False Marking:
The proposed changes to the false marking statute would have the effect of limiting the potential plaintiffs to only those who have suffered a "competitive injury" as a result of the false marking:
(k) FALSE MARKING.--
(1) IN GENERAL.--Subsection (b) of section
292 of title 35, United States Code, is amended to read as follows:
''(b) A person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury.''
The main purpose of the proposed changes to the false marking statute is to take away the "lottery ticket" effect of allowing anyone to sue, regardless of injury, and receive a windfall. After the decision in Forest Group, Inc. v. Bon Tool Company, in which the court ruled that the penalty for false marking was to be applied per item sold, an explosion in qui tam suits ensued. This reform legislation is intended to cut off plaintiffs who have suffered no real injury and are merely looking for a windfall.
However, "competitive injury" may be difficult to demonstrate for a small entity; most small entities likely do not have the resources to invest heavily into exploring possible new products and, as a result, demonstrating to a court that they somehow lost out on an opportunity due to false marking would be challenging. Consequently, the proposed legislation could favor larger corporations.
More extensive coverage of the rise in qui tam false marking suits can be found at http://www.patentlawyers.net/Patent-Law/Patent-Marking.aspx .
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