August 22, 2011
Bloomberg Law Reports
By M. Andrew Holtman, Ph.D.
Authored by Bart A. Gerstenblith, M. Andrew Holtman, Ph.D. and Zhenyu Yang, Ph.D.
Recent developments this past spring resulted in a significant decline in the number of new false marking cases filed in the United States.1 This contraction appears due to the efforts of the courts and Congress to curb the high number of the false marking cases filed after the U.S. Court of Appeals for the Federal Circuit's Forest Group decision in December 2009,2 and is aptly shown on the graph below.3
As noted in our earlier article,4 the U.S. District Court for the Northern District of Ohio concluded in March that the qui tam provision of the false marking statute, 35 U.S.C. § 292(b), was unconstitutional under the Take Care Clause of the U.S. Constitution.5 Since then, the U.S. District Court for the Eastern District of Pennsylvania also reached the same conclusion, finding Section 292(b) unconstitutional.6 The Federal Circuit, although not yet reaching the constitutional issue, recently concluded in In re BP Lubricants USA Inc., that false marking claims must be pled with particularity under Fed. R. Civ. P. 9(b).7 As a result of that decision, most district courts addressing motions raised under Fed. R. Civ. P. 12(b)(6) based on Rule 9(b) have dismissed false marking claims without prejudice.8
Congress has not remained silent either. Most recently, on June 23, 2011, the U.S. House of Representatives passed H.R. 1249, moving legislation to reform U.S. patent law closer to enactment. H.R. 1249 and the U.S. Senate's version of the bill, S. 23, propose significant amendments to Section 292 that would likely change the landscape and result in continued reduction of the number of false marking claims.
Title 35, United States Code, § 292 provides in relevant part:
(a) . . . . 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 . . . [s]hall be fined not more than $500 for every such offense.
(b) Any person may 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.9
In a March 14, 2011 Memorandum of Opinion and Order, the Northern District of Ohio held the qui tam provision of 35 U.S.C. § 292(b) unconstitutional, finding that it violates the Take Care Clause of the Constitution.10 The Take Care Clause requires that the President "shall take Care that the Laws be faithfully executed."11 In analyzing the constitutionality of Section 292(b), the Unique Product Solutions court applied the Supreme Court's "sufficient control" test, discussed in Morrison v. Olson.12 In Morrison, the Court examined the constitutionality of the Ethics in Government Act of 1978 ("the EGA")13 under the constitutional principle of separation of powers.14 Although the Court did not specifically address the Take Care Clause in finding the EGA constitutional, an important component of the Court's decision relied upon features of the Act which "give[] the Executive Branch sufficient control over the independent counsel to ensure that the President is able to perform his constitutionally assigned duties."15
To connect the Supreme Court's Morrison control test with the Take Care Clause, the Northern District of Ohio relied on the U.S. Court of Appeals for the Sixth Circuit's decision in United States ex rel. Taxpayers Against Fraud v. General Electric Co.,16 in which the Sixth Circuit applied the separation of powers analysis to the Take Care Clause in upholding the constitutionality of the qui tam provisions of the False Claims Act ("FCA").17 Similar to the Court in Morrison, the Sixth Circuit relied on several features of the FCA in concluding that it was "crafted with particular care to maintain the primacy of the Executive Branch in prosecuting false-claims actions."18
The FCA is "the benchmark for evaluating other statutes claimed to be qui tam statutes."19 Thus, the Unique Product Solutions court compared the provisions of the FCA that permit Executive Branch control of the prosecutorial powers of qui tam relators with the provisions of Section 292 in concluding that the false marking statute lacks the necessary safeguards constitutionally required by the Take Care Clause. Under the FCA, for example, the government retains the right (1) to be notified of the filing of the case before the defendant is served; (2) to intervene as a matter of right within 60 days of the commencement of the action or for good cause thereafter; (3) to take primary responsibility for prosecuting the action if it intervenes and to limit the relator's participation; (4) to move for dismissal or settlement and to prevent dismissal by the relator; and (5) to not be bound by the relator's actions if it intervenes.20
In contrast to the FCA, Section 292 contains no similar notice and control provisions: (1) there is no requirement that the government be served with the complaint or any relevant pleadings; (2) the Director of the U.S. Patent and Trademark Office is notified, but the notice is the same as that which is required for all patent suits, and is not specific to Section 292 actions; (3) the case can be litigated without any control or oversight by the Department of Justice; (4) the government has no statutory right to intervene nor does it have a right to limit the participation of the relator; (5) the government does not have the right to stay discovery or dismiss the action; and (6) the relator may settle the case and bind the government without any involvement or approval by the Department of Justice.21 Given the absence of any certain governmental control over an action arising under Section 292, the court concluded that Section 292 was unconstitutional under the Take Care Clause and that it intrudes on the Executive's Article II power and interferes with the President's constitutionally assigned duties.22
