In the ongoing saga of the false marking cases . . .
Today, the Federal Circuit issued a wirt of mandamus ordering the district court to dismiss a false marking case in In re BP Lubricants USA Inc. The court held that, like inequitable conduct, particular facts relating to allegations of false marking must appear in the initial complaint.
In most cases in Federal Court, the initial complaint is only required to put the defendant on notice of the plaintiff’s allegations. These pleadings are often quite short on facts and merely point to the statute and the facts that give rise to the cause of action in a very general manner. The particular facts of the case are then developed during discovery through interrogatories, document production, depositions, and the like.
Federal Rule of Civil Procedure 9(b) requires that allegations of fraud or mistake must be pled with particularity of the circumstances constituting the fraud or mistake, while the intent or knowledge of a person’s mind may be pled generally. The Federal Circuit previously held that this provision applies to inequitable conduct allegations because these are generally allegations of fraud on the Patent Office. Today, the court held that Rule 9(b) also applies to false marking allegations.
In this case, the district court did not rule otherwise, but ruled that the plaintiff had met its burden. The complaint alleged that (who) BP had deliberately and falsely marked (how) at least one line of motor oil products (what) with expired patents and continues to so mark (when) throughout the US (where) with intent to deceive competitors and the public. The district court said that this was sufficient under Rule 9(b). The Federal Circuit disagreed.
The Federal Circuit found the complaint deficient because it did not allege any facts regarding BP’s knowledge of the expiration of the listed patent. The plaintiff argued that BP was a sophisticated company with a lot of experience with patents. This is simply not sufficient to meet the requirements of Rule 9(b). There must be some allegation that the defendant knew the patents had expired or otherwise intended to deceive the public.
The Federal Circuit thus ordered the case dismissed. Given that the case presented an issue of first impression, the court did grant the plaintiff leave to re-file the case provided it can meet the requirements of Rule 9(b) and provide particular facts related to BP’s state of mind.
March 21, 2011 at 1:36 am |
Here is a similar story
If nothing else, the onslaught of false marking suits has and will continue to lead to publicity that will result in fewer items being mis-marked – even if Congress leaves section 292 intact. What I find curious is that in Pequinot, the CAFC said it’s up to $500 per falsely marked item; but it also made clear that the trial court had discretion to set the amount exceedingly low. That second part seems to have been ignored by defendants. A few courts saying that each instance of false marking is worth, oh, 10^-12 cents ($ 0.00000000000001) would take much of the threat out of such suits…although in the absence of potential sanctions against the plaintiffs, it may still be cheaper to settle. God bless the U.S. judicial system.
March 21, 2011 at 6:06 am |
[...] False marking must be pled with particularity: In re BP Lubricants USA Inc (Inventive Step) (IPBiz) (271 Patent Blog) (Gray on Claims) (Patent Law Practice Center) (Patently-O) (IP [...]
March 23, 2011 at 11:54 pm |
[...] Inventive Step Blog provides an overview of the case. PatentlyO presents a brief legal analysis on why this decision [...]
March 26, 2011 at 1:09 am |
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