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Too little, too late: Federal Circuit holds that cessation of sales does not alleviate patentee’s affirmative duty to mark

In a February 19, 2020 decision the Federal Circuit held that a patentee does not escape 35 U.S.C. § 287’s marking requirement merely by ceasing sales of the practicing product.  Instead, the Federal Circuit held that once a patentee (or its licensees) sell articles that practice the patent, the obligation to mark in order to obtain pre-suit damages continues regardless of whether sales of the product in question cease.  This requirement furthers the purpose of § 287, which places a burden on the patentee to provide notice to the world that products in the market practice the patent in question.

In Arctic Cat Inc. v. Bombardier Recreational Products, Inc., No. 2019-1080, Arctic Cat sued Bombardier for infringement of U.S. Patent Nos. 6,793,545 and 6,568,969 relating to thrust steering systems for personal watercraft. Arctic Cat itself, however, had ceased offering any covered products before the patents issued and instead entered into a licensing agreement with Honda that did not obligate Honda to mark any of its product offerings with the asserted patents. Despite the fact that Honda’s products were unmarked, there was evidence that Honda had ceased making any covered products approximately a year before Arctic Cat brought suit against Bombardier.

The lower court found Bombardier to be a willful infringer and ordered Bombardier to pay pre-suit damages.  Bombardier appealed these findings to the Federal Circuit.  In finding for Bombardier, the Federal Circuit held that the mere cessation of sales of unmarked products, without any other curative action taken by the patentee, did not cure Arctic Cat’s noncompliance with § 287 and that Arctic Cat was therefore ineligible for past damages: “Thus, once a patentee begins making or selling a patented article, the notice requirement attaches, and the obligation imposed by § 287 is discharged only by providing actual or constructive notice.” (Slip op. at 8).

The Federal Circuit, citing Amsted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 187 (Fed. Cir. 1994), rejected Arctic Cat’s further argument that willful infringement, which requires knowledge of the patent, entitled Arctic Cat to past damages, as the marking statute places a burden on the patentee, and is not directed to what an infringer actually knows.  Having failed to mark, the Court found that Arctic Cat could not satisfy § 287.

The rationale of Arctic Cat suggests that the last status of the goods sold by a patentee before cessation of sale—whether the goods were compliant or non-compliant with the marking statute—will be accorded to the period between the cessation of sales and the provision of actual notice or the filing of suit against an accused infringer. Non-practicing entities, on the other hand, remain unaffected by the marking requirement of § 287.  As a result, patentees considering whether to cease the sale of products covered by their patents should ensure that they have undertaken measures to put themselves in compliance with § 287 before stopping sales (See, e.g. Am. Med. Sys. v. Med. Eng'g Corp., 6 F.3d 1523, 1537-38 (Fed. Cir. 1993) for exemplary marking statute requirements) or subsequently provide actual notice to known infringers—because they cannot bootstrap themselves into the privileged status of a non-practicing entity simply by the formal fact of no longer selling unmarked goods.

©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume X, Number 57

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About this Author

Daniel B. Weinger Patent Litigation Attorney Mintz Law Firm
Member

Daniel's practice in intellectual property focuses on patent litigation, both at the International Trade Commission and the Federal District Courts. Daniel has participated in all phases of patent litigation, including active engagement in multiple evidentiary hearings at the International Trade Commission. He has done work in a variety of technology areas, including computer software, software architecture, GPS, network devices, semiconductors, converged devices, and LED lighting.

Prior to joining Mintz Levin, Daniel worked as a database...

617-348-1629
Vincent M. Ferraro, Mintz Levin, Patent Litigation Licensing & Technology Transactions Strategic IP Monetization & Licensing IPRs & Other Post-Grant Proceedings Federal District Court
Associate

Vincent’s practice focuses on patent disputes in Federal District Courts and before the U.S. Patent Trial and Appeal Board. With over 10 years of experience, Vincent has handled patent disputes involving telecommunications, cellphone and smartphone technology, digital photography, image processing, electronic circuitry, electrical components, computer software and hardware, LCD technology, data mining, financing, mechanical devices, medical devices and implants, consumer products, GPS technology, e-commerce, and Internet security. In patent litigation cases, he guides clients through all phases of the case, including pre-suit due diligence, claim construction, discovery, depositions, hearings, and trial.

Vincent also has significant experience representing clients in post-grant proceedings before the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office, including inter partes review (IPR) and covered business method (CBM) patent review proceedings. He has represented both petitioners and patent owners in these proceedings.

Vincent also regularly counsels clients on their IP portfolio strategies and assists them in developing design strategies for their products. He works closely with inventors, analyzes new inventions, drafts U.S. patent applications, and prosecutes patents before the U.S. Patent and Trademark Office in various high-technology fields and on consumer products. He also renders patent freedom-to-operate and validity opinions.

212.692.6214
Harold Laidlaw, Mintz Levin Law Firm, Patent Litigation Attorney
Associate

Harold’s practice focuses on intellectual property and patent litigation. He has experience in a broad range of technology areas.

Prior to joining the firm, Harold worked as an associate in the IP Litigation Group at a global law firm in New York. He focused primarily on patent litigation with an emphasis on technical subject matter in computing and software.

During law school, Harold served as notes editor to the Annual Survey of American Law and as a legal volunteer at a nonprofit...

212-692-6221