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"Patent Markings" Lawsuits Could Run Into the Trillions 193

Posted by kdawson
from the who-you-callin'-a-qui-tam dept.
bizwriter writes "The latest legal bugaboo facing manufacturers is the false patent marking suit. Using what has been until recently an obscure type of legal action, individuals and enterprising law firms have targeted large manufacturers with lawsuits that can easily run million of dollars — in a case involving a drink cup manufacturer, over $10 trillion — for incorrectly including patent numbers on products. Some companies named in such suits are 3M, Cisco, Pfizer, Monster Cable, and Merck. Even expired patent numbers can be actionable." Sounds like a perfect opportunity for some enlightened appeals court to inject some sense into the debate. What do you think the chances are? Note: if ever there were a page that cries out for the Readability bookmarklet, this is it.
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"Patent Markings" Lawsuits Could Run Into the Trillions

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  • Copyrights (Score:5, Interesting)

    by KC1P (907742) on Monday March 01, 2010 @07:06PM (#31324464) Homepage

    I wish (US) copyright law worked this way around ... right now there's essentially no risk in tacking on a questionable copyright notice.

    • Re:Copyrights (Score:5, Insightful)

      by peipas (809350) on Monday March 01, 2010 @07:12PM (#31324548)

      Exactly. I'd like to see those NFL motherfuckers pay some coin for "prohibiting" descriptions of games they broadcast.

    • Specifically if the RIAA issues a DMCA takedown notice because they noticed that your garage band's website has MP3s on it, but they were your garage band's songs, you should be able to sue them for $500 for every file they claimed was infringing! I wonder if you could get away with it under this law...
    • by DaveV1.0 (203135)

      Please explain in detail what a "questionable copyright notice" is.

      • A copyright notice which claims more rights/restrictions than the law allows. For example, "no portion of this may be used without direct written consent" would impinge on fair use, as it is entirely legal to use portions for eduction, review, or criticism.

        • It's the consumer's responsibility to know the law. I can put a sign on my front door saying it's illegal to walk past it between the hours of 0300 and 0500. That doesn't make it true, and I don't see the need for any law preventing me from posting such a sign. In fact, I'm generally not in favor of nanny state legislation designed to protect people from their own ignorance when it comes to such matters.
        • As an additional note, I'd like to point out that your sig seems to contradict your stated position:

          "Empathise with stupidity, and you're halfway to thinking like an idiot." - Iain M. Banks
    • by Weezul (52464)

      All these qui tam actions might be lawyers trying to make a buck, but I feel they are basically beneficial because :
      (a) they help out small producers that actually know their own patents, and
      (b) they highlight the underlying meaninglessness of the patent system.

      We must also remember that judges will weigh the social costs for the various violations. For example, I'd expect that the 21 billion Solo Cup lids case is rather "open and shut", as all those lids were falsely market, but the actual damages are rat

      • How many people were wrongfully dissuaded from creating competing lids?

        The damages might be more than you think: How many people paid more for lids due to a lack of competition?

    • .. copyrights never expire.

      I'm sure you can sue for false DMCA takedown notices, but tracking down all those false ones will require more than $500 per incident. Imagine a false DMCA takedown notice earns the victim $10k just like abusive collections practices do. We'd most likely still see most victims just sit around and suffer quietly rather than fight.

      • by mattack2 (1165421)

        Are you just using hyperbole or what? (e.g. the "Disney gets copyright extensions forever" meme.) Copyrights can and do expire.

        • Are you just using hyperbole or what? (e.g. the "Disney gets copyright extensions forever" meme.) Copyrights can and do expire.

          (1) They will likely get another extension before "Steam Boat Willie" enters the public domain. (wash, rinse, repeat)
          (2) At life of author + 70 years, even my daughter will be dead before stuff produced when I was born enters the public domain. So, it may as well be forever.

    • by mbone (558574)

      You would need to go back to a system of copyright registration (which I would support) to make this work for copyright. You know if a patent exists by seeing if it has been issued; generally the only way to know if a copyright exists is to go to court.

  • by John Hasler (414242) on Monday March 01, 2010 @07:09PM (#31324496) Homepage

    > The problem for companies is that they might have lost track of what patents
    > cover a given product, or might have forgotten to update packaging to remove
    > numbers of patents that had expired.

