Lawyer Finds Empty Cups in Loss Against Solo Cup Co
As discussed in a prior post, a December 2009 ruling by a Federal District Court sharply raised the amount of money that could be awarded to those filing suits against companies for "false marking." False marking is the practice of marking consumer products with patent numbers that are expired, or simply false.
In the aftermath of the ruling raising the potential amount of damages, the number of qui tam suits (those brought in a whistleblower situation by an individual) had risen by April to 175 suits filed.
The case brought by Matthew Pequignot against the Solo Cup Co may put a lid on that expansion.
According to The National Law Journal, Pequignot's suit claimed that Solo Cup marked billions of its products with expired patent numbers. While this fact was found to be true, the court also found the company was not liable for damages because it proved it did not intend to deceive consumers with the markings. Solo produces its marked cups and lids with molds which are very expensive to replace. The company, on the advice of its counsel, would wait to replace the mold containing the outdated patent numbers until it wore out or was damaged. In part, evidence that the company was acting without the intent to deceive was found by the court because the new replacement molds left the number markings blank.
On the practical side of the coin are the potential damages in a case such as this. The Journal notes that the case that started this mini-trend, The Forest Group Inc. v. Bon Tool Co., raised the damages from $500 for a false marking occurrence, to $500 per falsely marked article. In the Solo Cup opinion, the court writes that the damages sought were the $500 penalty on at least 21,757,893,672 articles produced by Solo. The court goes on to point out that the damages figure of $5.4 trillion, shared with the U.S. government, would be enough to pay off 42% of the troublesome federal debt.
However, companies should not assume from this case that an accidental failure to keep their patent registration numbers properly marked on their products will let them off the hook. Kelsey Nix, an intellectual property and litigation partner at Willkie Farr & Gallagher told The Journal companies need to be, "prudent and vigilant about their patent marking. I don't think they can rely on simple inadvertence being enough to escape liability for false marking," he said.
No matter if companies view that statement as the cup half full or half empty, care should be used in how they present their patent claims to the buying public.
- Federal Circuit Ruling Could Stem Tide of Patent False Marking Cases (The National Law Journal)
- Opinion, Pequignot v. Solo Cup [pdf] (FindLaw)
- Whistleblower Suits Against Companies Falsely Claiming Patents Rise (FindLaw's Common Law)
- Government Involvement in Qui Tam Actions (FindLaw)