The Unique Product Solutions case is currently on appeal to the Federal Circuit.23 As of the time of this article, Unique Product Solutions ("UPS") and the United States Government have each filed their opening briefs. They argue that the historical use of qui tam provisions in federal statutes supports the constitutionality of Section 292(b), and that the district court erred in relying on Morrison.24 While UPS contends that the district court mischaracterized the false marking statute as a criminal statute,25 the United States appears to acknowledge that the statute is not "easily classified." Under either scenario, however, the United States asserts that § 292(b) does not interfere with the President's duties.26
The Intellectual Property Owners Association ("IPO") filed an amicus brief in support of neither party, asking the Federal Circuit to review the case en banc and "[r]ather than continuing the piecemeal development of the law of false patent marking[,] . . . address, in one place, the intertwined statutory, constitutional and public policy issues raised by section 292."27 For example, IPO questioned imposing penalties on a per article basis, interpreting "unpatented article" to include an article covered by a now-expired patent, and requiring only a preponderance of the evidence, a relatively low burden of proof, for deceptive intent.28 IPO also invited the court to revisit the standing issue decided in Stauffer29 and to decide whether the use of civil procedures to enforce the criminal penalty imposed by Section 292(b) violates the Due Process Clause of the U.S. Constitution.30
The Federal Circuit, however, may not wait for the Unique Product Solutions appeal to address the constitutionality of Section 292(b) under the Take Care Clause. The court held oral argument in FLFMC, LLC v. Wham-O, Inc.31 on July 7, 2011, during which the parties and the United States Government addressed whether the statute provides sufficient governmental control over a false marking action and whether government control is required in the first instance. Although the district court did not reach the constitutional question,32 the Federal Circuit panel hearing the parties' arguments did not object to addressing the issue ab initio on appeal.33
As noted in our earlier article, Unique Product Solutions appears to be the first court decision finding the qui tam provision of Section 292(b) unconstitutional. And, with the sole exception of Rogers (discussed infra), it appears that each court to consider this issue after Unique Product Solutions rejected its reasoning and found the provision constitutional.34 Each of those courts followed a relatively similar analysis in reaching that conclusion.
First, they generally agreed that a qui tam action under Section 292(b) is a civil, not criminal, action, although it arises under a criminal statute.35 As the court in Luka explained, "the better view of the false marking statute is that it is a criminal statute with a parallel civil enforcement mechanism."36 Second, because Section 292 is a civil action, "the direct-control test espoused by the Supreme Court in Morrison does not apply to the same degree in this setting . . . and thus requires a lesser degree of governmental control."37 Viewing a false marking suit as a civil action, these courts further found that "the government maintains a sufficient level of control" based on (1) the notice requirement under 35 U.S.C. Section 290, (2) the government's ability to intervene under Fed. R. Civ. P. 24; and (3) the requirement that the government consent before a relator can dismiss a pending suit, if the government intervenes.38
Judge Murphy's analysis from the Southern District of Illinois in Buehlhorn and Ford, in which he found Section 292(b) constitutional, however, was slightly different. In those decisions, the court, which is within the Seventh Judicial Circuit, characterized the Unique Product Solutions decision as accepting Sixth Circuit law (United States ex rel. Taxpayers Against Fraud) over Fifth Circuit law (Riley).39 The court noted that neither circuit decision was binding upon it and that the Federal Circuit has yet to address the issue, but expressed its view that the Federal Circuit would find the statute constitutional were the circuit to address the issue.40 Perhaps most interesting, however, is that the court ordered the relators in each case to expressly give notice over and above the Section 290 notice, by "serv[ing] a copy of their amended complaint, along with a copy of this Memorandum and Order, upon the United States Attorney for the Southern District of Illinois."41