    Don't "lose track". Don't "forget". Or don't mark (it isn't required). Problem solved.

    • by s-whs (959229)

      > The problem for companies is that they might have lost track of what patents
      > cover a given product, or might have forgotten to update packaging to remove
      > numbers of patents that had expired.

      Don't "lose track". Don't "forget". Or don't mark (it isn't required). Problem solved.

      Nonsense. Materials may be made before the patent expires. What about stuff a few years old that didn't sell at the regular price and is now being sold off for a low price? CD players for example. Should patent num

    • Or don't mark (it isn't required).

      Yeah, but is that really what we want? At least if they include markings, they let you know that they think this product is covered by a patent. That is much better than a submarine patent that is hidden somewhere in the bottom drawer of a filing cabinet.

      Since you have the relevant patent numbers, any semi-competent competitor can go online, look up the patent, and see what exactly is covered by it. If the patent is expired, or simply doesn't apply to your competing product, you'll be able to see it right t

  • Silly editor (Score:4, Insightful)

    by Anonymous Coward on Monday March 01, 2010 @07:09PM (#31324500)
    Why is it that editors around here seem to think that laws are made by the courts? This one is a great example - saying it is an opportunity for the Federal Appeals court to do something. Like what? They get to rule based on law. If we need the law changed, the court can't do that - it needs to go to the legislative branch for that.
    • Re:Silly editor (Score:5, Informative)

      by MillionthMonkey (240664) on Monday March 01, 2010 @07:32PM (#31324724)
      Yes but judges can create precedent by presenting a finding where existing law is vague. The legislature can respond to that by further legislation. Judges can also find laws to be unconstitutional, and these rulings might require passage of an amendment to overcome.

      You hear a lot about "legislating from the bench" but this is part of the job. Judges are supposed to "legislate" by filling in gaps as cases present themselves which might have no clear precedent or no clear interpretation within existing law. (The legislature certainly can't be expected to think of everything.) And judges of both persuations do it, as they are supposed to.

      The catch is, they're supposed to do it well. When you're nominating or confirming judges, and you absorb yourself with fetish issues like abortion or gun rights, you can end up with the sort of foolish judiciary we have today.
      • The catch is, they're supposed to do it well. When you're nominating or confirming judges, and you absorb yourself with fetish issues like abortion or gun rights, you can end up with the sort of foolish judiciary we have today.

        Heh....can you think of any time in US history where one group or another wasn't trying to stack the bench with people favorable to their cause? I'll bet it's a technique that comes into use historically any time the time-honored technique of bribing fails to work.

      • by praksys (246544)

        It's pretty sad that normal relatively non-crazy people have come to accept this view of legal interpretation, when it is so severely fucked up.

        First, it's fucked up because it incorporates a totalitarian assumption is that every possible circumstance should be governed by law, and that whenever someting happens that isn't covered by law it must have been some sort of oversight that should immediately be rectified.

        Second, it's fucked up because it implies an unthinking acceptance of retrospective law. When

        • First, it's fucked up because it incorporates a totalitarian assumption is that every possible circumstance should be governed by law,

          Every possible circumstance is legal or illegal. I don't see what's "totalitarian" about that.

          and that whenever someting happens that isn't covered by law it must have been some sort of oversight that should immediately be rectified.

          Um, yeah, ASAP, if it comes before a court and a verdict hangs in the balance. If not immediately, then when? After waiting for someone to
          • by praksys (246544)

            Every possible circumstance is legal or illegal.

            Only if you take legal and illegal to be logical opposites, but if you take 'legal' to mean explicitly allowed by law, and 'illegal' to mean explicitly forbidden, then there will be a wide and entertaining middle containing actions that are neither approved nor forbidden. People are creative and they shouldn't have restrict themselves to the list of officially approved actions or be subjected to an arbitrary and capricious legal system where the rules get made

            • Re: (Score:3, Insightful)

              No. If a case comes before the court, and the law doesn't cover the facts of the case, then the correct response is "case dismissed".

