Spain: Modification of EP translations (2)

In the first post of 2011 we made reference to 3 rulings of the Spanish Supreme Court, granting the appeals filed by Pfizer and Warner-Lambert (here).

The Spanish Supreme Court has granted a fourth appeal, filed again by Pfizer. The case refers to EP0325571.

Arguments used by Spanish Supreme Court in the new ruling are the same previously used: Translation of European Patents can be modified at any time, in order to include claims deleted (for any reason) in the original translation.

A copy if the new ruling (in Spanish) can be obtained here, or using the Spanish Supreme Court database (here) if the link to the ruling doesn't work (as it may happen).

PCC 25: Will High Court litigation threat make Cautious’ tentacles wobble?

The PatLit PCC Series, subtly scripted by the Chartered Institute of Patent Attorneys (CIPA), seeks to explain how litigation works in the recently-revamped Patents County Court (PCC) for England and Wales, taking as its theme a dispute between Cautious Co and IPOff Ltd as to whether IPOff has infringed the IP rights of Cautious in its robotic octopus. In this episode, the 25th, CIPA President Alasdair Poore considers further the issues raised with regard to transfer of litigation between the PCC and its big, more expensive brother the Patents Court.

Last week Cautious was considering the possibility of having IPOff’s claim in the Patents Court struck out – on the grounds that it was an absurd abuse of process to bring proceedings in the High Court when there were already proceedings which raised many of the same issues pending in the PCC.  Despite gaining a taste for litigation, Cautious's patent attorney has decided that discretion is (partly) the better part of valour, and will be making an application to have the proceedings transferred to the PCC, at least as an alternative to strike out. 

As readers will know, the considerations in relation to transfer are set out in s.289 Copyright Designs and Patents Act 1988.  This disapplies (currently) s.41 of the County Courts Act 1984 (order by the High Court to transfer from the County Court to the High Court) – but this only applies to the special jurisdiction of the PCC, so it is relevant in Cautious's case but might not be in other cases.  It then provides that, in other cases, the Court will have regard to the financial position of the parties.  This leads to the provisions of Part 30 (CPR30.3), which sets out the general criteria for transfer between any County Court and the High Court.  Of these, Judge Birss QC pointed out in Alk-Abello v Merdian ([2010] EWPCC 14), rules 30.3(c), (f), (g) and (h) were unlikely to be relevant in most PCC cases (para 18), leaving the financial value and amount in dispute (30.3(a)), an alternative court being better 30.3(b), simple or complex facts, issues, remedies or procedures (30.3(d)), and the importance of the outcome to the public (30.3(e)).  

In addition, CPR63.18 explicitly provides for transfer, and in particular that the provisions of PD63.9 will apply.  These are: 

“(1)      the financial position of the parties and whether a party can only afford to bring or defend the claim in the Patents County Court;

(2)        whether the claim is appropriate to be determined by the Patents County Court having regard, in particular, to
(a) the value of the claim;
(b) the complexity of the issues;
(c) the estimated length of the trial.”

Finally, Judge Birss QC referred to Memminger v Triplite (Court of Appeal) ([1992] RPC 210) and Chaplin v Lotus (ditto, unreported) to bring in several commonsense propositions: first in Memminger: if there is no reason to alter the position, all the factors are neutral, the proceedings should stay put; and proper administration of justice is important and not just the parties wishes (para 24); and transfer is not required just because there are important matters of fact or law, and the aim of the PCC is to handle the smaller, shorter, less complex, less important, lower value actions.

These propositions were reflected equally in the subsequent case in the High Court seeking transfer to the PCC, Caljan Rite-Hite v Solvex ([2010] EWHC 669 (Ch)).  Here Kitchin J had to decide on possible transfer of a trade mark ownership dispute.  Interestingly, the case started in the IPO, was transferred to the High Court at Solvex’s request, and then Solvex sought to have it transferred to the PCC.  In addition, as in Cautious's case, there were also patent and other disputes in the offing, but these were not discussed further. 