On June 2, 2011, in Rogers v. Tristar Products, Inc., the Easter District of Pennsylvania became the second district court to find Section 292(b) unconstitutional under the Take Care Clause.42 In Rogers, the plaintiff, Bruce Rogers, alleged that defendant Tristar Products, Inc. ("Tristar") advertised its "Power Juicer" line of products as having "Patented Extraction Technology" in infomercials and on websites, even though the only patent held for the Power Juicer line was a Chinese patent that covered the product line's design aspects.43 Thus, Rogers alleged that Tristar's claims of having a patent on the Power Juicer's functional aspects, including juice extraction, were false and misleading.44
Addressing Tristar's contention that the qui tam provision of Section 292 was unconstitutional, the court provided an extensive discussion of the legislative history of qui tam statutes and Section 292, as well as the recent court decisions involving Section 292's constitutionality. The court framed the issue as "whether the False Marking Statute's qui tam provision violates separation of powers by impermissibly undermining the President's ability to 'take Care that the Laws be faithfully executed.'"45
As an important initial inquiry, the Court determined that Morrison's sufficient control test applies to the constitutional inquiry for two reasons. First, in the court's view, "the very nature of qui tam actions necessarily requires inquiry into whether the relevant qui tam provision affords the Executive Branch 'sufficient control . . . to ensure that the President is able to perform his constitutionally assigned duties.'"46 In other words, qui tam statutes reflect at least some delegation of the Executive Branch's authority, and thus "it is necessary to carefully evaluate whether, under the circumstances, the delegation made offends the Constitution's structural protections."47 And, Morrison's test "facilitates this type of inquiry."48
Second, the court agreed with Unique Product Solutions that Section 292(b) "represents the very delegation of criminal law enforcement authority that Morrison's test was designed to assess."49 Relying on Section 292's legislative history, the court noted that "a key purpose of the 1952 amendment was to transform the statute into an ordinary criminal statue with a private enforcement mechanism."50 Additionally, the court reiterated the Federal Circuit's statement in Pequignot, that "the false marking statute is a criminal one, despite being punishable only with a civil fine" and that the qui tam provision "arises under a criminal statute."51
Applying Morrison, the court held that Section 292 fails to provide the Executive Branch sufficient safeguards under the Take Care Clause to perform his constitutionally assigned duties.52 The court undertook substantially the same analysis performed by Unique Product Solutions and compared the false marking statute with the FCA.53 Ultimately, the court concluded that Section 292's qui tam provision: (1) permits any person to sue; (2) requires no notice outside of Section 290's general notice of all patent suits; and (3) provides no means by which the United States may control "the initiation, prosecution, or termination of litigation commenced on its behalf."54 "Under these circumstances, the statute 'essentially represents a wholesale delegation of criminal law enforcement power to private citizens with no control exercised by the Department of Justice.'"55
The court also addressed "the supposed protections created by other sources of law," but found that they "simply do not suffice to ensure that the President can take care that the laws of the United States be properly carried out."56 First, the court concluded that Section 290's general notice requirement was insufficient because such notice was not expedient enough—it required notice to the U.S. Patent and Trademark Office for all patent cases within one month of filing, but by that time, a given case could already be settled—and the notice was not directed to the Department of Justice, the agency responsible for representing the United States' interests in a false marking suit.57 Second, the court rejected the availability of intervention under the Federal Rules of Civil Procedure because it was not guaranteed that every court would necessarily grant intervention to the United States and, if the United States did not intervene, it could not prevent a relator from voluntarily dismissing a false marking case.58
Thus, Rogers concluded that "despite the external protections available, the United States is not able to effectively exercise even a basic degree of control over a section § 292(b) relator's case," and, by bringing suit, a relator is "the master of the suit and-unlike in the [FCA] context-remains as such."59 Accordingly, Rogers held Section 292(b) unconstitutional.60
A recent decision by the Federal Circuit indicates that the court is willing to put some limitations on the ability of complainants to assert false marking claims. In In re BP Lubricants, the Federal Circuit held that Fed. R. Civ. P. 9(b)'s particularity requirement applies to false marking claims and that a complaint must provide "some objective indication to reasonably infer that the defendant was aware that the patent expired."61 Following In re BP Lubricants, a majority of district courts considering motions to dismiss false marking complaints under Rule 9(b) granted the motions without prejudice.