              That sounds pretty stupid. Someone might do something that e.g. is hard to distinguish between murder and manslaughter since the law is vague or leaves ambiguity. The correct response isn't "case dismissed".

              • by praksys (246544)

                That couldn't happen. Murder is killing with intent, manslaughter is killing without intent, so there isn't anything in between.

                But in the abstract, yes bad stuff can happen that isn't covered by the law. And there is nothing that a system governed by laws can do about such cases, except to make a new law, and get it right next time. That might seem unfair, but it beats the hell out of living in a system where no one really knows what will get them thrown in jail until after the door clangs shut behind them

    • by Nimey (114278)

      Silly AC: there's this thing called "case law" in the USA.

    • They can impose limits based on common sense, as allowed by BMW v. Gore.

      However, you're right in that there should be a legislative fix. California used to have a mechanism whereby someone could be sued by an unaffected person when that suit was "in the public interest." As an example, places of business were sued because the restroom door was perhaps one-half of an inch too narrow according to statute for wheelchair-accessible restrooms. Thousands of others were filed asking for damages of a few hundred

    • by TubeSteak (669689)

      Why is it that editors around here seem to think that laws are made by the courts? This one is a great example - saying it is an opportunity for the Federal Appeals court to do something. Like what? They get to rule based on law. If we need the law changed, the court can't do that - it needs to go to the legislative branch for that.

      I don't think the law is bad, it was just never written to take into account 21 billion counts of false marking.

      So while I can't see how any court would strike down the law as unconstitutional,
      a judge could certainly declare the statuatory damages to be unconstitutional.

      • by jedidiah (1196)

        Of course they will only ever declare excessive punitive or statutory damages to be wrong when it is a corporation that's being punished.

        For individuals it will be business as usual.

  • Still... (Score:2, Insightful)

    by Anonymous Coward

    I still say Monster Cable deserves to be sued to bankrupcy. Same with Best Buy (Worst Buy) and Microsoft.

  • Patents do produce innovation!

    I'm just wondering who patented this business method. Sheer brilliance, proving that American ingenuity still leads the world.

    Oh, and you people who think a court is going to shoot this down? Only of the judges aren't lawyers.

  • No (Score:4, Interesting)

    by DigiShaman (671371) on Monday March 01, 2010 @07:12PM (#31324538) Homepage

    Sounds like a perfect opportunity for some enlightened appeals court to inject some sense into the debate. What do you think the chances are?

    Never going to happen.

    In the eyes of the Federal Gov, upholding patents and IPs are so important, it would be considered National Security to protect them. Seriously, what the hell does America have that's worth selling? Nothing except services and IP. We hardly manufacture anything anymore.

    • Re: (Score:3, Insightful)

      by nido (102070)

      We hardly manufacture anything anymore.

      The U.S. hardly manufactures anything that requires lots of human labor. If the manufacturing process can be automated, companies will keep the manufacturing here.

      Look at the tags on your clothes. I bet you have at least one item that says "made in Honduras/Mexico/etc of U.S. Material". Stitching is labor intensive, whereas turning raw materials into fabric is mostly done by machine.

      With that said, there's still a ton of manufacturing in the U.S. - computers and robots have just replaced humans as the machi

    • Ya! We hardly manufacture anything. I mean we are only the very top manufactured goods producer in the whole world!

      Yes really, the US still leads the entire world in manufactured goods. Now, China is on track to become the leader. If things keep going as they are in 5-7 years China will take over as the top, but because their production is growing so fast not because the US's is shrinking. That would still leave the US in a commanding second position.

      So sorry, try your argument again. While the US undoubted

      • Most of the CPU companies are American: Intel, AMD, IBM, Motorola, Freescale.

        Not to mention Sun^H^H^HOracle, Texas, National, Analog (really), Atmel, Microchip INC, Zilog, Xilinx and Altera are processor companies (of sorts) I can think off the top of my head. The only other two I can think of off-hand are Fujitsu and Arm.

        Not all of them fab CPUs. The big fabs are Intel, IBM, former AMD, TMSC, Texas and a few others. Bit it's also dominated by the US.

