On December 28, 2009, the U.S. Court of Appeals for the Federal
Circuit issued a decision that is a significant development for
patent owners and licensees. In Forest Group, Inc. v. Bon Tool
Co., No. 2009-1044 (Fed. Cir. Dec. 28, 2009), the Federal
Circuit interpreted the false marking provisions of U.S. patent law
in a way that greatly expands the potential liability of patentees,
their licensees, and other parties in product manufacturing and
distribution chains. The Federal Circuit held that the false
marking statute imposes a penalty of up to $500 per
article that is marked with an incorrect patent number for
the purpose of deceiving the public.
Because the statute provides that any person
may sue for the penalty and split any award with the federal
government, this decision likely will encourage suits by plaintiffs
seeking windfall damage awards. In response to this decision,
patentees and licensees should reevaluate their internal procedures
for placing patent
