Legal News

False Marking Mania: The Latest Boom in Lawsuits

By Ashby Jones

Any law students out there wondering what area of the law to bone up on before entering the workforce?

Two words for you, LBers: patents and whistleblowers.

It’s true. According to this interesting story by the National Law Journal’s Sheri Qualters, a recent federal appellate decision has led to a spate of whistleblower suits accusing companies of falsely labeling their products as covered by patents.

In December, a ruling by the Federal Circuit increased the potential fines in so-called “false marking” cases. The old penalty was $500; the new penalty, according to the story, could range anywhere from “hundreds of thousands” to “even millions of dollars,” depending on the number of items sold stamped with the bogus patent.

And in these three short months, the decision has nearly become a full-employment act for plaintiffs’ lawyers. So far, lawyers have filed more than 130 new lawsuits. Click here for the NLJ’s handy-dandy chart on the suits. According to the story:

Plaintiffs lawyers say the suits are justified, because the public is harmed when companies label products or packaging with a U.S. patent number that’s expired or does not cover the product’s technology. Defense lawyers charge that these are nuisance suits brought by “bounty hunters.”

You say po-tay-to, they say po-tah-to. Regardless, LBers, you’d better jump on this while the gettin’ is good, because the situation might be going away soon. Qualters reports:

Two pending Federal Circuit appeals would curb such suits. One asks to restrict the right to file suits to those actually harmed by the company’s actions, such as a company’s competitors. The other case will decide how courts should determine a company’s intent to deceive buyers or competitors when it sold products with the false patent information. In addition, a recent amendment to the leading patent reform bill in the U.S. Senate — and a newly filed bill in the U.S. House of Representatives — would allow only competitors harmed by a rival’s false marking, not whistleblowers, to file such suits.

Full post as published by Law Blog - WSJ.com on April 05, 2010 (boomark / email).