        The US manufactures a LOT of stuff, more than any other

  • Let's hope all this patents chaos in the US (and the US trying to push their patents in other countries) doesn't end up in war in some years. I'll like to see US enforcing their patents this way on Russia / China / etc.
  • by John Hasler (414242) on Monday March 01, 2010 @07:13PM (#31324554) Homepage

    > Sounds like a perfect opportunity for some enlightened appeals court to
    > inject some sense into the debate.

    No, it's a perfect opportunity for an enlightened Congress to correct the law. Oh. Wait...

    • I'm going to have to say that the law is already sensible in this case. Here is the summary from the article:

      The type of suit is called a qui tam action and is part of the False Claims Act, 31 U.S.C. 3729: The statute, first passed in 1863, includes an ancient legal device called a "qui tam" provision (from a Latin phrase meaning "he who brings a case on behalf of our lord the King, as well as for himself"). This provision allows a private person, known as a "relator," to bring a lawsuit on behalf of the United States, where the private person has information that the named defendant has knowingly submitted or caused the submission of false or fraudulent claims to the United States. The relator need not have been personally harmed by the defendant's conduct.

      Basically, don't claim patents you don't own. Does anyone really have a problem with that? The damages are 'up to' $500 per incident (or per product), but I don't think any judge is going to fine a company trillions of dollars, and if he did, I don't think it would be constitutional.

      • by GIL_Dude (850471)
        Thanks for calling that out. I do hope that these provisions require that someone be damaged in order for there to be a judgment. I'd also hope that the damaged party (if indeed there is one) would get the judgment and not the "relator". Otherwise it seems likely that many of these cases would have merit (on the grounds that fallacious patent protection was claimed) but really be poorly veiled attempts to grab money when there was no actual injury.
        • Otherwise it seems likely that many of these cases would have merit (on the grounds that fallacious patent protection was claimed) but really be poorly veiled attempts to grab money when there was no actual injury.

          My understanding is that this is exactly the purpose of this type of law. We don't want our police to be chasing every silly law (and they won't do it anyway, they don't have the resources), so we (or, our representatives) arrange the law so that there is motivation for someone else to chase violators of the law. They get rewarded, and the system stays fixed.

          You may not like that system, and that is ok, but that is my understanding of the legal theory behind this type of thing.

        • by nasch (598556)

          How would you ever prove actual damage? Seems to me this law is in place to discourage companies from falsely claiming patents because it would be nearly impossible to demonstrate actual damage to an individual from such fraud, yet it's clearly in society's interest to prohibit it.

  • by lennier (44736) on Monday March 01, 2010 @07:19PM (#31324626) Homepage

    From the article, these are suits against companies claiming patent protection on products when they don't in fact have it.

    That's the opposite of claiming patent protection for something you don't have rights to, ie, patent trolling.

  • Not so bad.... (Score:3, Insightful)

    by Improv (2467) <pgunn@dachte.org> on Monday March 01, 2010 @07:29PM (#31324698) Homepage Journal

    I have no sympathy with those who claim intellectual property - sure, these lawsuits are filed by scum, but they're filed against people who claim to own ideas. I hope these are long, plentiful, painful lawsuits for both sides.

    • by DAldredge (2353)
      Why don't I own the programs that I write?
    • Do you really see no value in patents? It seems to me that as a society that we want to reward people who invent things. If we reward people for inventing things, it seems logical to punish people who lie about inventing things (eg false patent claims).

      Certainly one can argue that the way we implement this is badly broken ( I think it is), but the basic idea seems sound.

      • Re: (Score:3, Insightful)

        by jedidiah (1196)

        We want people to invent things. Whether or not we NEED to "reward" people in order to encourage this is disputable.

        • It often takes resources in addition to manpower to invent things. If you are developing new software, all you need is a couple of thousand dollars in computer hardware. If you are developing a more efficient turbine blade design, or a process to make inexpensive biodegradable drinking glasses you may need to spend a lot on hardware.

          If you spend a lot developing something, I think you should expect some return.

      • by Improv (2467)

        I have a bit of sympathy for Lessig's idea that we could make do with weaker protections, provided we make it clear that it is not actually property and we stop treating it so similarly.

        • I think "intellectual property" is very different than physical property. The classic difference is that if I give you my IP, I still have it.

