Federal Circuit Raises Stakes In False Patent Marking Cases

The economic downturn has led to a surge of actions for false patent marking. These lawsuits are largely brought by patent attorneys, either on their own behalf or on behalf of holding companies they form, to collect a bounty from patent owners on products with allegedly false patent markings.

The Federal Circuit further incentivized and raised the stakes in such cases in its recent decision in Forest Group v. Bon Tool Co., No. 2009-1044 (Fed. Cir. Dec 28, 2009), in which it held that the statutory penalty for false marking — up to $500 — is assessed on each article that is falsely marked, thereby creating the potential for astronomical liability.

The false marking statute has been in existence for more than 100 years but, until recently, lay largely dormant. The statute permits "any person" to sue for false marking and provides up to a $500 bounty for "each such offense." 35 U.S.C. § 292. There had been considerable debate as to whether this language referred to