Kitchin J’s analysis is a useful summary of the some of the steps to go through: could Solvex afford to litigate in the High Court – although somewhat impoverished, there seemed to be evidence they could raise finance, and they agreed that they would continue to defend the proceedings in the High Court (para 18, 19).  Value: the value of the claim seemed to be about £500,000 (over or under but significant).  Complexity: it was clearly to require disclosure, probably 6 witnesses each with cross examination.  Trial length: in the light of these it really was unlikely the proceedings would last less than 3 days, and probably more.  So no transfer was ordered.

How will those apply to Cautious?  It is always difficult to say “no, I will not fight the proceedings if they are in the more expensive forum”, unless really being squeezed.  But it is worth bearing in mind that this really may be pretty decisive.  In this case  Cautious did not bring proceedings in the High Court because they were too expensive, so …?  Will he hold his nerve and say he would not defend the threats claim in the High Court?  The other factors, Cautious's patent attorney has already concluded that he could justify proceedings in the PCC.

There is one other factor which will surely be relevant here: the existing PCC proceedings.  The factors should be the same in applying to transfer the High Court proceedings to the PCC, and the PCC proceedings to the High Court, with the exception that the PCC proceedings were started first, because it cannot be sensible for proceedings on many of the same facts to take place in both jurisdictions.  However it would seem strange for Cautious to be arguing the case for not transferring the PCC proceedings to the High Court as part of the application to transfer the High Court proceedings to the PCC.

The proposal is, in medium term, to make an amendment to s.292 of the CDPA 88 to permit both applications to be brought before the High Court.  In the meantime, if this situation crops up in real life there are probably some imaginative ways of finessing the problem – for example by having Judge Birss wear two hats (or is it wigs).

"The public should not be expected to check the EPO register", says judge

Mr Justice Floyd (Patents Court, England and Wales) handed down his judgment in this morning in Lundbeck v Infosint [2011] EWHC 907 (Pat).  Simon Spink (Wragge & Co) has written this short summary, adding the observation that this ruling appears to mark a significant progression of the law in relation to the Patents Act 1977 s.68 (which deals with the effect of non-registration of a transaction on infringement proceedings) and reach-through claims. Lundbeck also had a defence under s.64 (the right to continue use begun before priority date).  However as that defence was accepted by Infosint, Floyd J did not make any detailed conclusions on the law in relation to s.64.  Anyway, Simon explains, with references to the judge's paragraph numbers in []s:

"This revocation action was brought by Lundbeck against Norpharma and its assignee Infosint (the proprietor of the patent, who had not registered the transfer with the UK IPO, leaving Norpharma as the registered proprietor). The patent related to a method to make 5-carboxyphthalide (5-cbx), the first intermediate in the manufacture of Lundbeck's blockbuster anti-depressant drugs citalopram and Escitalopram, involving a reaction of two common reagents in a solvent. This was claimed in claim 1, the distinguishing features of the claimed process over the prior art being one or more of (i) the temperature and (ii) the pressure at which the reaction was conducted, and (iii) the concentration of the solvent. The patent also contained a "reach-through" claim (claim 22), which claimed a process for the synthesis of citalopram in which the process of claim 1 was contained.

Lundbeck said that claim 1 lacked novelty and inventive step over the prior art; that claim 22 was obvious and insufficient. Infosint counterclaimed for infringement of the patent by Lundbeck's use of the processes in the UK, and by importation into the UK of direct products of claim 22 (i.e. citalopram) made outside the UK. Infosint's infringement case was based on over 40,000 pages of batch records produced by Lundbeck and its third party manufacturers. In addition to its non-infringement arguments, Lundbeck pleaded a prior user defence under s.64 (it had been using the process on a commercial scale for some 15 years prior to the publication of the patent application) and also argued s.68 (as a limitation to any damages and/or costs).

As for novelty, Floyd J was required to consider the law of overlapping ranges in relation to a novelty-only prior art citation under s.2(3). The only integer in issue was the concentration of the solvent in the prior art document. Floyd J found that absence of a concentration figure in the prior art could not amount to a disclosure of a range of concentrations from 1% to 99% [93]. Accordingly, it was not necessary for him to decide whether to follow the EPO Technical Board of Appeal in Unilever T-666/89. [Readers who don't like the technical details should skip the coloured text]