          I also think the IP needs some protection - some types of IP are very expensive to produce. I don't think in needs the SAME protection as physical property.

          I don't have a good idea of how to manage intellectual property - I hope someone smarter than me will think of something. What we have now seems to work very badly.

  • Note: if ever there were a page that cries out for the Readibility bookmarklet, this is it.

    Just skimmed over this: looks pretty awesome.

  • I don't understand the hubbub about expired patent markings. (1) It costs $ to create new dies for production, so such a requirement just costs companies more, which they have to pass along to customers. (2) Someone looking up the patent can see that it's expired, or is going to expire soon, and hey, here's a large part of the engineering behind the product, we can copy this instead of re-engineering it. That's part of why patents exist, to make that information public.

    • by h4rr4r (612664)

      Because it says those items are covered by said patents, when those patents are either expired or not applicable. They could just leave them off the product to begin with or remove them when the times come. Costs are not directly passed to customers, if prices could be increased at will the company would have already done that.

      • by langelgjm (860756)
        So what happens to all the products that have already been sold and are marked with patent numbers after those patents expire? Should the manufacturer contact all the buyers to inform them the patent has expired? Should they file off the patent numbers?

        One could actually argue that marking a product with an expired patent number serves the public interest: that way, anyone who wants to duplicate it can simply look up the patent number and follow the process!
      • by Sabriel (134364)

        I find absolutely nothing morally or ethically wrong with an item marked "patent #xyz" regardless of whether that patent is current or expired. If it's current, then looking up the patent number will tell me how to build it and - if I'm planning commercial distribution - who to license it from. If it's expired, it will still tell me how to build it and I will also know I don't have to pay for a license. Win-win.

    • by Lehk228 (705449)
      you don't have to make new dies, just have someone dremel the existing die to scratch out the number.
  • by martin-boundary (547041) on Monday March 01, 2010 @07:36PM (#31324756)
    I don't see what's objectionable here?

    If a company falsely labels its products with imaginary patent numbers, they deserve to be sued into oblivion. It's outright lying to the public, and an attempt at intimidating would-be competitors. It's wrong and should be punished harshly.

    Patents are overused as is, and one of the reasons they are often misused (eg against open source) is because it's easy and relatively risk free. If the costs of misuse can be increased dramatically, many companies may think twice before doing it.

    • by h4rr4r (612664)

      I agree, those who employ fraudulent patent markings should be glad these are only civil cases. If I had my way they would be looking at fraud charges too.

  • to read Slashdot with an ad-blocker, then? That's basically what you're advocating with your "readability" bookmarklet.

    Note: I agree that their site is unbearable to read as-is.

  • by 140Mandak262Jamuna (970587) on Monday March 01, 2010 @07:57PM (#31324946) Journal
    Since the premise of the whole thing is that the plaintiff is a friend of "our Lord the King" or the US Government and the defendant submitted false claims to it, and the plaintiff is not personally harmed, there is no need to award the plaintiff any damages. Problems solved, just rule that any damages awarded will go to the aggrieved party, or the US government in this case. Once the lawyers know they are not going to be getting a piece of the award, they will go find some one else to screw^h^h^h^h^h sue.
    • by Weezul (52464)

      All these qui tam cases actually benefit society by making companies comply with the laws, the only problem is lawyers are going after poorly labeled cups instead of Amazon's 1-click patent.

    • The whole point of qui tam actions are to encourage people to bring the suits in the first place. They do this with Medicaid fraud in many states, for example. The state might not have the resources to closely examine all possible instances of fraud, or private parties might have better information. So by giving people a cut off the award, you give them an incentive to look for the fraud and to bring it to the government's attention.
  • by Whuffo (1043790) on Monday March 01, 2010 @08:07PM (#31325030) Homepage Journal

    That's what us old-timers call fraud. It's not OK, no matter how the apologists here may try to spin it. Yes, sometimes it's not cheap or easy to comply with the law - but that doesn't make complying with the law optional no matter how much you wish it was.

    Sometimes I wonder if the people who post here think about what they're saying - or if they just scan the article enough to formulate a (weak) opposing point and rush to post it. There's only one thing worse than a patent troll and that's corporations trolling with patents they don't own. If corporations can destroy people for violating their patents, what do you think should be the proper punishment for claiming patents that you don't own?

