A path forward for hemp cultivation and production collaterally potentially imposes additional requirements of state, territory, or tribal governance impacting the registrability of cannabis and cannabis-related trademarks under federal law
Marks for cannabis and cannabis-related goods and services are potentially registrable under the U.S. Trademark Act, if the use of such marks in commerce is lawful under federal law. Recent changes in federal laws have put into place a definition for “hemp” and “hemp” as so defined is no longer considered to be a controlled substance under the Controlled Substances Act (“CSA”).
So does this mean that the path is now clear to seek federal protection under the U.S. Trademark Act for your cannabis and cannabis-related business’ brilliant branding (trademarks, stylized designs, logos, etc.)? Yes, in some circumstances; however, use of the mark and the goods/services with which it is associated must comply with all applicable federal laws in order for there to be a valid basis for registration of marks under federal law. In this regard, Food and Drug Administration (FDA) requirements and those of the 2018 Farm Bill (discussed below) are baked into the pursuit of this tasty IP confection. A confluence of federal and local laws (state, territory, or tribal governance) impacting the registrability of marks for cannabis and cannabis-related goods and services under federal law would appear to be the eventual result in some locations.
As summarized by the FDA: “Cannabis is a plant of the Cannabaceae family and contains more than eighty biologically active chemical compounds. The most commonly known compounds are delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD). Parts of the Cannabis sativa plant have been controlled under the Controlled Substances Act (CSA) since 1970 under the drug class "Marihuana" (commonly referred to as "marijuana") [21 U.S.C. 802(16)].” FDA Regulation of Cannabis and Cannabis- Derived Products: Questions and Answers, https://www.fda.gov/newsevents/publichealthfocus/ucm421168.htm#whatare.
The Agriculture Improvement Act of 2018, Pub. L. 115-334, (the 2018 Farm Bill) was signed into law on Dec. 20, 2018. The new law amended Section 297A of the Agricultural Marketing Act (AMA) such that “hemp” would be defined to mean “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol [THC] concentration of not more than 0.3 percent on a dry weight basis” and modified the definition of “marihuana” within the Controlled Substances Act (“CSA”) to exclude “hemp, as defined in section 297A of the Agricultural Marketing Act of 1946”, which means that cannabis plants and derivatives such as CBD that contain no more than 0.3% THC on a dry-weight basis are no longer controlled substances under the CSA. The 2018 Farm Bill also amended Schedule I of the CSA to exclude “tetrahydrocannabinols in hemp”.
On May 2, 2019, the United States Patent and Trademark Office (USPTO) issued Examination Guide 1-19, Examination of Marks for Cannabis and Cannabis-Related Goods and Services after Enactment of the 2018 Farm Bill, https://www.uspto.gov/sites/default/files/documents/Exam%20Guide%201-19.pdf, “to clarify the procedure for examining marks for cannabis and cannabis-derived goods and for services involving cannabis and cannabis production following the 2018 Farm Bill.” Examination Guide 1-19, p. 1.
Section 297D(c) of the 2018 Farm Bill explicitly preserves the FDA’s authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food Drug and Cosmetic Act (FDCA) or the Public Health Service Act. As summarized by the FDA: “Under the FDCA, any product intended to have a therapeutic or medical use, and any product (other than a food) that is intended to affect the structure or function of the body of humans or animals, is a drug. Drugs must generally either receive premarket approval by FDA through the New Drug Application (NDA) process or conform to a "monograph" for a particular drug category, as established by FDA's Over-the-Counter (OTC) Drug Review. CBD was not an ingredient considered under the OTC drug review. An unapproved new drug cannot be distributed or sold in interstate commerce.” FDA Regulation of Cannabis and Cannabis- Derived Products: Questions and Answers, https://www.fda.gov/newsevents/publichealthfocus/ucm421168.htm#whatare. Moreover, the FDA has concluded that it is a prohibited act to introduce or deliver for introduction into interstate commerce any food (including any animal food or feed) to which THC or CBD has been added. Id. “FDA treats products containing cannabis or cannabis-derived compounds as it does any other FDA-regulated products — meaning they’re subject to the same authorities and requirements as FDA-regulated products containing any other substance. This is true regardless of whether the cannabis or cannabis-derived compounds are classified as hemp under the 2018 Farm Bill.” Id. Thus, lawful-use issues (impacting the registrability of marks) can arise under the FDCA.
