Pennsylvania Power Juicer court pans False Marking Statute

by Kurt Schulzke

Thinking of filing a False Marking Statute qui tam?  Big Ten country is not looking so friendly these days. The essence of the False Marking Statute, 35 U.S.C. § 292, is summarized here:

“[W]hoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word ‘patent’ . . . for the purpose of deceiving the public . . . [s]hall be fined not more than $500 for every such offense.” 35 U.S.C. § 292(a). “Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.” Id. § 292(b). A plaintiff proceeding on a false marking claim must therefore “establish (1) the marking of an unpatented article; (2) with the intent to deceive the public.”

In the wake of the Federal Circuit’s court’s pro-qui tam opinion in Forest Grp., Inc. v. Bon Tool Co., 590 F.3d 1295, 1301 (Fed. Cir.2009), qui tam plaintiffs ramped up scrutiny of companies falsely marking products with “patented” labels.  The Forest court famously held that the Statute’s $500 penalty applies to every “article” falsely marked as “patented.”  For products sold through large chains, the math is enough to generate serious enthusiasm.

Enthusiasm may now be tempered by a June 2, 2011 E.D. Pennsylvania decision, Rogers v. Tristar Products, Inc., 5:11-cv-01111-ER (full text accessible below), piggy-backing on a February N.D. Ohio ruling, Unique Prod. Solutions, Ltd. v. Hy-Grade Valve, Inc. (2011 WL 649998).  Both courts held that the qui tam provisions of the False Marking Statute violate the Take Care Clause of the United States Constitution.

In reaching its decision, the Unique court “applied Morrison’s* sufficient control test to the [False Marking Statute] and found that section 292(b) unconstitutionally delegates prosecutorial authority to private citizens.”  The Rogers court — in a case in which the defendants were found to have falsely marked Jack LaLanne Power Juicer products** as embodying “Special Patented Extraction Technology” — agreed and therefore dismissed the plaintiff’s claim.

The Rogers opinion is a worthwhile read for anyone defending or prosecuting a False Marking Statute qui tam. Taken together, the two decisions — in Ohio and PA — raise questions regarding the constitutional viability of what the Forest court called the “cottage industry of false marking litigation.”

*Morrison v. Olson, 487 U.S. 654 (1988).

** The court noted that Power Juicer products “have been successful, exceeding $300 million in sales.”

Previous post:

Next post: