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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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Putting the public on notice that a product is patented has at least two commercial benefits for the patentee. To consumers, the word “PATENTED” suggests that a product is new, innovative and perhaps better than an unpatented alternative. To would-be competitors, the word “PATENTED” is a warning against copying. These benefits alone provide enough incentive for most manufacturers to mark their patented products. But did you know that there are legal consequences for failing to mark a patented product?

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The federal patent marking statute provides:

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Patentees and persons making, offering for sale or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented….by fixing thereon the word “patent”…In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.

35 U.S.C. §287(a) (emphasis added). Thus, patentees who fail to mark their patented products risk losing years’ worth of damages if an infringement goes undetected.

In a recently issued decision in Arctic Cat Inc. v. Bombardier Rec. Prods., 2020 U.S. App. LEXIS 5023 (Fed. Cir. Feb 19, 2020), the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) addressed patent marking under §287 and announced two new holdings.

Arctic Cat Inc. (“Arctic Cat”) owned several patents directed to steering systems for personal watercraft and licensed those patents to Honda to produce commercial products. Honda began making and selling products covered by the patents but did not mark those products as patented. In fact, the license agreement between Arctic Cat and Honda expressly stated that Honda had no marking obligations.

After years of production, Honda stopped making and selling products covered by the licensed patents. Subsequently, Arctic Cat sued Bombardier for infringement of various claims of the licensed patents. A jury found that Bombardier willfully infringed the asserted claims and awarded damages for a period beginning six years before Arctic Cat filed suit. The trial court, however, ruled that Arctic Cat could not receive any pre-complaint damages due to Honda’s failure to mark in compliance with §287.

On appeal, Arctic Cat argued that the damages limitation of §287 only applies while a patentee or its licensee is actively making or selling patented products and thus did not apply after Honda allegedly stopped selling patented but unmarked products. Arctic Cat further argued that the jury’s finding of willful infringement (i.e., that Bombardier knew of the asserted claims and their infringement) was sufficient to demonstrate actual notice under §287 – thus entitling Arctic Cat to damages even during the period when Honda was selling unmarked patented products. Bombardier argued that Honda’s noncompliance with §287 could only be cured by either beginning to mark or providing actual notice of infringement, which Arctic Cat did not do until it filed the infringement suit.

The Federal Circuit began by reaffirming two well-established points regarding the notice requirement of §287. First, the marking provisions of §287 do not apply until a patentee makes or sells a patented article. Thus, a patentee who never makes or sells a patented article may recover damages even without providing notice of infringement to an alleged infringer. Second, a patentee’s licensees must also comply with §287.

The first novel question on appeal was whether Arctic Cat came into compliance with the notice requirements of §287 once Honda stopped selling unmarked patented articles. The Federal Circuit answered in the negative, holding that once a patentee (or its licensee) begins making or selling a patented article, the notice requirement of §287 attaches, and the cessation of sales of unmarked products does not excuse noncompliance. A patentee can only cure a failure to mark – and thus begin recovering damages – by providing actual notice of infringement or by beginning to mark patented products. As the Federal Circuit explained, this rule incentivizes a patentee who has sold unmarked products to begin marking. A rule to the contrary would allow a patentee to switch the notice requirement on and off simply by starting or stopping the sale of patented products.

The second novel question on appeal was whether Bombardier’s willful infringement was enough to satisfy the actual notice requirement of §287. Again, the Federal Circuit answered in the negative because actual notice under §287 requires the affirmative communication of a specific charge of infringement by a specific accused product. The focus, according to the Federal Circuit, must be on the action of the patentee, not the knowledge of the infringer. It is irrelevant under §287 whether the accused infringer already knew of the patent or knew of the infringement. Actual notice under §287 requires performance by the patentee.

Because the notice requirements of §287 apply equally to a patentee’s licensees, patent marking should be addressed in any patent license or other agreement regarding the manufacture or sale of patented articles.

Once a patentee (or its licensee) begins making or selling a patented article, the notice requirements of §287 attach and the cessation of sales of unmarked products does not excuse noncompliance. A patentee who begins selling unmarked products can only cure noncompliance by either providing actual notice of infringement or by beginning to mark its products in accordance with §287.

Willful infringement is not a substitute for actual notice, which requires an affirmative communication of a specific charge of infringement by a specific product.&nbsp;

Thompson Hine Can Help By:

Jeffrey C. Metzcar 937.443.6841 <a href="mailto:Jeff.Metzcar@ThompsonHine.com">Jeff.Metzcar@ThompsonHine.com</a>

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

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https://admin.thompsonhine.com/wp-content/uploads/2022/05/Intellectual_Property_Update_-_Patent_Marking_-_Noncompliance_not_Cured_by_Willful_Infringement.pdf

Patent Marking – Federal Circuit Clarifies Noncompliance is not Cured by Ceasing to Sell Products or by Willful Infringement

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