Thursday, March 10, 2011

False Marking Complaint Alleging Due Diligence, Prior Litigation, and Financing Activities Concerning Falsely Marked Products

and Patents Sufficiently Pleads Intent to Deceive

The court denied defendant's motion to dismiss plaintiff's qui tam false marking action for failure to state a claim, because allegations that defendant previously conducted due diligence activities with respect to the patents gave rise to an inference of intent to deceive. "Plaintiff has alleged a chain of assignments concerning the now-expired patents . . . before being ultimately assigned to [defendant]. This chain of assignments supports Plaintiffs assertion, based upon information and belief, that [defendant] performed due diligence on the patents it was acquiring, which would have given it a working knowledge of the expiration dates and scopes of the patents. Plaintiff further alleges that [defendant] has been accused of infringing patents . . . pertaining to [the falsely marked products]. This allegation also supports Plaintiffs assertion, based upon information and belief, that Plaintiff studied the features of its [products] in response to the litigation and knew or should have known that its products were not covered by [one of the patents-in-suit]. . . . Plaintiff asserts that [defendant] used two of the three . . . patents identified in the pleadings as collateral to secure a loan . . . . [T]he fact that [defendant] used these patents for loan collateral supports Plaintiffs assertion, made upon information and belief, that [defendant] knew or should have known the expiration dates of the relevant patents."

Brinkmeier v. Graco Children's Products Inc
., 1-09-cv-00262 (DED March 7, 2011, Order) (Stark, M.J.).

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