Avoid mistakes and save money by simplifying your patent marking program
Patent owners spend thousands of dollars to obtain patents on innovations. Yet many—large companies in particular—often devalue that investment by making mistakes with the marking of their commercial products with appropriate patent numbers. Patent owners who do not properly mark their products may limit the amount of damages they recover from competitors who steal their ideas.
The current patent law allows a patent owner to recover damages for patent infringement occurring prior to the filing of a lawsuit in two circumstances. First, where the patent owner notifies the infringer, in which case the patent owner’s ability to obtain damages begins with the date of actual notice. Providing actual notice can cause concerns though if the patent owner is not prepared to initiate immediate litigation due to lack of resources or other business reasons. When threatened with the notice, the infringer can actually drag the patent owner into litigation with a declaratory judgment action of non-infringement or patent invalidity. Also, the risk of equitable estoppel surfaces if the patent owner delays enforcing it rights during which time the infringer acts, because the infringer believes it will not be sued. Thus, equitable estoppel can prevent a patent owner from enforcing its patent rights.
The second way to start the patent infringement damages clock is to provide constructive notice. This is done by substantially marking all of the patent owner’s (and any licensee’s) commercial products with the numbers of the patents covering the products. For large companies that have many products and patents, the practice of patent marking can be expensive and has its pitfalls. If the patented products are not substantially marked with the proper patent numbers, the desired constructive notice may be deemed ineffective.
It is common that several patents will cover a particular commercial product. These patents issue at different times. The company incurs expenses, sometimes significant ones, each time the patent marking requires updating.
For example, for injection molded plastic products, the steel injection molds that make plastic parts would require modification each time a new patent issues covering the product. Sometimes adhesive-backed labels or stickers identifying the patent numbers are placed on the products. It is still expensive and can cause quite a headache to revise these each time a new patent issues. Also, for products like certain medical devices, the adhesive-backed label or sticker cannot be used due to sterility reasons. Then, the product packaging might be marked. But marking the packaging, instead of the product itself, raises questions of whether that practice complies with the patent marking statute. If there are many product codes for a product line, the probability rises that mistakes will be made in that some later-developed product codes may not be marked. Sometimes, miscommunications between those knowledgeable of the company’s patents and those involved in the manufacturing process result in some patent markings being missed. In addition to this example, there are a host of other reasons why marking a product itself with the right patent number sometimes falls short of a company’s intentions.
The recent America Invents Act allows patent owners to patent mark their products in an easier manner. It is called “virtual marking.” Virtual marking is accomplished by placing the word “patent” or “pat.” together with an Internet address on the patented product. The Internet address must associate the patented product with the applicable patent numbers, and must also be accessible to the public free of charge.
I would suggest placing on all products or labels (if the products themselves do not have room), whether patented or not, the phrase “Patents: www.yourcompanyname.com/patents.” This page on your website should list your company’s products and the patents associated with those products. It should also include some language similar to the following: “[Company name] is marking the products specifically identified on this website pursuant to 35 U.S.C. § 287(a) by associating each identified product with one or more patents that cover that product. If a product is not specifically identified on this website, it is not currently being so marked.” Those words should make it extremely clear to your competitors which products and ideas to steer clear of at the risk of litigation.
This virtual marking plan eliminates confusion at the manufacturing stage and reduces expensive changes in tooling or labeling as new patents issue or old patents expire. Regardless of future changes in the manufacturing process or labeling development, no patent marking updates will ever need to be made to the actual product packaging, whether patented or not, under this plan. The final notice of whether a patent actually covers a product is made on the website. Thus, in-house counsel have a very inexpensive and easy marking process that is reliable and gives them full control of associating the patent number with the correct products on the website.
Originally published on InsideCounsel.com. http://www.insidecounsel.com/2013/06/25/ip-avoid-mistakes-and-save-money-by-simplifying-yo