What Is False Marking?
False marking (distinct from false marketing) occurs when a product is falsely labeled as covered by an enforceable patent.
Common Ways False Marking Occurs
False marking commonly occurs in three ways:
(1) there is no patent, only a patent application;
(2) the listed patent has expired or lapsed; or
(3) the product falls outside the patent claims.
Statutory Penalties for False Patent Marking
The statutory penalty for false marking is $500 per instance. In theory, a company selling 10,000 falsely marked units could face a $5,000,000 penalty.
Congressional Changes to the False Marking Statute
When the statute was first passed, law firms saw an opportunity and began filing lawsuits aggressively. Their conduct became so widespread that Congress quickly changed the law. Congress limited the penalty to “recovery of damages adequate to compensate for the injury.”
Proving Damages in False Marking Cases
In plain English, this means the plaintiff must prove actual damages. Proving damages for false marking is extremely difficult.
Example of a False Marking Scenario
For example, suppose a competitor falsely marks chairs with the number of an expired patent. Bob avoids selling similar chairs because he fears infringing that patent. However, proving damages would still be difficult.
Bob could easily check www.PublicPAIR and discover the patent was no longer in force.