Claim 1 was found to be obvious over the Forney prior art citations [121]. Claim 22 was found to be obvious over the '513 patent and Forney. The approach taken in reaching the later conclusion is worth noting. Lundbeck said the skilled person would start with the '513 patent (a published method to make citalopram from 5-cbx) but would need a method to make 5-cbx; and his search for such a method would uncover Forney's work (with the obvious consequence that he would use the claimed process to make 5-cbx). The Judge noted early on in his Judgment that "it is impermissible to make so-called mosaics of individual citations (unless it would be obvious to do so)" [20]. However, on the evidence, the Judge found that the skilled person seeking to work '513 would consult "the Beilstein handbook of Organic Chemistry … the standard reference for the preparation of organic compounds" [127] and would "obviously and inevitably find and read Forney" [133]. Lundbeck also made an "aggregation" argument , which the Judge did not feel it necessary to deal with [134]. 

Claim 22 was not found to be insufficient, the Judge finding that the technical contribution of claim 22 was making citalopram via 5-cbx made by the process of claim 1 and accordingly the claimed monopoly did not exceed the contribution to the art [143]. The Judge also held that despite the patent not disclosing all methods of making citalopram from 5-cbx, one could reasonably expect the invention to work with other methods and thus the claim was sufficiently enabled across its entire breadth [145]. 

Lundbeck had made 5-cbx before the priority date in both the UK (since 1995) and Denmark (since 1986) and Infosint accepted that Lundbeck had a section s64 prior user defence in relation to the operation of those processes. The judge was therefore not required to make detailed conclusions on the law on the prior user defence. However, the Judge did say that the prior user right in relation to importation of citalopram should only extend to citalopram made by the process of claim 22 and not citalopram however made - one relying on section s.64 may only do what is "substantially the same as what was done before" [170]. A substantial change to the process may still result in a process within the scope of the claim - accordingly the s.64 defence did not extend to two pot processes (a variation devised by Lundbeck after publication of the patent to avoid infringement). 

Although the patent was found to be invalid, Floyd J still dealt with s.68. Infosint had registered the assignment of the patent at the EPO - but this had been after its date of grant. Thereafter, Infosint's UK agents, although instructed to do so, had omitted to register Infosint as proprietor on the UK register. Floyd J found that, once a patent was granted, there was no deeming provision for the purposes of the Patents Act which applied to assignments registered at the EPO, and thus the assignment had not been registered for the purposes of the Act [196]. 

"The public should not be expected to check the EPO register to see whether by any chance an assignment of the patent was registered …". 

Infosint argued that the "applicants" had done all that was practicable, and it was their agents who had erred. The judge did not agree, and accordingly Lundbeck could have relied on s.68 to limit damages (pre-29th April 2006) and costs (post-29th April 2006) had the patent been valid [201]".

Thanks, Simon!

Administrative appeals in China - check your post

That the Chinese courts are sticklers for procedural detail is well-known, writes Sharon Qiao of Rouse Beijing. A recent IP Kat blog pointed out to foreign litigants the fundamental importance of having evidence for use in mainland litigation notarised; failure to do so runs the risk of having the evidence rejected by the Court. A recent story from Beijing highlights the need to adhere strictly to the time limits for filing administrative appeals against Patent Reexamination Board (PRB) decisions. It also provides guidance on taking advantage of the ‘postal rule’.

Beijing lawyers acted for a client in an administrative appeal to the Beijing No. 1 Intermediate People’s Court (the Court) against a PRB decision which had held the client’s patent invalid. Appeals from decisions of the PRB must be filed within three months of the date of receipt of notification of the decision. Art. 4, paragraph 3 of the Implementing Regulations of the Patent Law states that “where any document is sent by post by the patent administration department, the 16th day from the date of mailing shall be presumed to be the date on which the party concerned receives the document”. Here, although the appeal had been filed within three months of ‘receipt’ of the decision, as defined in Art. 4, para 3, it had been filed after the expiration of three months from its issuance. The question arose whether or not the appeal had been filed in time.

The Court requested the appellant to provide proof that the decision had been received by post i.e. that the appellant was entitled to the benefit of Art. 4, paragraph 3. It is usual for PRB decisions to be served by post, and the Court had never previously required proof of sending. The patent agency to which the decision had been sent had not kept the original envelope and was thus unable to provide the post-mark date. Fortunately, information about the posting of decisions is provided on the State Intellectual Property Office (SIPO) website; this information was corroborated by the post registration number stamped on the PRB decision itself. This evidence satisfied the Court and the appellant was able to benefit from the rule that the three month period for filing an appeal only starts to run from the 16th day after posting. The appellant’s appeal documents were thus accepted by the Court.