It is instructive, however, to consider the objective indicia that several district courts found sufficient, in light of In re BP Lubricants, to support a reasonable inference that a defendant was aware that its patent had expired and to survive a Rule 9(b) motion to dismiss.62 Interestingly, the Rogers decision, discussed supra in the context of Section 292(b)'s constitutionality, denied the defendant's motion to dismiss.63 The court concluded that Rogers' complaint survived Rule 9(b) because it alleged that the functional aspects of the Power Juicer line of products at issue were not covered by any of the defendant's patents and the defendant advertised otherwise on its website and during infomercials.64 Thus, the court reasoned that knowledge and intent "can be readily inferred because the facts pled, if true, can establish that defendant's advertisements were a complete falsity."65
Beyond the courts, Congress is weighing in on this issue too. Following the U.S. Senate's passage of the Patent Reform Act of 2011 (S. 23) on March 8, the U.S. House of Representatives passed the "America Invents Act'' (H.R. 1249) on June 23, 2011. Each bill amends the false marking statute in two ways. First, "[o]nly the United States" would be able to "sue for the penalty authorized by . . . subsection" (a).66 Second, subsection (b) would be replaced with a clause allowing any person "who has suffered a competitive injury as a result of a violation of this section" to "file a civil action . . . for recovery of damages adequate to compensate for the injury."67
In addition, H.R. 1249 includes new subsection 292(c)(1), which provides a three-year safe harbor from liability under subsection (a) for expired patents, and new subsection 292(c)(2), which provides a full release following the three-year safe harbor from liability under subsection (a) if the word "expired" is placed before the patent marking on the article or in a posting on the Internet in accordance with revised Section 287(a) (which allows for virtual patent marking).68 The amendments, if passed, would apply to all false marking cases pending on or after the date of enactment.69 At this point, many are waiting to see if, and how, the Senate and House bills will be reconciled to determine the ultimate effect on Section 292.
Accordingly, it may be a race between the Federal Circuit and Congress in deciding Section 292's fate. Whether the statute may be the subject of congressional amendments or whether the Federal Circuit will consider the constitutional question in Wham-O or wait for Unique Product Solutions, only time will tell. And, although it appears that the proposed congressional amendments to Section 292 will likely remedy the potential constitutional infirmities under the Take Care Clause of the Constitution, it may be the courts, and, in particular, the Federal Circuit, that will need to speak to the issue to provide the public with some degree of certainty.
Endnotes
1 In 2009, roughly 30 suits were filed, as compared to almost 800 new false marking suits in 2010. In addition, in the second quarter of 2011, from April through June 2011, there were approximately 33 new false marking cases as compared to 337 in the first quarter of the year. See http://www.grayon-claims.com/false-marking-case-information/ (link not active as of 5/2/2012), see also http://www.falsemarking.net/district.php (link not active as of 5/2/2012).
2 In Forest Group, the Federal Circuit interpreted the false marking statute, 35 U.S.C. § 292, to authorize fines up to $500 for every falsely marked article. See Forest Group, Inc. v. Bon Tool Co., 590 F.3d 1295, 1304 (Fed. Cir. 2009).
3 Special thanks to Rob MacKichan for preparing the above graph representing the number of new false marking cases filed each month since July 2009.
4 Holtman, MA, Yang, Z, & Gerstenblith, BA, Stemming the Tide of False Marking Cases, Bloomberg Law Reports – Intellectual Property, Vol. 5, No. 20 (May 16, 2011).
5 See Unique Prod. Solutions, Ltd. v. Hi-Grade Valve, Inc., No. 10-CV-1912, 2011 BL 65636 (N.D. Ohio Mar. 14, 2011).
6 See Rogers v. Tristar Prods., Inc., No. 11-CV-1111, 2011 BL 146440 (E.D. PA. June 2, 2011).
7 In re BP Lubricants USA Inc., 637 F.3d 1307, 1311 (Fed. Cir. 2011).
8 See infra Section III.
9 35 U.S.C. § 292 (2006). Section 292(b) is one of only a few federal qui tam provisions, i.e., "a statute that authorizes someone to pursue an action on behalf of the government as well as himself." Stauffer v. Brooks Bros., Inc., 619 F.3d 1321, 1325 (Fed. Cir. 2010) (internal quotation marks omitted). On its face, Section 292(b) permits "any person" to sue for a penalty of $500 for every false marking offense with the caveat that any recovery is equally split with the United States.
10 Unique Prod. Solutions, Ltd. v. Hi-Grade Valve, Inc. 765 F. Supp. 2d 997 (N.D. Ohio Feb. 23, 2011), affirmed after reconsideration in Unique Prod. Solutions, No. 10-CV-1912, 2011 BL 65636 (N.D. Ohio Mar. 14, 2011).
