The U.S. Court of Appeals for the Federal Circuit's decision yesterday (.pdf) in Stauffer v. Brooks Bros., Inc. will impact numerous other similar "fall marking" suits across the country (see Reuters feed here).The dispute concerned a patent attorney's accusation that Brooks Brook Brothers was selling "Adjustolox" bow ties that were marked as patented. However, the patent expired in the 1950s. Stauffer commenced a qui tam action under 35 U.S.C. sec. 292 alleging that Brooks Brothers had falsely marked its bow ties. Brooks Brothers argued that Stauffer had no standing to file the suit because he was not harmed by the erroneous information. The district court agreed.
The federal appeals court reversed that ruling and remanded the matter to the district court. The Federal Circuit ruled the law did not require Stauffer to be injured by the false marking, but quoted the statute as providing that "any person may sue for the penalty."
Several "false marking" cases had been stayed pending resolution of this matter. Upon learning of this decision, those cases commenced by the Public Patent Foundation will now go forward against several large corporations. The penalties in false marking cases can be substantial. The Federal Circuit late last year held that the fine for claiming a nonexistent or expired patent was $500 per device sold. That type of penalty can add up quickly based on a seemingly technical error and violation of a statute. A person like Stauffer, who inexplicably admitted to wearing a bow tie almost every day, could find a small goldmine in his closet. Half the monetary penalty goes to the person who instituted the suit and the other half goes to the United States government.
What are your thoughts? Should procedures for expired be reviewed and revised?