Tuesday, March 15, 2011

CAFC rules for BP Lubricants USA in False Marking case

The punchline:

The defendant’s motion,
based on this court’s Fed. R. Civ. P. 9(b) standard in
Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312,
1327 (Fed. Cir. 2009), urged that the relator’s complaint
failed to allege any underlying facts upon which a court
could reasonably infer that BP knew its patent had
expired when it was marking its products.

This court holds that Rule 9(b)’s particularity
requirement applies to false marking claims
and that a
complaint alleging false marking is insufficient when it
only asserts conclusory allegations that a defendant is a
“sophisticated company” and “knew or should have
known” that the patent expired. The petition is granted
in part.

Procedurally, this involved a writ of mandamus:

This court is authorized to issue a writ of
mandamus under the All Writs Act, 28 U.S.C. § 1651(a)
as “necessary or appropriate in aid of” our jurisdiction.
Mississippi Chem. Corp. v. Swift Agr. Chem., 717 F.2d
1374, 1379 (Fed. Cir. 1983). A writ of mandamus may be
employed in exceptional circumstances to correct a “clear
abuse of discretion or ‘usurpation of judicial power’” by
the trial court. Bankers Life & Cas. Co. v. Holland, 346U.S. 379, 382 (1953).

The CAFC noted:

In denying BP’s motion to dismiss, which was based
on Exergen, the district court here did not find relevant
that the complaint failed to allege any facts inferring that
BP was aware of the patent’s expiration. To the contrary,
the district court expressly relied on the relator’s general
allegation that BP knew or should have known that the
patent expired.

This is clearly incorrect. A plaintiff is not empowered
under the Rules “to plead the bare elements of his cause
of action, affix the label ‘general allegation,’ and expect
his complaint to survive a motion to dismiss.” Ashcroft v.
Iqbal, 129 S. Ct. 1937, 1954 (2009). Instead, a complaint
must in the § 292 context provide some objective
indication to reasonably infer that the defendant was
aware that the patent expired. As we explained in
Clontech Labs, Inc. v. Invitrogen Corp., 406 F.3d 1347
(Fed. Cir. 2005):

Intent to deceive, while subjective in nature,
is established in law by objective criteria.
Thus, “objective standards” control and “the
fact of misrepresentation coupled with proof
that the party making it had knowledge of
its falsity is enough to warrant drawing the
inference that there was a fraudulent intent.
406 F.3d at 1352. (citations omitted).


Blogger New said...

False marking patent litigation will likely go away before much more time has passed, especially in the wake of recent rulings. The BP Lubricants decision was one more nail in the coffin. At least maybe this short-lived false marking suit craze may have helped make a (small) dent in the federal deficit.

5:14 PM  

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