BP Lubricants has won a US Federal Circuit ruling in a case against false patent marking which could stop a multi-million dollar legal trend.
The case was originally brought to an Illinois District Court by a patent lawyer under False Marking legislation and was the latest is a swathe of similar suits alleging false patent marking because expired patents had not been removed from product packaging.
The legal interest was largely generated by a similar case in 2009 which went in favour of the complainant but, more importantly, intepreted the penalty which was stated as "not more than $500 for every offense" as meaning $500 for each article marked. As a result, patent lawyers and their clients saw telephone-number award opportunities.
However, the latest ruling appears to have put the brakes on the rush for claims after BP Lubricants USA Inc. appealed the Illinois District ruling to the Federal Circuit. The allegations were, in essence, that BP knew (or should have known) that the patent had expired, had the experience and expertise to recognise this and were thus leaving the expired patents in its Castrol product packaging to deliberately decieve the public and its competitors.
However, the Federal Court overturned the original ruling against BP, with leave to amend, based on a number of issues. The most important were that generalised allegations of "knowledge" and "intent" were not sufficiently robust to support the claim; that unless there is clear evidence of a link between factual falsity and a state of mind, a statement of falsity is not enough; and that a purpose for the deceit needs to be demonstrated and not just a knowledge that the statement is false.
The result of the ruling is that a significant number of other similar false marking claims are likely to be struck down as, in essence, the ruling means that claims merely alledging that a defendant is sophisticated and “knew or should have known" that its marked patent had expired are not sufficient to state a claim for false patent marking.
BP Lubricants has stated that it will assist other defendants in having claims dismissed at the pleadings stage, but the Court did recommend that companies should continue to monitor patent expiry dates and package marking and, where products are mismarked, that this is corrected whenever packaging is revised or before being used in marked patent legal cases.