11 U.S. Const. Art. II, § 3.
12 487 U.S. 654 (1988).
13 The EGA allows Congress to appoint independent counsel to investigate and prosecute high ranking government officials for violations of federal criminal law. Id. at 660.
14 Id.
15 Id. at 696.
16 41 F.3d 1032 (6th Cir. 1994).
17 The Northern District of Ohio acknowledged that the false marking statute can be construed as "criminal, civil, or . . . a civil-criminal hybrid," but that under any of those interpretations, Morrison's "sufficient control" analysis would apply because the analysis is not limited to criminal statutes. Unique Prod. Solutions, 2011 BL 65636 at *5 (citing Taxpayers, 41 F.3d 1032 (6th Cir. 1994) (applying Morrison's "sufficient control" analysis to a civil statute)). Highlighting the confusion regarding the civil/criminal classification of the statute, the district court noted that the Federal Circuit previously stated that "a qui tam action is civil in form, even though it arises under a criminal statute." Id. (quoting Pequignot v. Solo Cup Co., 608 F.3d 1356, 1363 (Fed. Cir. 2010)).
18 Taxpayers, 41 F.3d at 1041. In fact, the U.S. Courts of Appeals for the Ninth and Tenth Circuits also applied the "sufficient control" test in analyzing whether the FCA violates the Take Care Clause. See, e.g., United States ex rel. Kelly v. Boeing Co., 9 F.3d 743, 751 (9th Cir. 1993) ("Morrison provides a baseline against which [courts] may assess whether Congress has unconstitutionally diminished executive power by permitting private plaintiffs to sue in the name of the United States . . . ."); Id. at 757 ("[T]he FCA affords the Executive Branch a degree of control over qui tam relators that is not distinguishable from the degree of control the Morrison Court found the Executive Branch exercises over independent counsels."); United States ex rel. Stone v. Rockwell Int'l Corp., 282 F.3d 787, 807 (10th Cir. 2002) (noting with approval the Sixth Circuit's reliance on Morrison's "sufficient control" test to uphold the constitutionality of the FCA in light of a challenge under the Take Care Clause).
Even the U.S. Court of Appeals for the Fifth Circuit, despite stating that Morrison was "inapplicable" in analyzing the constitutionality of the qui tam statutes, essentially applied the "sufficient control" test sans the label. See Riley v. St. Luke's Episcopal Hosp., 252 F.3d 749, 753-57 (5th Cir. 2001) (en banc) (observing that "the Executive [Branch] retains significant control over litigation pursued under the FCA by a qui tam relator" and upholding the statute "given the control mechanisms inherent in the FCA to mitigate" any intrusion in the Executive's Article II powers).
19 Stalley v. Methodist Healthcare, 517 F. 3d 911, 917 (6th Cir. 2008).
20 See 31 U.S.C. § 3730 (2006).
21 See 35 U.S.C. § 292 (2006); Unique Prod. Solutions, 2011 BL 65636 at *6. The district court noted that even though the government may be able to intervene as a matter of right pursuant to Fed. R. Civ. P. 24, that does not "guarantee that the government will receive timely notice of a False Marking Suit such that it will be able to intervene prior to the suit settling and the government being foreclosed from bringing its own suit." Unique Prod. Solutions, 2011 BL 65636 at *6. In fact, in FLFMC, LLC v. Wham-O, Inc., discussed further herein, no notice was given to or received by the Patent Office, likely because FLFMC listed the nature of the suit as a "Forfeiture/Penalty." See Appellee Wham-O's brief at 20 (Appeal No. 2011-1067). Similarly, the government was never notified that it could split the potential $10.8 trillion fine in Pequignot v. Solo Cup Co., because the relator in that case listed the case as "Other Statutory Action." Id. at 20-21.
22 The district court also rejected the argument that qui tam statutes' long tenure in American jurisprudence confirms their constitutionality because the issue under consideration was not the constitutionality of such statutes in general; rather, it was the constitutionality of Section 292 in particular. Unique Prod. Solutions, 2011 BL 65636 at *6.
23 The United States, as intervenor, appealed the case to the Federal Circuit.
24 See Unique Prod. Solutions, Ltd. v. Hi-Grade Valve, Inc., Appeal Nos. 2011- 1254, -1284, Corrected Brief of Plaintiff-Appellant Unique Product Solutions, Limited ("UPS Brief"), at 8-10; Brief for the United States ("U.S. Brief"), at 16-32, 48-50.
