March.30.2011
The Federal Circuit recently issued an opinion in In re BP Lubricants USA, Inc., Misc. No. 960, (Fed. Cir. 2011) that applies a heightened pleading standard to false patent marking cases, particularly in cases brought against companies which mark their products with expired patent numbers.
On March 15, 2011, the Federal Circuit granted mandamus in In re BP Lubricants, resolving an issue that had divided District Courts – namely, whether (or to what extent) the particularity requirements of Rule 9(b) of the Federal Rules of Civil Procedure apply to allegations made in a Complaint for false patent marking under Section 292. The Federal Circuit held that the particularity requirements of Rule 9(b) do apply to such contentions. The Federal Circuit explained that "[p]ermitting a false marking complaint to proceed without meeting the particularity requirement of Rule 9(b) would sanction discovery and adjudication for claims that do little more than speculate that the defendant engaged in more than negligent action."
In the underlying case, the plaintiff brought suit for false marking against BP, the manufacturer of CASTROL motor oil. Applying the requirement of Rule 9(b) to the facts of the case, the Federal Circuit held that "a complaint alleging false marking is insufficient when it only asserts conclusory allegations that a defendant is a 'sophisticated company' and 'knew or should have known' that the patent expired."
With this opinion, the Federal Circuit has made clear that plaintiffs must provide some "objective indication to reasonably infer that the [false marking] defendant was aware that the patent expired." Only a few months earlier, the Federal Circuit in another case, Pequignot v. Solo Cup Co., 608 F.3d 1356 (Fed. Cir. 2010), had also ruled that the bar for proving deceptive intent is "particularly high" and requires a showing that the false marker had a "purpose of deceit, rather than simply knowledge that [the marking] statement is false." In conjunction with Pequignot, the Federal Circuit's recent ruling is likely to have a significant impact on how often such false marking claims will be brought in the future, and how successful they may be in getting past the pleading stages of litigation.