How many appellants have not been so lucky? The IP division of the Beijing No. 1 Intermediate People’s Court deals with 4,000 patent and trade mark administrative litigation cases a year and is dealing with a large backlog of cases at present. It does not have to look far for an excuse to reject a case outright.

Prospective appellants are advised to file their initial appeals as soon as possible after receiving the PRB decision, and to ensure that formal case filing materials (e.g. notarised and legalised Powers of Attorney, Company Certificates and Certificate of Legal Representative) are submitted well within the three month time limit.

Where appellants wish to take advantage of the provisions of Article 4, they should visit the following link to obtain proof that the decision they are appealing was sent to them: http://app.sipo.gov.cn:8080/sipoaid/sipoaid/jsp/notice/searchnotice.jsp.
It is, however, also advisable to keep the envelope in which the decision was posted, as security, just in case postage information is not available on the website.

It should be noted that where a decision has been delivered by hand, the prospective appellant will not be able to benefit from the 15-day ‘extension’ provided by Article 4, paragraph 3: in that case, the decision will be deemed to have been received on the date of delivery (Article 4, paragraph 4).

PCC Page 24 – One strike (with a tentacle) -- but are you out?

The PatLit PCC Series, subtly scripted by the Chartered Institute of Patent Attorneys (CIPA), seeks to explain how litigation works in the recently-revamped Patents County Court (PCC) for England and Wales, taking as its theme a dispute between Cautious Co and IPOff Ltd as to whether IPOff has infringed the IP rights of Cautious in its robotic octopus. In this episode, the 24th, CIPA President Alasdair Poore considers the prospects of striking out a High Court claim which looks as though it might be an abuse of process  ...

IPOff issued proceedings in the High Court (Patents Court) for threats – alleging that the comments that Cautious had made about his (alleged) patent and designs had resulted in the loss of business from a betting syndicate which was about purchase IPOff’s system, fearing the might (and costs) of the UK courts, and being unwilling to bet on success.  IPOff allege that the contract would have been enormously profitable, well in excess of the proposed PCC damages limit, and that such a case is only suitable for the High Court.
 Cautious’s patent attorney is contemplating whether Cautious should seek to strike out the claim as an abuse of process.  It is quite clear to Cautious that the High Court claim was brought simply as a malicious exercise to rack up costs and make proceedings more complicated.  The alternative is to apply to the High Court for transfer of the claim to the PCC.  At the moment, there is no damages limit, so it is not even necessary to agree potential recovery above the damages limit.
 As far as Cautious’s patent attorney can determine this is a bit of a new area.  Striking out for abuse of process, and indeed specifically striking out a claim for multiplicity of proceedings, is not a new area at all – more on that in a moment.  But bringing simultaneous proceedings in more than one English court, especially where there could be sound reasons for the second set of proceedings to be brought in the second court, is not such a common occurrence.  There are numerous cases where proceedings have been brought in multiple courts in different countries – cross border forum-shopping.  The intention in the EU of the Brussels Regulation was to reduce cross border forum-shopping, although torpedoes and super torpedoes were born as a result.  But in those cases there is not the option of transfer.
 Cautious patent attorney thinks: “A strike out would be a rather satisfying solution.  Not only would it deal with the question of costs in the High Court – definitely awarded against IPOff -- but it would look like a victory.”  A small, but nevertheless tactical victory.  A word of caution here.  Tactical victories look and feel great.  However, they are often used as a good way to incur costs without taking a case much forward.  When you start thinking “tactical victory” in the PCC, also think “is this really a good use of client resources?”
 The court has the power to strike out a statement of case under its case management powers in CPR3.4(2) if it appears to the court that

(a)        the statement of case discloses no reasonable grounds for bringing or defending the claim;(b)        the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings; or(c)        there has been a failure to comply with a rule, practice direction or court order.