25 See UPS Brief at 10; U.S. Brief at 47.
26 See U.S. Brief at 32-48.
27 Unique Prod. Solutions, Ltd. v. Hi-Grade Valve, Inc., Appeal Nos. 2011- 1254, -1284, Brief of Amicus Curie Intellectual Property Owners Association in Support of Neither Party ("IPO Brief"), at 9.
28 IPO Brief at 9-14 (raising questions about the Federal Circuit's decisions in Forest Group, Pequignot, and Clontech Labs., Inc. v. Invitrogen Corp., 406 F.3d 1347, 1352-53 (Fed. Cir. 2005)).
29 Id. at 15-17 (citing Stauffer v. Brooks Brothers, Inc., 619 F.3d 1321, 1325 (Fed. Cir. 2010)). In Stauffer, the Federal Circuit held that a relator can establish standing based on the United States' implicit assignment of its damages claim to "any person." 619 F.3d at 1325. "In other words, even though a relator may suffer no injury himself, a qui tam provision operates as a statutory assignment of the United States' rights, and 'the assignee of a claim has standing to assert the injury in fact suffered by the assignor.'" Id. (quoting Vermont Agency, 529 U.S. at 773). In reaching that conclusion, the Federal Circuit "express[ed] no view as to whether section 292 addresses a proprietary or a sovereign injury of the United States, or both." Id. at 1326. It is unclear whether courts, when analyzing the constitutionality of Section 292, will make any distinction based on whether standing is predicated on the government's sovereign interest as compared to its proprietary interest.
30 IPO Brief at 19-22.
31 Appeal No. 2011-1067.
32 In the district court, Wham-O sought to dismiss the case based on FLFMC's lack of standing and challenges to the constitutionality of Section 292 under the "Take Care" and "Appointments" Clauses of the Constitution. United States ex rel. FLFMC, LLC v. Wham-O, Inc., No. 10-CV-00435, 2010 BL 177764 at *2 n.2 (W.D. Pa. Aug. 3, 2010). In granting Wham-O's motion to dismiss, however, the district court only addressed standing and did not reach the constitutional questions. Given the intervening Stauffer decision by the Federal Circuit, which essentially rejected the standing conclusion reached by the district court in Wham-O, Wham-O relied primarily on its constitutionality challenges to Section 292 in its appellate briefs.
33 See recording of oral argument, available at http://www.cafc.uscourts.gov/oral-argument-recordings/search/audio.html.
34See, e.g., Simonian v. Allergan, Inc., No. 10-CV-2414, 2011 BL 113095 (N.D. Ill. Apr. 28, 2011); Luka v. Procter & Gamble Co., No. 10-CV-02511, 2011 BL 81029 (N.D. Ill. Mar. 28, 2011); Public Patent Found., Inc. v. GlaxoSmithKline Consumer Healthcare, L.P., No. 09-CV-05881 (S.D.N.Y. Mar. 22, 2011); Buehlhorn v. Univ. Valve Co., No. 10-CV-00559, 2011 BL 86423 (S.D. Ill. Mar. 31, 2011); Ford v. Hubbell Inc., No. 10-CV-00513, 2011 BL 86422 (S.D. Ill. Mar. 31, 2011).
35 See Simonian, 2011 BL 113095 at *8 (finding that Section 292 is a civil action); Luka, 2011 BL 81029 at *15 (same); Public Patent Found., Inc., 09-CV-005881 (same).
36 Luka, 2011 BL 81029 at *15.
37 Simonian, 2011 BL 113095 at *8; see also Luka, 2011 BL 81029 at *15 (noting that although the Sixth Circuit, in Taxpayers Against Fraud, "cited Morrison, it did not require the same degree of control that the Supreme Court deemed sufficient in Morrison").
38 See Simonian, 2011 BL 113095 at *8-9; Luka, 2011 BL 81029 at *14; Public Patent Found., 09-CV-005881. Unique Product Solutions focused on the flip side of this view—the government's inability to preclude dismissal if it had not intervened. See Unique Prod. Solutions, 2011 BL 65636 at *6.
