Patent Marking Principles

by Gordon R. Moriarty, Esq.
Weingarten, Schurgin, Gagnebin & Hayes LLP

In order to collect damages for past infringement, a patent owner must adhere to certain provisions of U.S. law which govern the marking of patented articles with the relevant U.S. patent number(s). Failure to do so may result in the inability to sue for damages based upon past infringement. This is the only consequence of failure to mark. This article outlines the requirements of the patent marking statutes and explains what steps a patentee should and should not take in marking their products. A brief discussion is also provided relating to the marking requirements of some of the countries in which my clients often file. As this article is intended to be a general introduction to the topic, it is recommended that issues relating to specific situations be addressed with a registered patent attorney.

The Purpose of Marking and The Effect on Potential Damage Awards
The U.S. patent marking and notice statute, 35 U.S.C. §287(a), provides that a patentee (or its licensee) may mark a patented article with the word "patent" or the abbreviation "pat." together with the relevant patent number(s). Marking, if undertaken, must also be performed in a substantially consistent and continuous manner in order to provide constructive notice to third parties. Once such notice has been given to an infringer, the patentee may pursue damages for infringement as of the date the patentee began selling its properly marked articles. Of course, an award of damages depends upon successfully proving infringement and defending against a patent invalidity counter-argument.

A patentee may not rely upon actual knowledge of the infringer as a basis for constructive notice. Therefore, even if an infringer is aware of the patentee's patent as a result of the infringer's own prior art search, this would not qualify as constructive knowledge for purposes of the marking statute.

The patent marking statute employs permissive language, providing the patentee with the option to mark or not. However, failure to mark with the relevant patent number(s) may disqualify the patentee from suing for damages based upon infringing sales which occurred prior to the date of actual notice to the infringer. If an alleged infringer is only provided with actual notice in the absence of marking, then ceases all infringing activity, there would be no grounds for infringement-based damages. Actual notice most often occurs upon service of suit, or through the provision of an unambiguously worded letter alleging infringement. I normally recommend against the latter approach, without first filing a complaint against the alleged infringer, to avoid the patentee being subject to a declaratory judgment suit in an inconvenient or unfriendly forum. The provision of a "friendly" letter to a third party, enclosing a copy of the relevant patent or patents and inquiring whether the third party has any interest in obtaining a license, has been found by some courts to suffice as actual notice for purposes of calculating damages, though this approach introduces a greater risk of providing the recipient with standing for a declaratory judgment suit. Thus, constructive notice through appropriate marking is desirable.

An alternative to marking is for a patentee to monitor carefully the marketplace for products which would be covered by the relevant patents. If an infringing product is introduced, the patentee may provide the infringer with actual notice shortly after the infringing product enters the marketplace, such that damages would be maximized. Once again, actual notice is most preferably provided after an infringement suit has been filed to avoid the risk of being a defendant in a declaratory judgment action. By taking this approach, there is no need to provide marking on the patentee's own products.

Who Must Mark?
The marking statute is applicable to the patentee, as well as to the patentee's licensees who make, offer for sale or sell a patented article in the United States or who import a patented article into the United States. However, many patentees have found it difficult to force a licensee to mark, even though the license agreement contains a marking provision. A patentee may still be able to recover damages based upon a constructive notice theory, even if the licensee does not consistently mark, as long as the governing license agreement contains a marking provision and the patentee exercises "reasonable efforts" in an attempt to force the licensee to comply with that provision. Such reasonable efforts may include letters to the licensee requesting compliance with the license terms and an acknowledgement of the duty to mark and an assurance that such duty is being fulfilled. These letters should be retained by the patentee in case it needs to establish that reasonable efforts were indeed employed.

If a licensee has complied with its obligation to mark, but a sub-licensee alters the product such that the marking information is removed, the patentee may still be considered to have provided the requisite constructive notice.

Alternatives to Marking Directly on an Article
Under certain circumstances, it may be impractical or impossible for a patentee or its licensee to provide the relevant patent number(s) directly on the articles. The marking statute provides for this by allowing the patent identifying information to be placed on a label affixed to the product or to its packaging. It is appropriate to provide marking on a label when the article itself is too small to be clearly marked, when the article would be "defaced" by marking, when the article is customarily provided with marking on associated labeling, or when the expense of marking the article would be prohibitive. While these circumstances are often read broadly, a court may find that marking should have been provided directly on an article if, for instance, other non-patent information is provided on the article. In the latter case, a court may find that label-based marking is insufficient and that pre-filing damages are not available.

Limitations to the Marking Rule
There are certain exceptions to the marking requirement for the collection of damages, including patents under which the patentee does not practice (i.e., the patentee does not make or sell articles covered by the patentee's own patents), patents which only have method or process claims, and patents having both apparatus and method (or process) claims but of which only method claims are infringed. Such patents are not subject to the marking requirement, thus enabling a plaintiff to sue for damages based upon use or sales prior to the provision of actual notice. However, if a patent has both method and apparatus claims which are applicable to the patentee's article, marking is required by 35 U.S.C. §287(a) to recover under either or both of the method and apparatus claim types.

Practical Considerations of Marking
As noted, marking according to the statute requires the use of the word "patent" or "pat." along with the applicable patent number(s). Marking must also be provided in a substantially consistent and continuous manner. While there is no blanket rule with respect to the application of the latter requirement, common sense dictates that once a marking regimen has been commenced for a product or series of products, it should be maintained. Courts have found inconsistently marked products to have never provided constructive notice, thus limiting the recovery of damages to the date of actual notice.

