Patent marking requirements can have a major effect on a patent owner’s ability to collect pre-lawsuit damages. Back in 2011, Congress added a new alternative to physically marking products with patent numbers: virtual marking by website. But courts have provided little to no guidance on what is required to satisfy the new virtual marking requirements.
That changed with the Aug. 28 decision from Delaware, one of the most active patent venues in the country, in Mfg. Res. Int’l v. Smartscapes. The court found a plaintiff’s website failed to comply with the marking requirement, and provided a reason for patent owners and licensees to review their website marking notices to ensure they are sufficient.
Among changes to U.S. patent law enacted under the American Invents Act (AIA) were amendments to the patent marking statute, 35 U.S.C. §287. Before the AIA went into effect in 2011, the statute only provided physical marking of patented articles, such as “Pat No. 7,651,321.”
The AIA amendment added the option of “virtual marking.” With virtual marking, the patent owner simply marks its product with the words “patent” or “Pat.” together with the web address of a website accessible to the public, such as www.company.com/patents. The website in turn associates the products with the patents, effectively giving the public with notice similar to the notice provided with the pre-existing physical marking.
One benefit of virtual marking is that, if new patents issue covering an existing product, the change can be readily incorporated by adding the patent to the website, without changing the physical marking of the product.
Proper marking can be very important to patent owners because failure to properly mark can severely restrict damages available from an infringer. In some cases, if there is a failure to properly mark, damages may be unavailable for any infringing sales before a complaint is filed. Even if the infringer had been infringing for several years before it was sued, all the pre-suit sales are essentially royalty free if there was a failure to mark.
In Smartscapes, the plaintiff used various versions of a patent marking website. The court focused on one version which listed 94 patents, including 77 United States patents. The website did not list specific products of the plaintiff. At the bottom of the list of patents, the website states, “one or more of the above listed . . . patents may be used by [licensee] products under license from [patent owner].” Other versions of the website titled the patent list with “[patent owner] LCD display patents.”
Don’t Create a ‘Research Project’ for the Public
The court found that this effort at virtual marking on the website of the plaintiff failed to meet the requirements of the marking statute. The court emphasized that the marking statute requires the website (or “internet posting”) to “associate the patent article with the number of the patent.”
The court found that this requirement applied to the information on the website, and “association” was not met merely by marking a product with the website. Instead, the court found that the statute requires that the website itself must “associate the patent and the patented article.”
Such direct association at the website was necessary to provide the level of notice to the public intended by the statute and to make the notice commensurate with that of physical marking—the product is associated with the patent, the court found. It noted that the website “does not mention a single specific patented article by product number or product name” and thus does nothing to associate any of the patent owner’s products with any of the covered products.
“Simply listing all the patents that could possibly apply to a product or all patents owned by the patentee on the patentee’s marking website does not give the public notice,” the court said, “It merely creates a research project for the public.”
The court then granted summary judgment that the patent owner failed to meet the requirements of the marking statute and thus was not entitled to any pre-suit damages for the asserted patents.
This ruling by one district court may not be the final word on what the marking statute requires for virtual marking of patents. For example, when a smaller number of patents or products are at issue, the analysis may be less strict. But given the lack of other case law guidance, the facts and analysis of this case provide important guidance and a reminder that failure to properly mark can have significant consequences.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Daniel McDonald is a partner at Merchant & Gould in Minneapolis, Minn. His practice areas include patent litigation, copyright litigation, trademark/trade dress litigation and trade secret litigation, with an emphasis on electronics, software and Internet issues. The views of this article are those of the authors, and not the firm.