May 23, 2012

A Federal District Court Rules That The Qui Tam Provision of the False Marking Statute is Unconstitutional

Unique Product Solutions, Ltd. v. Hy-Grade Valve, Inc. on February 23, 2011

Judge Polster of the U.S. District Court for the Northern District of Ohio held that the qui tam provision of the false patent marking statute, 35 U.S.C. § 292, is unconstitutional because it violates the take care clause of Article II of the Constitution.  The court granted the defendant’s motion to dismiss on these grounds in Unique Products Solutions, Ltd. v Hy-Grade Valve, Inc

qui tam statute allows a private individual to prosecute a claim on behalf of the government and receive part of any penalty imposed.  Such statutes must pass constitutional muster and allow for the president to “take Care that the Laws be faithfully executed.”  Simply put, this means that the executive branch must be able to exercise sufficient control over the litigation when the United States is a real party in interest.  The false patent marking statute allows for any person to sue an entity believed to have falsely marked its products with an intent to deceive the public.  Penalties recovered, up to $500 for each offense, are shared equally between the person bringing the suit and the United States. 

© MICHAEL BEST & FRIEDRICH LLP

About the Author

Partner

Ed Sarskas is a Co-Chair of the firm’s Class Action/ MDL Team and a partner in the firm’s Litigation and Intellectual Property Litigation Practice Groups. Mr. Sarskas has significant experience handling complex commercial litigation concerning intellectual property rights, including patents, trademarks and copyrights, as well as unfair competition, advertising, trade secrets, and related contract disputes. Mr. Sarskas also has experience handling securities and corporate governance litigation in individual and class actions, including in In re Enron Securities Litigation...

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