Thursday, May 07, 2015

CAFC analyzes 35 USC 292 in Sukumar v. Nautilus

Changes in the patent marking law brought about by the AIA are analyzed in Sukumar v. Nautilus.

Bottom line:
Accordingly, we affirm the district court’s grant of summary 
judgment for Nautilus on Sukumar’s false marking and state law 

Resort to legislative history is made:
Because the text of the statute is inconclusive, we
next consider the legislative history. The House of Representatives’
report on the AIA provides the most succinct
summary of congressional intent with respect to the
amendments to § 292. The report notes a recent “surge in
false-marking qui tam litigation” and explains that most
of the new suits involve a product that was originally
properly marked, but no longer was once the patent
expired. H.R. Rep. 112-98, 53, 2011 U.S.C.C.A.N. 67, 84.
According to the report, “[i]t is doubtful that the Congress
that originally enacted this section anticipated that it
would force manufacturers to immediately remove
marked products from commerce once the patent expired,
given that the expense to manufacturers of doing so will
generally greatly outweigh any conceivable harm of
allowing such products to continue to circulate in commerce.”

But note:
Nautilus seizes on the language that “competitors
may recover in relation to actual injuries that they have
suffered as a result of false marking” to argue that only
current market participants have standing to bring a
false marking action. But the use of the word “competitors”
just begs the question of what “competitors” means.
In the same sentence, the report juxtaposes “competitors”
with “unrelated, private third parties.” Entities actively
attempting to enter the market are not “unrelated, private
third parties.” As such, the legislative history is

Jefferson Parish is mentioned:
In that context,preventing market entry unquestionably qualifies 
as“injury to competition.” For example, the Supreme Court
has held that injury to competition includes “creat[ing]
barriers to entry of new competitors in the market.”
Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 14
(1984), abrogated in part on other grounds by Ill. Tool
Works Inc. v. Indep. Ink, Inc., 547 U.S. 28 (2006). In
addition, the Ninth Circuit has stated that “[v]ertical
agreements that foreclose competitors from entering or
competing in a market can injure competition by reducing
the competitive threat those competitors would pose.”
Brantley v. NBC Universal, Inc., 675 F.3d 1192, 1198 (9th
Cir. 2012).



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