New York Federal District Court Addresses the Pleading Standard and Constitutionality of False Patent Marking Claims Under 35 U.S.C. § 292
In Public Patent Foundation, Inc. v. Glaxosmithkline Consumer Healthcare, the Southern District of New York addressed the pleading standard applicable to a false marking claim brought pursuant to 35 U.S.C. § 292, and the constitutionality of that statute. Glaxosmithkline (“GSK”) moved to dismiss Public Patent Foundation (“PPF's”) claims because PPF’s allegations of GSK’s intent to deceive the public did not satisfy the heightened pleading requirements of Rule 9(b), and Section 292 is unconstitutional because it improperly delegates the responsibilities of the Executive Branch to the public.
The Court first determined that PPF had sufficiently pled intent to deceive the public for two of the three patents at issue. The Court found that PPF’s allegations that GSK had sued on those two patents in 2000 and 2004, shortly before they expired in 2005, would have given GSK sufficient familiarity with the patents, including their expiration dates, that the Court could infer intent to deceive the public when GSK began marking products with those patents in 2007. There were no allegations, however, that GSK ever brought suit on the third patent and the Court rejected PPF’s argument that GSK is a sophisticated company and should have been aware of the patent and its expiration date. The Court thereby denied GSK’s motion to dismiss with regard to the first two patents and granted it with regard to the third.
The Court then turned to GSK’s argument that Section 292 is unconstitutional because “it does not give the Executive Branch ‘sufficient control’ over a private citizen’s suit brought on behalf of the United States.” The Court rejected this argument, citing a number of ways the Executive Branch can and has intervened and exercised control over Section 292 qui tam actions. The Court further distinguished the recent Northern District of Ohio court’s ruling that Section 292 is unconstitutional because it is a “wholesale delegation of criminal law enforcement power to private entities.” The Court concluded that, despite the fact that Section 292 arises under a criminal statute, it is, in fact, civil in nature. Specifically, the Court noted that Section 292 only authorizes one type of suit and does not amount to criminal law enforcement power. Thus, the Court denied GSK’s motion to dismiss the false marking claim on the basis of Section 292’s unconstitutionality.