THE PENALTY FOR / FALSE MARKING IS ASSESSED PER / MISMARKED ARTICLE

The Forest Group, Inc., v. Bon Tool Company, [2009-1044] (December 28, 2009)[MOORE, Rader, Plager] The Federal Circuit reversed and remanded the $500 fine against Forest for false patent marking, and affirmed the denial of attorneys fees and the holdings that that Forest had not violated the Lanham Act, that U.S. Patent No. 5,645,515 was not invalid, and was not infringed,
DISCUSSION: The Federal Circuit held that the plain language of 35 U.S.C. § 292 requires courts to impose penalties for false marking on a per article basis, and thus remanded the $500 penalty for district court to impose a per article penalty. The Federal Circuit provided some comfort noting:
This does not mean that a court must fine those guilty of false marking $500 per article marked. The statute provides a fine of “not more than $500 for every such offense.” 35 U.S.C. § 292(a) (emphasis added). By allowing a range of penalties, the statute provides district courts the discretion to strike a balance between encouraging enforcement of an important public policy and imposing disproportionately large penalties for small, inexpensive items produced in large quantities. In the case of inexpensive mass-produced articles, a court has the discretion to determine that a fraction of a penny per article is a proper penalty.
COMMENT: This holding is of particular concern because of indications that mismarking may include statements that a product is “covered by one or more” patents on a list, or that the product is covered by an expired patent. Best Practice: Every patentee should promptly review the patent marking on its products, remove patents that do not cover the product, and consider removing patents that have expired.