Simonian Reloads with Amended False Marking Complaints, But Will They Pass Muster?

Since December 30, 2009, enterprising plaintiffs have filed more than 180 false marking cases. Approximately 84% of the new cases allege expired patents as the basis for the false marking claim. Leading the charge is Thomas Simonian of Geneva, Illinois who has filed 37 cases against 43 defendants claiming expired patents as the basis for his false marking claims. Yet, as the number of new expired patent cases continues to grow, many unanswered questions remain, including whether an expired patent may serve as the basis for a false marking claim.

The answer may turn on how the courts define the “public” for purposes of the false marking statute. Although not explicitly addressing the issue, the Federal Circuit appears to view the relevant public as including potential competitors. For example, in Forest Group, Inc. v. Bon Tool Company, 590 F.3d 1295 (Fed. Cir. 2009), the Federal Circuit explained that false marking may “deter innovation and stifle competition in the marketplace” and “cause unnecessary investment in design around or costs incurred to analyze the validity or enforceability of a patent whose number has been marked upon a product.” Defining the public in this manner creates a problem for plaintiffs. Judge Brinkema said it best in Pequignot v. Solo Cup Company, 1-07-cv-00897 (VAED):

When a product is marked with an expired patent number, any person with basic knowledge of the patent system can look up the patent and determine its expiration date, reducing the potential for being deceived.

To the extent the relevant public consists of potential competitors, Judge Brinkema’s observation seems right on target. Are potential competitors likely to be deceived by an expired patent number when the fact of expiration can be determined quickly and easily via free online information?

The difficulty of answering this question apparently has not been lost on Mr. Simonian. He recently filed amended pleadings in several of his cases that appear designed to refocus the inquiry from potential competitors to consumers. Specifically, Mr. Simonian has included the following new allegations:

The expiration date of a U.S. Patent is not readily ascertainable by members of the public at the time of product purchase. The patent number itself does not provide members of the public with the expiration date of the patent. Basic information about a patent, such as the filing, issue and priority dates associated with a particular U.S. patent number are available at, for example, the website of the United States Patent and Trademark Office, (“USPTO”). However, access to the Internet is necessary to retrieve that information (meaning that a consumer may not have the ability to retrieve the information while he is in a store making a purchasing decision) and even after retrieving that information, it does not include the expiration date of a patent. Rather, a member of the public must also conduct a burdensome legal analysis, requiring specific knowledge of U.S. patent laws regarding patent term expiration ... Notably, a correct calculation of the expiration date must also account for at least: a) any term extensions granted by the USPTO, which may or may not be present on the face of the patent, and b) whether or not the Patent owner has paid the necessary maintenance fees.

Simonian v. Novartis Animal Health US, Inc., 1-10-cv-01267 (ILND) Amended Complaint filed April 27, 2010.

Mr. Simonian’s new allegations have some initial appeal. Unlike potential competitors, most consumers lack the desire or means to check the expiration date of patent numbers at the point of purchase. Lacking this corrective information, they are vulnerable to being deceived. Problem solved? Maybe not.

Focusing on the consumer at the point of sale might avoid one problem, but it raises another: To what extent, if any, does marking a product with a patent number impact a consumer’s purchasing decision? While this question could no doubt provide fodder for vigorous competing expert opinion, the author submits that the answer in nearly every instance is none. If that’s the right answer, then it’s difficult to see how consumers would be deceived by incorrect patent marking. Traditional notions of fraud and deception generally require some form or reliance and reliance is lacking if consumers don’t care about patent numbers or expiration dates.

As the law of false marking continues to develop, these are only a few of the interesting questions that will be addressed. If nothing else, Mr. Simonian’s new allegations take us one step closer to some answers.

To view all currently active False Marking cases, please see our complimentary charts at Gray On Claims.