 The power under CPR3.4(2) does not limit any other power of the court to strike out a statement of case (CPR 3.4(5)).
 PD 3A 1.4 provides examples of where a case is without merit. An illustrative example where a claim may fall with CPR 3.4(2)(b) where it is “vexatious, scurrilous or obviously ill-founded” (PD 3A 1.5). Although an application to strike out the High Court threats claim is tempting, there is a salutary lesson to be learned – the courts tend to treat such applications as a last resort and Cautious might find costs orders against it, should its application be dismissed. Indeed, in Reckitt Benkiser UK v Home Pairfum Limited [2004] EWHC 302 (a trade mark infringement case with a counterclaim alleging groundless threats), Laddie J considered the courts' powers to strike out a valid cause of action as in Wallis v Valentine [2002] EWCA (Civ) 1034, [2003] EMLR 8 and said: 

“The court’s powers under the CPR are wide.  They should be tailored to meet the circumstances of the case.  Although, as Wallis shows, the court has power to strike out even a prima facie valid claim where there is abuse of process, it does not follow that in all cases of abuse the correct response is to strike out the claim.  The striking out of a valid claim should be the last option.  If the abuse can be addressed by a less draconian course, it should be” 

As mentioned above, there is a class of strike-out which has become increasingly familiar recently, which quite often occurs in intellectual property cases.  This arises where a claimant attempts to litigate in a later set of proceedings a claim which should or could properly have been brought in earlier proceedings.  Because, in many intellectual property cases, one act, such as sale of a product, can give rise to several causes of action (such as infringement of a trade mark, passing off, design right infringement and patent infringement), there is the potential to bring multiple claims.  The question is: will the court permit that?

The principle that the Courts will not is based on (and referred to by the name of) a 19^th century case, Henderson v Henderson   There is an excellent and very full discussion of the issues, which also reviews many of the past examples, in Jonathan v Gore Wood, and a further discussion in the White Book (Vol.1, para 1.4.15), and Nikken Kosakusho Works v Pioneer Trading Company [2005] EWCA 906 provides and example in the patent field.  The specific issue is not one of res judicata or issue estoppel (the principle that a party will not be allowed to relitgate the same facts, which is an absolute bar to fresh proceedings), but is that there should not be a multiplicity of proceedings where a party could properly be expected to have litigated them together, and is strictly a part of the courts powers to regulate proceedings.
 This issue is potentially very pertinent in the PCC.  What if a claimant thinks that the trade mark or registered design case is straightforward, and entirely suitable for the PCC, but the patent case would be much too complicated and difficult, or just too expensive and unsuitable?  Can the claimant be permitted to bring proceedings in one court, lose and bring a fresh set of proceedings in a different court?
 The prospect of proceedings being started in parallel courts was one that the group looking at revised rules for the PCC did contemplate, and it is for that reason that there is a proposal to amend the transfer jurisdiction so that an application for transfer can be brought in either the High Court or the PCC, but that provision has not yet been implemented.  While the Henderson v Henderson cases are important for intellectual property practitioners and clients thinking that they might keep some of their powder dry, it is also worth repeating that the Court is likely to look on an application to strike out with considerable caution, and ask whether any lesser remedy will serve the same purpose.  In this case, since the probable outcome is that IPOff will bring fresh proceedings in the PCC, it is likely to view the better course as transferring the claim and making an adverse costs order.
 Cautious’ patent attorney has been informed that an application to transfer can be made in writing, and that is what he plans to do.  Striking out looks like a strike too far.

Judicial reform of patent litigation in the US: new article published

"Judicial reform of patent litigation in the USA" is the title of a team-authored article which will soon be published in the Journal of Intellectual Property Law and Practice (JIPLP). The team consists of James R. Farrand, Victoria C. Shapiro, Paul A. Abbott, Christopher M. Stothers, Seth D. Weisberg and Richard A. Killworth. The abstract reads as follows:

"Legal context. The past quarter of a century was a time of strong and increasing patent protection in the US. But recently, in the face of pressure from the business community, scholarly studies, US Supreme Court opinions, and threats of Congressional action, US courts have narrowed patent protection in a wide variety of ways. This article explores the specifics of that reversal.

