Product manufacturers may find themselves paying damages for marking their products with expired patent numbers, say McGuire Woods lawyers Brian C Riopelle and Steven D Hamilton.

In a recent string of cases, “enterprising” patent attorneys have filed qui tam actions against manufacturers for selling products that are marked with expired patent numbers, despite the fact that the identified patents were once valid and enforceable, the Richmond, Virginia-based Riopelle and Chicago-based Hamilton wrote in a recent client newsletter.

“At the heart of these cases is 35 U.S.C. §292, which states in pertinent part: ‘Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word patent or any word or number importing that the same is patented for the purpose of deceiving the public . . . . Shall be fined not more than $500 for every such offense,” they say. “Moreover, Section 292 permits any person to ‘sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.’”

In Pequignot v. Solo Cup Company, Matthew Pequignot, a patent attorney, filed suit against Solo Cup Company, alleging that Solo violated Section 292 by marking its drinking cup lids (such as those utilized by Starbucks), plastic cups, and other plastic utensils with (i) the numbers of two patents that are now expired; and (ii) the statement that “this product may be covered by one or more US or foreign pending or issued patents. For details, contact: www.solocup.com.”

“In a potential blow to manufacturers last year, the Pequignot court denied Solo’s motion to dismiss, holding that relevant case law, Section 292’s plain language, and public policy supported the conclusion that the term ‘unpatented article’ included items that were once protected by a valid patent, but which have now expired,” Riopelle and Hamilton wrote. “The court also determined that Solo’s ‘may be’ language can form the basis of a Section 292 claim because the ‘marking at issue need not explicitly state that the product is patented to constitute a false marking.’”

After holding that Pequignot could potentially maintain a claim pursuant to Section 292, the court explained that he must still show that Solo intended to deceive the public, which is a fact-specific inquiry, the lawyers said.

“Despite the Pequignot court’s ruling, manufacturers can take temporary solace in the fact that last month, another federal district court dismissed a nearly identical lawsuit,” they wrote. In Stauffer v. Brooks Brothers Inc, Raymond Stauffer, another patent attorney, sued men’s clothing manufacturer Brooks Brothers and its parent company, Retail Brand Alliance, for marking Brooks Brothers’ “Original Adjustolox Tie” with three patent numbers that expired over 50 years ago. The court granted Brooks Brothers’ motion to dismiss, holding that Stauffer failed to satisfy the fundamental constitutional requirement of standing because he failed to allege any facts showing injury to the public, according to Riopelle and Hamilton.

“After the Stauffer court dismissed the Complaint, however, the US Attorney for the Southern District of New York moved to intervene on behalf of the plaintiff, arguing that the plaintiff has stated an injury based upon the violation of the statute alone,” they said. “In other words, the US Attorney argued that the plaintiff need not allege an injury in a Section 292 qui tam case.”

At press time, the US Attorneys’ motion to intervene is pending before the Court.

“The primary consequence of this line of cases is obvious: Manufacturers of products face a new litigation threat that has potentially devastating consequences,” Riopelle and Hamilton wrote. “This line of cases will continue to develop as more will inevitably be filed and cases will work their way through the judicial system.”