U.S. Sides with False Marking Defendants and Urges Strict Compliance with Fraud Pleading Requirements -by Jim Lennon

The United States filed an amicus brief on Wednesday (October 20th), supporting the petition of false marking defendant, BP Lubricants, to obtain a writ of mandamus compelling dismissal of the suit filed by Thomas Simonian in the North District of Illinois. The positions in this brief are somewhat surprising because the United States interests are generally aligned with false marking qui tam relators. After all, the government splits any award obtained with the relator.

It appears, however, that the United States is finally acknowledging publicly that the trend of suits under 35 USC 292 has gone too far, given the rash of thinly pled false marking claims that have come to dominate the landscape since the Federal Circuit’s decision in Forest Group v. Bon Tool, at the end of last year.

Earlier this year the United States supported Stauffer, the false marking relator that convinced the Federal Circuit to reverse the dismissal of his suit against Brooks Brothers on the question of standing based the allegations of harm. The United States favored a stay of litigation in San Francisco Technologies v Adobe, et al., in the Northern District of California this spring to await the Federal Circuit’s decision in Stauffer.

Now the Federal Circuit has line up squarely against Simonian in this matter. “The position of the United States is that, consistent with other cases "sounding in fraud," False Marking cases should be subject to the pleading requirements of Rule 9(b).” The United States goes on to explain that while intent to deceive may be averred generally, pleadings must still “allege sufficient underlying facts from which a court may reasonably infer that a party acted with the requisite state of mind." In this vein, the United States rejects the attempt by Simonian to obtain this inference by merely pleading that a defendant is a "sophisticated company" which "knows, or should know" that the patent at issue had expired. It argues that these types of allegations are insufficient to satisfy Rule 9(b)'s pleading standard, even if relaxed.

United States’ brief strikes a tone that will resonate with most false marking defendants and may foreshadow the clarification of the high standard for pleading false marking that these defendants have been asserting in countless Rule 12(b)(6) motions over the last year.

-Jim Lennon is patent attorney with Womble Carlyle Sandridge & Rice, PLLC, in Wilmington, Delaware.