Amanda Carpenter is a JD Candidate at Osgoode Hall Law School.
The United States Court of Appeals for the Federal Circuit has recently decided the case of Pequignot v. Solo Cup Co. between Matthew Pequignot, a licensed patent attorney, and the Solo Cup Company (“Solo”), a company that manufactures disposable cups, bowls, plates, and utensils. Pequignot brought this action alleging that Solo had, for the purpose of deceiving the public, falsely marked its products with patent numbers as well as indicated that their products “may be covered” by a patent despite knowing that their patents had expired.
The expired patents owned by Solo covered plastic drink cup lids. After the patents were issued, Solo marked their disposable lids with an indication that they were covered under these patents in order to give notice to the public. When these patents expired, Solo became aware that it was marking its products with expired patent numbers and sought legal advice. They were advised that as long as they did not have an ‘intent to deceive the public’ there was no liability; however, they were also encouraged to remove the expired patent marking as soon as possible. Solo sought legal advice since the “false marking” statute, 35 U.S.C. 292 provides:
(a)… Whoever marks upon … in connection with any unpatented article, the word “patent” or any word or number importing the same is patented, for the purpose of deceiving the public;
…
Shall be fined not more than $500 for every such offense.(b) Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.
Because removing the expired patent marking would have required the costly and burdensome replacement of the equipment used to make the lids, Solo decided to wait until the equipment needed to be replaced due to wear or damage, and then build new equipment that would not include the expired patent marking. As well, the indication “This product may be covered by one or more U.S. or foreign pending or issued patents. For details, contact www.solocup.com” was affixed to packaging since the contents of some of the packaging was patented and some of it was not (such as the lids) in order to give adequate notice to the public.
Pequignot then brought this action alleging that Solo had falsely marked its products. The Court of Appeals decided that the lids previously protected by patents that have since expired were indeed considered to be “unpatented articles” according to the “false marking” statute. As the district court pointed out, “an article that was once protected by a now-expired patent is no different [from an article] that has never received protection from a patent. Both are in the public domain.” Thus, the products that were once covered by now-expired patents were therefore “un-patented” within the meaning of the statute.
However, the false marking statute also requires that the marker act “for the purpose of deceiving the public.” Here the court decided that the combination of marking unpatented products as patented and the knowledge that the statement was false created a rebuttable presumption of intent to deceive the public, rather than irrebuttably proving such intent. The court agreed with Solo that it had successfully rebutted the presumption since it provided credible evidence that its purpose was not to deceive the public with the expired patent markings. This evidence consisted of good faith reliance on the advice of counsel and the desire to reduce costs and business disruption.
As well, Solo rebutted the presumption of intent to deceive with the “may be covered” language since it stated exactly the true situation; the contents of some of the packaging were covered by patents, and the contents of some of the packaging were not covered. The language was added to all packaging because the alternative was inconvenient from a logistical and financial perspective.
Finally, since the Court of Appeals affirmed the district court’s finding that Solo had no intent to deceive the public, the question of the meaning of “offense” was moot. The determination of what “offense” meant was relevant since Pequignot accused Solo of falsely marking at least 21,757,893,672 articles, and sought an award of $500 per article, one half of which would be shared with the United States.
In conclusion, the Court of Appeals affirmed the district court’s finding of no liability since it was not shown that Solo had the requisite intent to falsely mark its products. As well, the Court of Appeals decided that the district court’s determination of the meaning of the word “offense” was moot since it was found that there was no liability.