Although it is unlawful under the FDCA to introduce food containing added CBD or THC (or any added substances that are active ingredients in any drug) into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived, there are pathways for lawful marketing that “include ways for companies to seek approval from the FDA to market with therapeutic claims a human or animal drug that is derived from cannabis. For example, in June 2018, the FDA approved a drug, Epidiolex (/news-events/press-announcements/fda- approves-first-drug-comprised-active-ingredient-derived-marijuana-treat-rare-severe- forms), that contains cannabis-derived CBD for the treatment of seizures associated with two rare and severe forms of epilepsy. That approval was based on adequate and well-controlled clinical studies, which gives prescribers confidence in the drug’s uniform strength and consistent delivery that support appropriate dosing needed for treating patients with these complex and serious epilepsy syndromes.” Statement of former FDA Commissioner Scott Gottlieb, M.D., on signing of the Agriculture Improvement Act and the agency’s regulation of products containing cannabis and cannabis-derived compounds. https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm628988.htm.
The FDA has noted that some foods are derived from parts of the hemp plant that may not contain CBD or THC, meaning that their addition to foods might not raise the same issues as the addition of drug ingredients like CBD and THC. In this regard, the FDA has recently completed its evaluation of three Generally Recognized as Safe (/food/cfsan-constituent- updates/fda-responds-three-gras-notices-hemp-seed-derived-ingredients-use-human-food) (GRAS) notices related to hulled hemp seeds, hemp seed protein and hemp seed oil and had no questions regarding the company’s conclusion that the use of such products as described in the notices is safe. “Therefore, these products can be legally marketed in human foods for these uses without food additive approval, provided they comply with all other requirements and do not make disease treatment claims.” Id. See also, Agency Response Letter GRAS Notice No. GRN 000765; Agency Response Letter GRAS Notice No. GRN 000771; Agency Response Letter GRAS Notice No. GRN 000778.
“The GRAS notices are for three different hemp seed-derived ingredients. The GRAS conclusions can apply to ingredients from other companies, if they are manufactured in a way that is consistent with the notices and they meet the listed specifications. Some of the intended uses [as set forth in these notices] for these ingredients include adding them as source of protein, carbohydrates, oil, and other nutrients to beverages (juices, smoothies, protein drinks, plant-based alternatives to dairy products), soups, dips, spreads, sauces, dressings, plant-based alternatives to meat products, desserts, baked goods, cereals, snacks and nutrition bars. Products that contain any of these hemp seed-derived ingredients must declare them by name on the ingredient list.” FDA Responds to Three GRAS Notices for Hemp Seed-Derived Ingredients for Use in Human Food: Constituent Update, December 20, 2018,
In respect to examination of marks for cannabis and cannabis-derived goods, the USPTO examination guide states: “If an applicant’s goods are derived from “hemp” as defined in the 2018 Farm Bill, the identification of goods must specify that they contain less than 0.3% THC. Thus, the scope of the resulting registration will be limited to goods compliant with federal law.” Examination Guide 1-19, p. 2.
In respect to examination of marks for services involving cannabis and cannabis production, the USPTO examination guide states: “When applications recite services involving cannabis-related activities, they will be examined for compliance with the CSA and the 2018 Farm Bill. As discussed above, the CSA prohibits, among other things, manufacturing, distributing, dispensing, or possessing cannabis that meets the definition of marijuana. Therefore, the USPTO will continue to refuse registration when the identified services in an application involve cannabis that meets the definition of marijuana and encompass activities prohibited under the CSA because such services still violate federal law, regardless of the application filing date. If the identified services involve cannabis that is “hemp” (i.e., contains less than 0.3% THC), the applications will also be examined for compliance with the requirements of the 2018 Farm Bill.” Examination Guide 1-19, p. 3.
Further as to the requirements of the 2018 Farm Bill, cultivators/producers of hemp seeking federal registrations of marks may also need to demonstrate (provide evidence or statements) that they have satisfied state, territory, or tribal licensing/authorization requirements and forthcoming USDA regulations and hemp-production plans as applicable. “For applications that recite services involving the cultivation or production of cannabis that is “hemp” within the meaning of the 2018 Farm Bill, the examining attorney will also issue inquiries concerning the applicant’s authorization to produce hemp. Applicants will be required to provide additional statements for the record to confirm that their activities meet the requirements of the 2018 Farm Bill with respect to the production of hemp. The 2018 Farm Bill requires hemp to be produced under license or authorization by a state, territory, or tribal government in accordance with a plan approved by the U.S. Department of Agriculture (USDA) for the commercial production of hemp. To date, the USDA has not promulgated regulations, created its own hemp-production plan, or approved any state or tribal hemp-production plans.” Examination Guide 1-19, p. 3.
