Federal Circuit Confirms Individual’s Standing to Sue For False Patent Marking

In an August 31, 2010 decision the Court of Appeals for the Federal Circuit reversed a lower court decision dismissing a false marking action on the plaintiff’s lack of standing, Stauffer v. Brooks Brothers, Case No. 2009-1428, August 31, 2010. This is one of the increasing number of qui tam actions being brought by individuals for violations of 35 U.S.C. § 292. The plaintiff in this case is a patent attorney who bought bow ties from Brooks Brothers that had a locking mechanism marked with numbers of patents that expired in the 1950s. The statute itself says that “any person” may sue to collect the penalty for false marking with one-half of the recovery going to the plaintiff and the other half to the United States government. In dismissing the action, the district court held that Mr. Stauffer had not alleged that the United States had suffered any injury in fact which he was required to do as the government’s implicit assignee of the action to recover for injury. In reversing the district court, the Federal Circuit held that by enacting section 292 Congress defined injury in fact to the United States to be a violation of the statute. The Court said “Because the government would have standing to enforce its own law, Stauffer, as the government’s assignee also has standing to enforce section 292.” Thus, the cottage industry of filing false marking actions against companies that mark their products with numbers of patents that do not actually cover the product, or have expired, thrives. Efforts to deal with such litigation through Congressional action is not likely to result in change very soon. The issue is not likely to have much traction considering the other matters on the Congressional plate.