What’s in a Label: A Federal Circuit Ruling Increases the Chance that Companies will Pay Damages for Labeling Goods with Expired Patent Numbers.
In Stauffer v. Brooks Brothers, the Federal Circuit allowed a claim to proceed against Brooks Brothers for failing to remove out of date patent labels from its bow ties. This case has become the test case for numerous claims filed across a broad range of industries, challenging companies that continue to mark products as patented years and even decades after the patents have expired. While the Federal Circuit primarily addressed Mr. Stauffer’s standing, the suit has the potential to cost Brooks Brothers up to $500 per infraction, which appears to mean up to $500 per bow tie sold since the 1950’s. The Brooks Brothers case is discussed in depth over at the Wall Street Journal.
A similar suit against the Solo Cup Company turned up an interesting defense that many manufacturers are likely to mimic. Namely, Solo Cup Co. convinced a judge that the company had reasonably relied upon its lawyers’ opinion that the approximately $2 million dollar price tag of changing out its manufacturing equipment constituted an unreasonable hardship. Instead, the lawyers suggested the company could comply by replacing the patent marking machinery with unmarked machinery as the parts wear out. While this defense is unlikely to save Brooks Brothers from almost 60 years of infringement, it may be available to numerous other companies, if their outside counsel happened to arrive at the same conclusion.
Beyond the variety of legal issues raised by this application of the false marking statute, the underlying principle supporting these claims is not necessarily obvious in the modern marketplace. This type of complaint is based upon the principle that marking a product with an expired patent number has a chilling effect on competition. However, with the ease of access to online resources like Google’s Patent Search, a patent label on an item of merchandise might just as easily place a competitor on constructive notice of the patent’s expiration date. Given the high cost of replacing the machinery required to manufacture labeled goods, and the ease with which the average individual can discover whether a patent is still in force, it is difficult to see where this particular practice causes any harm.