“This Product Is Covered by My Patent”–the Importance of Patent Marking

By Mitchell S. Feller

U.S. Patent law provides that a patent owner can recover at least a reasonable royalty for infringement damages and can obtain damages for infringement occurring up to six years before an infringement lawsuit is filed (provided the patent was in force at the time). 35 U.S.C. 284, 286. However, by failing to take simple steps to comply with patent marking requirements, many companies eliminate their right to recover pre-suit infringement damages.

U.S. law requires that a patent owner that makes, offers for sale, sells, or imports a patented product is required to “mark” the product (or its packaging if the product itself cannot be marked) with the word “Patent” or “Pat.” followed by either the relevant patent number(s) or an internet link to a webpage listing the patents. 35 U.S.C. 287. While the marking requirement does not apply to a company that is not practicing its patent, marking obligations still extend to patent licensees. A licensor must at least make “reasonable efforts to ensure compliance” by a licensee with the marking requirements for products covered by the patent and made under license. Maxwell v. J. Baker, Inc., 86 F.3d 1098 (Fed. Cir. 1996).

While patent marking is often seen as a low priority item and easy to overlook, the law is clear that when a company asserts its patent but has failed to properly mark its covered products, “no damages shall be recovered” for infringement that occurs before the accused infringer received actual notice of the infringement. In many cases, a defendant does not receive actual notice of the alleged infringement until they are served with complaint itself. The impact of failing to comply with the marking requirement can be significant, particularly when there are large pre-suit damages and when the patent has little or no life remaining or can easily be designed around.

In one example, a California court recently ruled on summary judgment that dozens of models of accused lighting products sold between August 2008 and March 2014 infringed an asserted patent that expired in March 2014. The lawsuit itself was not filed until August 2014 and so only pre-suit damages were available. However, the plaintiff failed to properly mark its own covered products. The court found that the defendant did not receive actual notice of the asserted patent until the lawsuit was filed in August 2014. As a result, the court barred plaintiff’s entire damages claim. Juno Manufacturing, LLC v. Nora Lighting, Inc. (C.D. Cal. August 13, 2015).

Failing to require licensees to mark can be equally costly. For example, in a recent New York case, a company accused the Barnes and Nobel Nook™ e-reader of patent infringement. The court barred the patent owner from recovering damages for infringement that occurred before Barnes and Nobel received actual notice of infringement because the patent had been previously licensed to Amazon but there was no evidence that Amazon had marked its Kindle™ e-readers with the patent number, even though the plaintiff had argued the Kindle was covered by the patent. Adrea, LLC v. Barnes & Nobel, Inc. et al. (S.D.N.Y. July 1, 2014). In a post-trial order, the Court explained that the clear language of the marking statute barring all pre-notice damages justified extending the bar to the period before the plaintiff first licensed the patent, even though the marking obligation did not yet apply. (Other courts in similar situations have taken a different view, barring pre-notice damages only during the period when marking was required and not performed.)

Whether a patent owner or a licensee is required to mark is not always a straightforward issue. Patents can have apparatus (system) claims, method claims, or both. Marking is not required for patents that only have method claims.

This makes some sense since for a method claim, there is no product to mark. If the patent has both method and apparatus claims, marking is required. E.g., ActiveVideo Networks, Inc. v. Verizon Communications, Inc., 694 F.3d 1312 (Fed. Cir. 2012). Even then, there is a twist in how the requirement is applied. If a patent that has both method and apparatus claims is asserted in litigation, a failure of the patent owner (or licensee) to mark does not bar pre-notice damages if only the method claims are asserted. Crown Packaging Tech., Inc. v. Rexam Beverage Can Co., 559 F.3d 1308 (Fed. Cir. 2009). This provides a way for a plaintiff to limit the impact of a failure to mark but this solution is tempered by the fact that the method claims might not be the strongest ones to assert and may allow the introduction of non-infringement defenses that do not apply to system claims (such as for method claims that requires the participation of multiple parties).

There are several steps that can be taken by a company or outside patent counsel to help prevent marking failures:

  • Keep track of patent applications that are filed on inventions related to new products. When the patent issues, check the claims against those products to determine if marking is needed.
  • Periodically review new products and patents to determine if marking or updated marking is needed. Virtual marking by a web page makes updates easier but the page must still be maintained.
  • Be consistent in how products are marked. Inconsistent marking of some covered products but not others may not be enough to comply with the marking law.
    Require patent licensees to mark covered products and put reasonable procedures in place to ensure compliance.

Companies in litigation should consider marking issues early in the case:

  • A plaintiff should investigate potential marking issues before filing suit to determine the impact of a failure to mark on potentially recoverable damages–particularly where the potential damages are mostly from pre-suit activities. A patent plaintiff who knows of marking problems can also proactively choose to assert method claims to avoid a bar on damages from a failure to mark.
  • For a defendant, a strong marking defense can drive a settlement if pre-suit damages are a substantial part of potential exposure. Seek early discovery of other licenses of the patents to investigate whether the license agreements require marking and whether the licensees have complied–particularly if the plaintiff is engaging in a patent assertion campaign and has entered into numerous prior settlements. A strong marking defense can also be used to limit an infringement suit to method claims, which may make it easier to apply other legal defenses.

Patent marking is easily overlooked by companies in the rush to release products or to license their IP. Complying with the marking requirements is an important step for a company to take to preserve the value of their patents. Likewise, marking can be an important and potentially dispositive issue to consider in litigation.