  • by bistromath007 (1253428) on Monday March 01, 2010 @08:55PM (#31325390)
    Live by the sword, die by the sword.
  • by bartwol (117819) on Monday March 01, 2010 @09:28PM (#31325576)

    Here [patentlyo.com] is a link to the court's decision. It is not a judgment against Solo, but a denial of their request to dismiss the case.

    The judge argues the problem of incorrect markings here:

    Congress has given to the inventor opportunity to secure the material rewards for his invention for a limited time [...] Patent markings are an essential component of this system. The "Patent No. XXX" imprint is, in effect, a "no trespassing" sign.

    The plaintiff, i.e. the "troll", has not yet made his case. In order to prevail he has to prove that Solo used the incorrect markings "for the purpose of deceiving the public." That remains to be determined.

    But therein, it is not clear to me what's really going on here with Solo (for example). It seems that laziness about cleaning up one's patent markings has a distinct reward, i.e. to scare off copy-cat competitors (which is exactly the kind of subsequent activity that the publicly filed/expired patent is intended to encourage). I'm not so sure that these are just mistakes, and in fact, I find it unlikely that there isn't some willfulness here. The corporate counsels that insist on taking advantage of adding the patent markings don't consider the correctness of removing them once they are no longer valid???

    It may take a crack of the whip to clean up the rampant "laziness" that leaves these wrong and discouraging markings in use.

  • If I intend to produce a product and decide not to or to alter the product due to someone falsely claiming they own a patent I should be able to sue and recover both real and punitive damages.
              Recently our sour Supreme Court declared that corporations would be treated as real persons. Lies and false claims make real persons liable to punishments. Bailiff! Wack their peepees!!!

  • If a company can be sued for these quantities of money, effectively bankrupting any company on Earth, shouldn't the companies have people that make absolutely sure that all of this patent stuff is correct?

    If the risks are that high, why not mitigate that risk by having a few people keep and maintain this is check? If you could get sued for $2Billion, having 10 people in a company, even at $1Million each is a big cost savings measure for the company.

    Companies spend lots of time and money to make sure they w

  • by notaspy (457709) <imnotaspy@yahoo . c om> on Tuesday March 02, 2010 @08:38AM (#31328946)

    In more recent developments, Solo is granted summary judgment. BNet's cited blog post must have missed it.

    http://www.williamsmullen.com/rocketdocketiplit/blog.aspx?topic=63&All=null&IsListParentTopic=true [williamsmullen.com]
    "Last week, in a case it described as one of "practically first impression," the Eastern District of Virginia granted summary judgment in favor of Solo Cup Co. that it was not liable for improper patent marking under 35 U.S.C. 292(a). Pequignot v. Solo Cup Co., No 1:07cv897-LMB/TCB (E.D. Va. July 2, 2009). The Court agreed with Solo that the advice of counsel it received to replace patent-marking molds with non-marking molds in a gradual fashion was reasonable. Solo's overall conduct was held to evidence a lack of intent to deceive the public. The Court also held that an "offense" under the statute is the overall decision to mark improperly, thereby rejecting Pequignot's argument that Solo should be penalized for each and every lid it marked."

    "Solo also prevailed on summary judgment with respect to its fallback position, namely, that even if there were intent to deceive the public, the offenses punishable under the statute are the decisions to mark improperly, not each and every marking of a product. Thus, in an alternative holding, the Court decided that the maximum amount of damages for which Solo could be liable is $1500."

    And in a recent article by Law Professor Thomas Field, http://www.ipfrontline.com/printtemplate.asp?id=24082 [ipfrontline.com]
    "The opinion in Pequignot v. Solo Cup Co., 646 F.Supp.2d 790 (E.D. Va. 2009) (Pequignot III), a case resolved last August, and now on appeal, signals a very different, perhaps more typical view of those who seek to recover under section 292(b). There, the court grants summary judgment for Solo because it was unable to find deceptive intent."

The reason that every major university maintains a department of mathematics is that it's cheaper than institutionalizing all those people.

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