The size and location of the patent information is driven by practical considerations. If other labeling is present on an article in an easily read type size, a court would likely find patent marking insufficient if presented in type difficult to read without magnification. Similarly, if other indicia are provided in a highly visible location on an article, the placement of patent marking information in an obscure location may run the risk of being insufficient. On the other hand, at least one court has found that marking in an obscure location itself is not improper when practical considerations required use of the location.

What if a patentee produces a family of products, with each product being covered by a different subset in a series of patents? In this case, it is appropriate to be overly inclusive, as long as the patentee has a reasonable belief that each of the listed patents covers at least one of the products in the family. In this case, courts have approved of an indication that the product is covered by "one or more" of the listed patents. Likewise, listing an expired patent number is not likely to be a problem for a patentee, as long as at least one of the products was covered by the patent while it was in force. These situations are covered by 35 U.S.C. §292, the false marking statute. To run afoul of this statute, an infringer must prove that a patentee had an intent to mislead the public by improperly marking its products.

While over-marking a product is therefore less of a worry as long as there is a reasonable belief that each marked patent pertained to the product, it would be unwise to stretch the bounds of credulity and list a large number of questionably relevant patents in an attempt to obscure the truly applicable patent(s). Further, it may be preferable for a patentee to revise the list of marked patents once it has been determined that one or more have expired. This effort would lend credence to an assertion that there was no intent to mislead the public regarding patent coverage.

Economic considerations which may effect a patentee's decision to mark include the cost of affixing the mark to the product or of altering the product labeling, the likelihood of infringement, the potential cost to the patentee of such infringement, the ease of monitoring the marketplace for infringing products in lieu of marking, and whether the likely outcome of an infringed patent would be a cross-license as opposed to damages awarded through litigation. Marking may also be important for increasing damages when it is possible that the patentee itself may be subject to an infringement action - having a significant claim for damages would enhance the patentee's bargaining position in settlement or cross-licensing negotiations.

The Effect of a Delay in Marking on Damage Recovery
As noted above, marking provides constructive notice to an infringer, thus enabling recovery of damages as of the date of such notice. What if the patentee did not begin a "substantially consistent and continuous" system of marking until some time, say months or years, after the issuance of the patent? Courts have held that the delay in marking does not foreclose the collection of damages prior to the date of actual notice, but rather delays the initial date for calculation of damages until the date compliance with the marking statute began. For this purpose, the date marking began is most likely to be found by a court to be the date on which labeled product began to be available to customers. In contrast, constructive notice would not be established as of the date on which new, properly marked labels were prepared but not applied to products, or the date on which new, properly marked labels were affixed to products which were in a warehouse and not yet shipped. Marking Products Covered by Pending Patents There is no obligation in the marking statute for a patentee to mark a product covered by a pending patent application with the words "patent pending" or "patent applied for." Though at least one court has held that the absence of such words may effect the latter collection of damages, the majority of courts have held that patent rights are inchoate until the patent actually issues. If those phrases are to be used, a design, provisional or utility patent application must be on file with the U.S. Patent and Trademark Office to avoid liability under the mismarking statute referred to above.

Marking Provisions Outside The United States
Patent marking is optional in the United States, though failure to mark effects a patentee's ability to recover damages for past infringement. Outside the United States, marking is generally permissive as well, with similar effect on the collection of damages absent proper marking.

Among the foreign countries in which my clients most often file, Canada, Mexico, and Taiwan have marking requirements which should be noted. Canadian law requires the owner of an industrial design registration to mark all articles embodying the design with the French and English abbreviations "Enr." and "Rd." on the articles; the name of the owner of the registration and the year of registration must also appear. In Mexico, marking is optional, though failure to mark may result in an inability to bring an infringement action. However, once a patent has lapsed or been nullified, the marking must cease within one year of such lapse or from the date the nullity resolution became final. Otherwise, criminal sanctions may result. Taiwan also disallows an infringement suit by a patentee who has failed to mark patented articles.

As for false marking, patentees are advised to monitor the status of their patent portfolios in each country, and to adjust the marking accordingly. Most industrialized countries have criminal sanctions for improper marking, though as in the United States, intent to deceive is a necessary element of the infraction.

Conclusion
Patent marking is a necessary component in one of two approaches to maximizing damages which may be sought in an infringement suit. By pursuing a comprehensive patent marking regimen, including periodic reviews of the patent portfolio and making any necessary changes to the marking of patented articles, constructive notice is provided to potential infringers of the patentee's rights. This approach requires the analysis of the patentee's new products for coverage by one or more patents in the portfolio. A failure to appropriately mark may result in an inability to sue for damages prior to actual notice of infringement. The second approach does not require patent marking, but requires vigilance over the marketplace in which potentially infringing articles may appear. The patentee should be prepared to initiate an infringement suit as soon as such infringing articles are identified to maximize the potential damages. In the latter case, diligent monitoring of the relevant marketplace obviates the need to maintain a patent marking program, and may in some circumstances represent a less expensive and simpler alternative to patent marking.

This article is for informational purposes only and should not be construed as a legal opinion. © Weingarten, Schurgin, Gagnebin & Hayes LLP 2000

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