Thursday, August 26, 2010

False Marking in Patent and Copyright Law

Jason Mazzone

Section 292 of the Patent Act provides for a civil penalty for falsely marking a good as patented. It says:

Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word “patent” or any word or number importing that the same is patented, for the purpose of deceiving the public ... shall be fined not more than $500 for every such offense.

Section 292 is a whistleblower provision. It allows anybody (without regard to personal injury) to bring a lawsuit and retain half of the collected penalty with the other half going to the United States.

A 2009 decision by the U.S. Court of Appeals for the Federal Circuit greatly increases the incentive to avoid section 292 liability. In Forest Group Inc. v. Bon Tool Co., the Federal Circuit held that each individual article that is falsely marked constitutes an “offense” within the meaning of section 292. Previously, lower courts had grouped multiple articles of the same product together as a single false-marking offense. This meant that the manufacturer of a falsely-marked product faced only a total possible fine of $500, regardless of how many individual articles were wrongly marked as patented. Following the decision in Forest Group, the manufacturer who falsely marks a product as patented can face fines in the millions of dollars, depending on the number of individual articles produced.

There is a lesson here for copyright law.

False claims of copyright are everywhere. As I documented in this article, copyright notices routinely appear on works that are in the public domain. For example, a pocket Constitution my students bring to class contains a copyright notice along with a warning against reproducing or transmitting the document without the publisher’s permission. Whatever the Constitution’s framers and ratifiers had in mind when they authorized Congress to enact copyright laws, they surely did not expect that one day somebody would claim a copyright in the Constitution itself.

The Copyright Act, in section 506(c), provides for a criminal penalty for fraudulently marking a work as copyrighted. However, the government almost never brings section 506(c) prosecutions. And in contrast to the Patent Act, the Copyright Act contains no civil false marking provision. With no downside to false marking, publishers have an incentive to label everything as copyrighted.

In reaching its result in Forest Group, the Federal Circuit reasoned that the language and history of section 292 supported a per-article interpretation of the patent mismarking fine, as did public policy reasons. The court explained:

If an article that is within the public domain is falsely marked, potential competitors may be dissuaded from entering the same market. False marks may also deter scientific research when an inventor sees a mark and decides to forego continued research to avoid possible infringement. False marking can also cause unnecessary investment in design around or costs incurred to analyze the validity or enforceability of a patent whose number has been marked upon a product with which a competitor would like to compete. These injuries occur each time an article is falsely marked. The more articles that are falsely marked the greater the chance that competitors will see the falsely marked article and be deterred from competing.

Unsurprisingly, since Forest Group, there has been an increase in false marking lawsuits. There is now a small and growing industry of section 292 claims.

Like false patent notices, phony copyright notices impose costs on the public. False copyright notices deter legitimate uses of public domain works. They result also in unnecessary licensing fees.

The Copyright Act should be amended to include a false marking provision modeled on section 292 of the Patent Act.

A false marking provision in copyright law would incentivize publishers to provide accurate information about the status of a work. Public domain works marked as copyrighted would result in liability. A new edition of a public domain work that adds copyrighted material (an introduction, for example, or annotations) would be required to carry a notice specifying what is copyrighted and what is not.

As with the Patent Act, anybody would be able to bring a claim against the publisher who falsely marks a work as copyrighted. The person bringing the lawsuit would retain a portion of the remedy.

Section 292 of the Patent Act furthers the utilitarian purposes of our patent system. A copyright false marking law will likewise promote the public interests of copyright.



Do you suppose opponents of such a plan will argue undue burden on their profitability? Were there any such arguments against the existing patent false marking law?

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The patent false marking statute is absurd. Nobody relies on patent marking today to determine patent rights. They go to the patent office web site. And no competent business would avoid competing based on a marked patent number without also checking to see if the patent was in force and applicable to their own product. Yet the statue mandates that violators pay $500 per mis-marked article. Solo Cup never bothered to take expired patent numbers off of its paper cups, and is now being held up by a clever relator for damages in excess of $1 TRILLION DOLLARS.

Nobody benefits from this law except lawyers.

Great link to the law firms hiding behind these so called Qui Tam (whistleblower) suits can be seen at I have a small business web site client caught up in a false patent mis-marking suit filed on friday. Holdup Suspender Company holds multiple US patents for their unique suspender clips as shown at Their original no-slip suspender clip patent was issued in 1990 (#4,901,408) has expired. They were granted and new improved design patent granted in March 2010 (D619,495 S), but have clips marked with the expired patent # on USA made suspenders in stock, on customers and at retailer stores.

Darn shame they face potential closure as the very active (10 cases) Qui Tam and attorney pliantiffs in Ohio want $500 bucks per mis-marked suspender clip, their domain, and replacement of all suspenders marked with the expired patent number. They have 6 temp people filing off patent numbers this Labor Day weekend as the new replacement clip stock, with new patent #, is in limited supply. NIce move by the Obama small biz friendly administration and Eric Holder Attorney General to actually participate in suing these family run tax paying entrepenuers hopefully ranking in their life savings and forcing closure of their businesses.

Amazing... from Brooks Bros. Bow Ties to Holdup Suspenders the wannabee King with no clothes jumps ugly on every USA manufacturer who are inventive enough to have patented products. **Incidently every judge in every courtroom are using court reporting equipment and computer harddrives mis-marked with expired patent numbers so they should recuse themselves ... or get some common sense.

See sections 1201 et seq for civil false marking copyright causes of action.

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