Friday, September 3, 2010

Illinois Courts Grapple With Pleading Standard for Intent to Deceive Element of False Marking Claims

Defendants' motion to dismiss plaintiff's qui tam false marking action for failure to state a claim was granted. "[T]his Court aligns itself with those courts that have applied Fed. R. Civ. P. 9(b) standards to Section 292(b) complaints. That statute invalidates false patent marking 'for the purpose of deceiving the public' -- a quintessential claim of fraud, with its tightened standard of pleading. . . . So the 'information and belief' allegation of intent to deceive now set out in [plaintiff's complaint] does not cut it, particularly when [plaintiff] attempts to rely on a nine-year-old statement on behalf of [one of the defendants] in an FTC proceeding that referred to its having been represented by a lawyer who was a 'well-known expert. . . in the [relevant] industry'. . . ."

McNamara v. Natural Organics, Inc. et al., 1-10-cv-03544 (ILND September 1, 2010, Memorandum Order) (Shadur, J.)

Defendant's motion to dismiss plaintiff's qui tam false marking action for failure to state a claim was denied. "Plaintiff’s complaint alleges that [defendant] 'is a sophisticated company' with 'years of experience applying for, obtaining, and litigating patents.' Plaintiff further alleges that [defendant] has 'in-house attorneys who regularly litigate or oversee litigation of patent infringement cases and who regularly prosecute or oversee patent prosecution.' Plaintiff alleges that . . . [defendant] intentionally included the expired patent on the products for the purpose of deceiving the public. Whether or not the particularity pleading requirement of Federal Rule of Civil Procedure 9(b) applies in this case . . . the Court concludes that plaintiff’s allegations are sufficient at this stage to state a claim."

Simonian v. Irwin Industrial Tool Company, 1-10-cv-01260 (ILND August 27, 2010, Order) (Lindberg, J.)

Defendants' motion to dismiss plaintiff's qui tam false marking action for failure to state a claim was denied. "[D]efendants' argument that Rule 9(b) requires that intent be pleaded with particularity is lacking in merit; the Rule expressly provides that 'intent, knowledge, and other conditions of a person's mind may be alleged generally.'"

Luka v. Revlon, Inc. et al., 1-10-cv-02509 (ILND September 1, 2010, Minute Entry) (Kennelly, J.)

1 comment:

Bob Matthews said...

The Federal Circuit's remand can be viewed as implicitly ruling that Rule 9(b) applies to false marking claims. The court stated:

“We remand for the court to address the merits of the case, including Brooks Brothers’ motion to dismiss pursuant to Rule 12(b)(6) ‘on the grounds that the complaint fails to state a plausible claim to relief because it fails to allege an ‘intent to deceive’ the public—a critical element of a section 292 claim—with sufficient specificity to meet the heightened pleading requirements for claims of fraud imposed by’ Rule 9(b).”
Stauffer v. Brooks Bros., Inc., __ F.3d __, __, 2010 WL 3397419, *6 (Fed. Cir. 2010)