39 See Buehlhorn, 2011 BL 86423 at *6-7; Ford, 2011 BL 86422 at *6.
40 See Buehlhorn, 2011 BL 86423 at *7; Ford, 2011 BL 86422 at *6.
41 See Buehlhorn, 2011 BL 86423 at *7; see also Ford, 2011 BL 86422 at *6.
42 The court did so after acknowledging that "to date, every . . . court [other than the Unique Solution Products court] that has considered section 292(b)'s constitutionality under Article II has rejected the challenge asserted." Rogers v. Tristar Products, Inc., —-F. Supp. 2d __, No. 11-CV-01111, 2011 BL 146440 at *22 (E.D. Pa. June 2, 2011).
43 Id. at *4.
44 Id.
45 Id. at *25. As discussed infra, the court first addressed Tristar's motion to dismiss pursuant to Rule 9(b), concluding that Rogers' claims were pled with particularity. See id. at *7-10.
46 Id. at *26 (quoting Morrison, 487 U.S. 696).
47 Id.
48 Id.
49 Id. at *27. The court recognized that the legislative history of the statute included a 1952 amendment that, as indicated in Senate Report No. 82-1979, "makes it an ordinary criminal action as well as informer action." Id. at *12 (quoting S. Rep. No. 82-1979, at 9 (1952), reprinted in 1952 U.S.C.C.A.N. 2394, 2403).
50 Id. at *27 ("That the private enforcement mechanism happens to be civil in form does not change the fact that the wrong for which it enables relators to seek redress is the injury the United States suffers when a person or entity violates federal law.").
51 Id. (quoting Pequignot, 608 F.3d at 1363). In so doing, Rogers disagreed with the conclusion reached by several of the court decisions discussed in the previous section, supra, that considered the statute to be civil rather than criminal.
52 Id. at *28.
53 Id. at *28-30.
54 Id. at *29.
55 Id. (quoting Unique Product Solutions, 765 F. Supp. 2d at 1005).
56 Id. at *30.
57 Id.
58 Id. at *31.
59 Id. at *31-32.
60 Id. at *32. On June 10 and 27, 2011, respectively, Rogers and the United States, as intervenor, each filed a Notice of Appeal to the Federal Circuit. Although the question of Section 292's constitutionality will likely be decided by Wham-O or Unique Product Solutions, Rogers provides a thorough analysis of the legislative history that may be instructive to the Federal Circuit's consideration of the issue.
61 In re BP Lubricants, 637 F.3d at 1311 (emphasis added).
62 See, e.g., Luka 2011 BL 81029 (patents allegedly falsely marked were identified in a license agreement that listed their expiration dates and placed an affirmative obligation on the licensee to comply with the patent marking law); Public Patent Found., No. 09-CV-05881 (patent were the subject of litigation close in time to their expiration dates and articles were marked after patent expiration); Hollander v. Ortho-McNeil-Janssen Pharms., Inc., No. 10-CV-00836, 2011 BL 90894 (E.D. Pa. Apr. 5, 2011) (generic drug applications referred to patent expiration dates as dates of intended market entry); Sunshine Kids Juvenile Prods., LLC v. Ind. Mills & Mfg., No. 10-CV-05697 (W.D. Wash. May 24, 2011) (denying reconsideration of the court's order denying defendant's motion to dismiss under Rule 9(b) because the complaint alleged that defendant's employees admitted knowledge of patent expiration and that defendant revised its patent markings after expiration); Rogers v. Conair Corp., No. 10-CV-01497, 2011 BL 126460 (E.D. Pa. May 12, 2011) (complaint alleged that defendant revised its patent markings multiple times and continued to mark its products and website even after the PTO sent four letters to defendant stating that patents had been abandoned and a diligent search by plaintiff revealed no other patents or pending patent applications).
63 Rogers, 2011 BL 146440 at *7-10.
64 See id.
65 Id. at *3.
66 S. 23, Section 2, Subsection (k)(1)(A); H.R. 1249, Section 16(b)(1).
67 S. 23, Section 2, Subsection (k)(1)(B); H.R. 1249, Section 16(b)(2).
68 See H.R. 1249, Section 16(b)(3).
69 S. 23, Section 2, Subsection (k)(2); H.R. 1249, Section 16(b)(4).
©Bloomberg Finance L.P. 2011. Originally published by Bloomberg Finance L.P. Reprinted by permission. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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Finnegan is thrilled to announce the launch of our new blog, Ad Law Buzz, devoted solely to breaking news, developments, trends, and analysis in advertising law.