Key points. Recent court decisions have overturned a variety of pro-patentee rules in litigation, facilitating patent invalidation, reducing patent coverage and the availability of important remedies for infringement, and cutting the power of juries in patent cases. The result is a rapid and wide-ranging retrenchment--essentially “patent reform” without Congressional participation. Particularly affected are non-practising entities, which are more vulnerable to validity challenges and, in most cases, have lost the strongest weapon in their armoury for licensing negotiations--the chance to obtain an injunction against infringers. Holders of business method patents and small-entity patent holders also suffer disproportionately from the changes.

Practical significance. The article summarizes the facets of US patent protection affected by the recent decisions and discusses the consequences of the changes for current (and potential) US patent holders and producers/traders active in, or selling to, the US".

Subscribers to the online version of JIPLP can access it already, and the printed version will be published soon.  Non-subscribers can access it on a pay-per-view basis by clicking here and scrolling down to ''Purchase short-term access".

Why European patent court, unitary system must be linked

PatLit doesn't normally reproduce or offer links to materials available on other weblogs, but every rule has its exception. "Little Hope for an EU Patent Court after the CJ Opinion", written by the distinguished German scholar and practitioner Jochen Pagenberg (Bardehle Pagenberg, right), was first posted on the EPLAW Patent Blog here but deserves a wider readership.  This is because it has been carefully thought out by an author who has read and considered both the Advocates Generals' Opinion and Court of Justice ruling and has measured the implications of these documents against his own experience as a skilled and seasoned patent practitioner who has worked closely enough with users of the patent system to know what they want -- which is a lot more than can be said for those who press for (or oppose) solutions on grounds based on political expediency or administrative convenience.

The title is itself an eloquent summary of the author's view of the situation.  In the concluding passage of the final part of his piece, headed "Consequences and remedies?", he writes (with PatLit's emphases added in red):

"3. No segregation of unitary patent and court system

It would certainly require some time, negotiations, expert discussions and perhaps even a user survey before the new goals will become clear. It would therefore be a dangerous mistake to segregate now the legal instruments for the Unitary patent from the discussion of the court system. If one talks to users one will hear that they will not file one single Unitary patent as long as there is no court system in place. The above considerations show that it may still be a long way with a high probability of failure. Therefore, it would certainly not be wise to risk another defeat for a project as important as this.

It remains that the CJ obviously has closed the door for joining non-EU countries in the patent litigation system as it has been discussed so far. It has also expressly excluded EPC patents from its Opinion. Therefore the solution of an international court for EPC patents – at least as a first step for a common international patent court in Europe – comes again into focus, since the serious political and legal restrictions of the EU rules would not apply.

Users should therefore urge the Commission and the member states not to hastily conclude the Enhanced Cooperation agreement without having found an acceptable solution for the litigation system . In this context it should be examined in particular how the rules envisaged under the Unitary patent could prevent the result that substantive patent law, not only as far it is now contained in the EPC, would become part of the EU legal order so that patentability requirements, questions of patent scope etc. would be interpreted in the future by judges without patent experience. Also this question is a serious concern of users and requires a thorough debate before any project can be properly evaluated by industry. It is difficult to accept if under an international court a body of generally accepted EPC case law is further developed which a decade later is threatened to be overturned by a court system which is intended to create its own substantive patent law. Such strategic and organisational questions must also be touched now so that the overall aim is not lost out of sight".

Uncle Sam v False Patent Marking

PatLit is pleased to host this item from an American IP enthusiast Miclelle Umansky, who is currently enjoying her postgraduate IP studies at Queen Mary, University of London.  Michelle writes:

Uncle Sam v False Patent Marking

Across the pond, Uncle Sam has been battling false patent marking since 1946 with the help of United States Code, Title 35. While some undertakings wish to market their products by prominently displaying a patent marker, there can be situations where entities may use patent markers with the intent of deceiving the public. Moreover, 35 U.S.C., § 292 covers claims where an invalid, expired or inapplicable patent has been applied.  A myriad of issues have arisen during such claims – specifically, in relation to the requirement of intent (Federal Rules of Civil Procedure, Rule 9(b)).  Recently, this hot-button topic has been heavily scrutinised because many contend countless cases go unsanctioned due to the difficulty of proving intent to deceive.  In order to ascertain whether such conclusions warrant suspicion as to the effectiveness of the statute, one must rely on the case law. Buckle-up it’s going to be a bumpy ride.