In relation to regulation/governance of hemp cultivation and production under the new law, in his excellent article, John Hudak wrote that “[u]nder section 10113 of the Farm Bill, state departments of agriculture must consult with the state’s governor and chief law enforcement officer to devise a plan that must be submitted to the Secretary of USDA. A state’s plan to license and regulate hemp can only commence once the Secretary of USDA approves that state’s plan. In states opting not to devise a hemp regulatory program, USDA will construct a regulatory program under which hemp cultivators in those states must apply for licenses and comply with a federally-run program. This system of shared regulatory programming is similar to options states had in other policy areas such as health insurance marketplaces under ACA, or workplace safety plans under OSHA—both of which had federally-run systems for states opting not to set up their own systems.” The Farm Bill, hemp legalization and the status of CBD: An explainer, December 14, 2018,
As discussed in the USPTO’s Trademark Manual of Examining Procedure (TMEP) §907: Use of a mark in commerce must be lawful use to be the basis for federal registration of the mark. Gray v. Daffy Dan’s Bargaintown, 823 F.2d 522, 526, 3 USPQ2d 1306, 1308 (Fed. Cir. 1987); see 15 U.S.C. §§1051, 1127; 37 C.F.R. §2.69; In re Midwest Tennis & Track Co., 29 USPQ2d 1386, 1386 n.2 (TTAB 1993) ; In re Stellar Int’l, Inc., 159 USPQ 48, 50-51 (TTAB 1968). Thus, the goods or services to which the mark is applied, and the mark itself, must comply with all applicable federal laws. See In re Pepcom Indus., Inc., 192 USPQ 400, 401 (TTAB 1976) (“In order for [an] application to have a valid basis that could properly result in a registration, the use of the mark [has] to be lawful, i.e., the sale or shipment of the product under the mark [has] to comply with all applicable laws and regulations. If this test is not met, the use of the mark fails to create any rights that can be recognized by a Federal registration.”). In addition, “the fact that the provision of a product or service may be lawful within a state is irrelevant to the question of federal registration when it is unlawful under federal law.” In re Brown, 119 USPQ2d 1350, 1351 (TTAB 2016).
While the 2018 Farm Bill is federal law, satisfying the requirements of the 2018 Farm Bill with respect to the production of hemp will likely in many states require that applicants for federal registration of marks satisfy licensing/authorization requirements imposed by a state, territory, or tribal government in accordance with a plan approved by the USDA -- potentially creating incentives for those involved with cannabis and cannabis-related goods and/or services who are interested in protecting their trademark intellectual property to operate their businesses at locations where satisfying the requirements of the 2018 Farm Bill are least burdensome or in some way more readily or advantageously accomplishable.
The content of this article is not, shall not under any circumstance be considered, and is not intended to be nor should be relied on as, legal advice. The content on this article is informational only. If you require legal assistance, seek out the advice of an attorney.
Author: Peter L. Holmes - solo practitioner
Patent/IP Attorney, B.S.E.E. (Los Angeles)
Under the Patent Laws, pursuant to 35 U.S.C. § 287(a) (the patent marking statute), a patentee who makes or sells a patented article must mark his articles or notify infringers of his patent in order to recover damages.
In Arctic Cat Inc. v. Bombardier Recreational Products, Inc., _________ (Fed. Cir. 2017) [Fed. Cir. Case 2017-1475 (12/7/2017)], the United States Court of Appeals for the Federal Circuit (hereafter “CAFC”) recently addressed the issue of which side (patent owner or alleged infringer) bears the burden of proof as to whether any of the unmarked personal watercraft (“PWC”) sold by Arctic Cat’s licensee Honda were covered by the patent claims at issue.
