False Marking Intent to Deceive may be Alleged Generally Under FRCP 9(b), Regardless of the Deceived "Public's" Sophistication

Defendant's motion to dismiss plaintiff's qui tam false marking action for failing to plead intent to deceive with particularity was denied. "[Plaintiff's] allegations of deceptive intent are sufficient under Rule 9(b), given that those allegations need only be alleged generally. [Defendant] argues its alleged scheme to deceive the public 'stands no rational chance of success' because the '"public" comprises [sic] sophisticated pharmaceutical competitors, who [sic], Plaintiff alleges, without a shred of support, might be "discourag[ed] or deter[red] from commercializing competing products."' Defendant’s argument fails. A valid and enforceable patent generates a zone of exclusivity within which prospective competitors, regardless of their sophistication, cannot operate. A company’s false marking of a product line sends a signal to its competitors, both actual and potential, that that line is subject to intellectual-property protection. Such false signals constitute an impediment to competition, even when they are directed at experienced, business-savvy, and knowledgeable rivals. . . . Even if one were convinced that 'sophisticated' competitors would never be dissuaded by false marking, it is quite clear that Congress did not hold that view. The False Marking Statute makes no reference to the proclivity of a particular instance of false marking to negatively affect competition, and does not purport to exempt false markings that would not deter competitors in a given case."

Simonian v. Allergan, Inc., 1-10-cv-02414 (ILND November 30, 2010, Order) (St. Eve, J.)