While patent owners wait for Congress to amend the false marking statute, plaintiffs continue to file cases seeking damages for falsely marked products, such as with patent numbers that do not cover the product or with patents that have expired.
In one case filed last year, Alchemy Asset Services alleges that GlaxoSmithKline has marked its Fiber Choice product with expired patent numbers. GSK responded with a motion to dismiss based on the fact that false marking cases are required to be pled with particularity, meaning the complaint requires a specific recitation of the facts that set forth the cause of action, similar to the requirement for cases alleging fraud. The magistrate judge in the case recommended that the court grant GSK’s motion to dismiss on this basis.
GSK also argued that the false marking statute is unconstitutional under Article II, Section 3 of the Constitution. For those not familiar with this provision, it sets forth the authority of the Executive Branch of the Government. Specifically, the provision of this section at issue is the requirement that the president “shall take Care that the Laws be faithfully executed.” This is known as the “Take Care” Clause. By delegating enforcement of the false marking statute to private citizens, so the argument goes, Congress has delegated an executive function. This it cannot do under the Constitution.
These types of actions, where enforcement of a law is permitted by a private citizen who then shares in the penalty enforced by the law, are called qui tam actions. Most qui tam actions have been repealed or amended by Congress; the Patent Act’s false marking statute is one of the few that remain.
The constitutionality of many of these statutes has been challenged in the past and upheld. Many courts have used an “executive control” test in upholding the constitutionality of such statutes. If the Executive Branch, usually the Attorney General, has the right to be notified, to intervene, and to take over such cases, they pass constitutional muster.
In this case, GSK argues that the false marking statute does not contain any such “executive control” protections. Without these protections, the Executive Branch does not have any control or say in the cases. Thus, the statute is unconstitutional under the Take Care clause. The Federal Circuit specifically declined to address this question last year in Stauffer v. Brooks Brothers, Inc. because it was raised in an amicus brief. It was not argued by either party or decided by the district court.
Law360 (subscription service) reports that the court in the GSK case has granted the government’s motion to intervene to submit a brief on the constitutionality of the false marking statute. The plaintiff in that case has stated that it welcomes the intervention and believes that the government will support the contitutionality of the statute.