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Federal Circuit Grants Writ of Mandamus in False Marking Case

Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: Mar 15, 2011 @ 10:44 pm
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Seeking a writ of mandamus seems as if it is becoming a more popular avenue to pursue than it once might have been.  A writ of mandamus essentially seeks an order from a higher court to direct a lower court to follow the law.  They are extraordinary remedies because they come well before the case is over, which means that an ordinary appeal cannot be taken at that point; appeals are only typically allowed for final adjudications.  Notwithstanding the extraordinary nature of a mandamus request, earlier today the Federal Circuit issued a writ of mandamus requiring a district court to dismiss a false marking lawsuit because the complaint did not contain allegations sufficient to allow the plaintiff to appeal.  Essentially, even if each and everything in the complaint were believed the plaintiff could not possibly be entitled to a recovery.  Kudos to the Federal Circuit for standing up and getting rid of a frivolous lawsuit initiated by an obviously defective complaint.

In this case — In re BP Lucricants — the petition for a writ of mandamus was sought directing the United States District Court for the Northern District of Illinois to grant a motion to dismiss a complaint pursuant to the False Marking Statute, 35 U.S.C. § 292.  Specifically, the defendant BP Lubricants USA Inc. argued that the complaint failed to plead with particularity the circumstances of the defendant’s alleged intent to deceive the public in falsely marking unpatented articles with an expired patent.  BP’s argument was that the complaint failed to allege any underlying facts upon which a court could reasonably infer that they knew its patent had expired when it was marking its products.

Pursuant to Federal Circuit precedent, 35 U.S.C. § 292 requires that the false marking be for the purpose of deceiving the public.  So without intent to deceive a § 292 cannot stand.  The plaintiff alleged that the patent expired on February 12, 2005, and BP continued to mark its bottles with the patent numbers after the patent expired.  The complaint also asserted, upon information and belief, that BP knew or should have known that the patent expired because they are a sophisticated company.  The Federal Circuit, per Judge Linn (with Judges Lourie and Gajarsa), did not find these naked allegations were enough to support a fraud based claim.


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Judge Linn pointed out that fraud based claims need to be plead with enhanced particulars, explaining:

In all cases sounding in fraud or mistake, Rule 9(b) requires a plaintiff to plead “with particularity the circumstances constituting fraud or mistake.”  Fed. R. Civ. P. 9(b).  The Rule acts as a safety valve to assure that only viable claims alleging  fraud or mistake are allowed to proceed to discovery.  By eliminating insufficient pleadings at the initial stage of litigation, Rule 9(b) prevents relators using discovery as a fishing expedition.

Judge Linn further pointed out that the Federal Circuit previously held, in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327 (Fed. Cir. 2009), that “a pleading that simply avers the substantive elements of a claim sounding in fraud or mistake, without setting forth the particularized factual bases for the allegations, does not satisfy Rule 9(b).”  Ultimately, given that a § 292 sounds in fraud and there were no particularized facts alleged in the complaint the Federal Circuit had little difficulty in finding that the district court erroneously failed to dismiss the complaint and issued the writ of mandamus.  The Court did, however, indicate that the dismissal should be without prejudice so that the plaintiff can re-file should it be able to satisfy the particularized factual requirements of a § 292 claim.

Perhaps most interesting, at least to me, is where the Federal Circuit seemed to take on the inadequacy of complaints in general, saying:

A plaintiff is not empowered under the Rules “to plead the bare elements of his cause of action, affix the label ‘general allegation,’ and expect his complaint to survive a motion to dismiss.”  Ashcroft v. Iqbal, 129 S. Ct. 1937, 1954 (2009).  Instead, a complaint must in the § 292 context provide some objective indication to reasonably infer that the defendant was aware that the patent expired.

Is this a condemnation of the seemingly rampant complaints filed in so many cases, or is it tied specifically and only to § 292 cases?  The first part of the above quote seems to talk about complaints in general, citing to the Supreme Court.  That could be good news for those facing horrible patent infringement complaints that simply do not have enough information in the complaint to entitle the plaintiff to receive a default judgment.

With respect to patent infringement claims the Federal Rules of Civil Procedure (FRCP) authorizes little or no information in complaints and FRCP 84 states that the complaints accompanying the rules are sufficient and illustrative of the brevity that is required in a complaint. Unfortunately, the exemplary patent infringement complaint accompany the FRCP says that all the plaintiff needs to do is identify an issued patent number and assert that the patent is being infringed. Sadly, it is legally impossible to infringe a patent. One infringes claims, not a patent, so merely asserting a patent is not sufficient to lead to a district court issuing a default judgment even should the defendant not appear. That type of complaint seems to violate the dictates of the Supreme Court’s ruling in Bell Atlantic Corp. v. Twombly. In fact, in light of Twombly and in further light of Iqbal, the model patent infringement complaint no longer satisfies the requirements of FRCP 8.

So is In re BP a shot across the bow relating to all complaints that will find themselves before the Federal Circuit? There is certain a chance that is the case, and there is recent Supreme Court precedent that is as near to on point as possible that suggests that it is absolutely required that a federal complaint at least support a default judgment. I think a fair reading of In re BP is that a complaint, in this case a § 292 complaint, must at a minimum support a default judgment.

So if you are a defendant and you are facing a lawsuit where the plaintiff has not asserted anything useful and not identified any claims in the complaint then you should file a motion to dismiss. If you lose you should file a petition for writ of mandamus to the Federal Circuit. It seems the time might be ripe to stomp out those complaints filed by those who have not done any due diligence and instead seek to essentially extort money from defendants.

This Post Sponsored by Birch Stewart Kolasch & Birch

Birch Stewart Kolasch & Birch is a highly respected international intellectual property law firm committed to obtaining and enforcing intellectual property rights for our clients. BSKB has been providing a full range of intellectual property services for over 30 years. We specialize in chemistry, medical devices, biotechnology, pharmaceuticals, diagnostics, healthcare, computer science and mechanical and electrical technologies, the practice of reissue and reexamination, as well as in obtaining and enforcing trademark and copyright protection for our clients in the United States and internationally. The views expressed in this article are the views of the author and not necessarily the views of Birch Stewart Kolasch & Birch or its attorneys.

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  1. Here is a similar story

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