Background: the False Patent Statute

Briefly, 35 U.S.C. § 292(a), states: 

"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 . . . [s]hall be fined not more than $500 for every such offense."

 The statute addresses (a) infringers using existing patent numbers; (b) individuals who mark unpatented items as patented and (c) the exploitation of the term “patent pending” when there has been no application from which to infer pending status. In Forest Group, Inc. v Bon Tool Co., No. 2009-1044 (Fed. Cir. Dec. 28, 2009), the court concluded that the term “each offense” meant the $500 penalty could apply “per article”. Monetarily raising the stakes quite high is a chilling prospect for defendants but an incentive for qui tam plaintiffs to police against false patent markers.  The Forest Group ruling can be found here.

Secondly, 35 U.S.C. § 292(b), covers standing: 

“Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States. Any plaintiff may address a complaint even if there has been no direct infringement on the part of the plaintiff. “ 

The qui tam right is therefore a provision within the ambit of 35 U.S.C. § 292 and can be initiated by any private individual who wishes to take action against false patent markers.  

Prima facie, this statute seems like it would essentially be the ‘scarecrow’ against any potential infringers but the requisite of Rule 9(b) makes it difficult for qui tam plaintiffs to argue deceptive intent. Rule 9(b) provides:

“In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.”

BP Lubricants USA, Inc.: Requisite for Rule 9(b)

In the latest Order by the Federal Circuit Court in re BP Lubricants USA Inc., Fed. Cir. Misc. Docket No. 2010-960, (Linn J) held the requisite under the Federal Rules of Civil Procedure, Rule 9(b) applies to false patent marking claims.  The case ended up in the lap of the United States Court of Appeal, Federal Circuit after a petition for writ of mandamus due to the objection of dismissal in Simonian v. BP Lubricants USA, Inc., 1-10-CV-01258 (N.D. Ill-01258). 

"The complaint also asserts mostly “upon information and belief,” that (1) BP knew or should have known that the patent expired; (2) BP is a sophisticated company and has experience applying for, obtaining, and litigating patents and (3) BP marked the CASTROL products with the patent numbers for the purpose of deceiving the public and its competitors into believing that something contained or embodied in the products is covered or protected by the expired patent.”

After careful consideration of the general allegations and an amicus curiae brief submitted by the Intellectual Property Owners Association, when applying Rule 9(b) there was no deceptive intent found on the part of BP Lubricant. Moreover, following Exergen Corp. v Wal-Mart Stores, Inc., 575 F.3d 1313, 1328 (Fed. Cir. 2009) the IPO argued:

“[w]ith intent to deceive the public being an essential element of false marking, the heightened pleading requirements of Fed. R. Civ. P. 9(b) should apply. Mirroring its application of Rule 9(b) to allegations of deceptive intent as an element of inequitable conduct [as in Exergen], so too should the Court require claims of deceptive intent in false marking cases to be pled with specific factual support for allegations of who, what, where, how, and why sufficient to support a reasonable inference that the defendant falsely marked with a conscious desire to deceive the public.”

 The Federal Circuit Court held:

“[p]ermitting a false marking complaint to proceed without meeting the particularity requirement of Rule 9(b) would sanction discovery and adjudication for claims that do little more than speculate that the defendant engaged in more than negligent action.”

 Justin E. Gray, IP Litigation Attorney at Foley & Lardner LLP and author of Gray on Claims, illustrates in his blog that since the re BP Lubricants judgment on March 15, 2011 -- there has been a significant decrease in claims filed. For more information, Gray on Claims supplies a false marking chart that is updated daily.

Has Uncle Sam turned a blind-eye towards false patent markers by establishing a high threshold for proving deceptive intent? Or has the court applied Rule 9(b) to stop the claim flood-gates due to qui tam right provision in 35 U.S.C. § 292 in conjunction to the monetary incentive post-Forest Group? In any case, even if courts are hesitant to find the requisite intent for liability, alleged infringers still bear the expense of litigation. Therefore it is imperative that companies remove all expired, invalid, inapplicable patent numbers from their products to avoid the inevitable pricey litigation process. 

 PatLit thanks Michelle for this extremely lucid guidance on a topic that remains beyond the experience and, in some cases, the comprehension, of non-US practitioners.