to any specific facts or circumstances. An attorney-client relationship is not created by reading this update. Please feel free to contact A.F. DAVIS LAW for further information.