As discussed by the CAFC in Arctic Cat:
There is a split among the district courts regarding which party must initially identify the products which it believes the patentee failed to mark. Some courts require the alleged infringer to initially identify products it believes practice the asserted patents. See, e.g., Fortinet, Inc. v. Sophos, Inc., No. 13-CV-05831-EMC, 2015 WL 5971585, at *4–5 (N.D. Cal. Oct. 14, 2015). These courts reason that “[a]bsent guidance from the other side as to which specific products are alleged to have been sold in contravention of the marking requirement, a patentee. . . is left to guess exactly what it must prove up to establish compliance with the marking statute.” [CITATIONS omitted.] …
Other courts have required the patentee prove that none of its unmarked goods practice the asserted claims. See, e.g., Adrea, LLC v. Barnes & Noble, Inc., No. 13-CV-4137 JSR, 2015 WL 4610465, at *1–2 (S.D.N.Y. July 24, 2015). Courts adopting this approach reason the patentee is in a better position to know whether his goods practice the patents-in-suit. [CITATIONS omitted.] …
We hold an alleged infringer who challenges the patentee’s compliance with § 287 bears an initial burden of production to articulate the products it believes are unmarked “patented articles” subject to § 287. To be clear, this is a low bar. The alleged infringer need only put the patentee on notice that he or his authorized licensees sold specific unmarked products which the alleged infringer believes practice the patent. The alleged infringer’s burden is a burden of production, not one of persuasion or proof. … Permitting infringers to allege failure to mark without identifying any products could lead to a large scale fishing expedition and gamesmanship. Once the alleged infringer meets its burden of production, however, the patentee bears the burden to prove the products identified do not practice the patented invention.
Id., slip op. pages 22-24.
The CAFC concluded that the alleged infringer had met its initial burden of production (as to initially identifying the products which it believes the patentee failed to mark) and that the patentee must now prove that these identified products do not fall within the patent claims in order to recover damages under the constructive notice provisions of § 287. Id., slip op. page 25.
In Arctic Cat, the CAFC remanded the case to the district court for further consideration on the issue of marking, putting the patentee in a circumstance of having to prove that the identified unmarked accused products do not fall within the patent claims in order to recover pre-actual notice damages under the constructive notice provisions of § 287. Id. As stated by the district court,
Because Arctic Cat stopped manufacturing and selling PWCs before any asserted patent issued, the only point of noncompliance with the statue could arise from sales made by Honda, as its sole licensee. But Honda’s sales are inconsequential unless the Honda PWCs are “patented articles” within the scope of the claims of the ‘545 and ‘969 patents. Section 287(a) applies to products sold by licensees. Amsted, 24 F.3d at 185; Maxwell, 86 F.3d at 1111. When the failure to mark a patented product is caused by someone other than the patentee, such as a licensee, courts may consider whether the patentee “made reasonable efforts to ensure compliance with the marking requirements.” Maxwell, 86 F.3d at 1111-12.
Artic Cat, Inc. v. Bombardier Recreational Products, Inc., and BRP U.S. Inc. [United States District Court, Southern District of Florida, Case No. 14-cv-62369-BLOOM/Valle] (ORDER ON MOTIONS TO STRIKE AND SUMMARY JUDGMENT, p. 58.)
In its pursuit of damages for pre-complaint sales by its licensee Honda (of unmarked products accused of infringement), Arctic Cat has padded into quite a conundrum.
Additional information regarding patent marking and false marking is provided below -- purely for educational purposes, not legal advice.
Patent Marking and False Marking
35 U.S.C. 287 Limitation on damages and other remedies; marking and notice.
35 U.S.C. § 287(a), the patent marking statute, reads as follows:
(a) Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word “patent” or the abbreviation “pat.”, together with the number of the patent, or by fixing thereon the word “patent” or the abbreviation “pat.” together with an address of a posting on the Internet, accessible to the public without charge for accessing the address, that associates the patented article with the number of the patent, or when, from the character of the article, this cannot be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.
The patent marking statute (35 U.S.C. § 287(a)) provides a mechanism for “patentees, …” (the parties to which 35 U.S.C. § 287(a) applies) to inform the public that an article is patented through the placement, or marking, of certain information about associated patents on the article or its packaging. The marking statute serves three related purposes: (1) helping to avoid innocent infringement; (2) encouraging patentees to give public notice that the article is patented; and (3) aiding the public to identify whether an article is patented. Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1443 (Fed. Cir. 1998) (internal citations omitted).
A patentee’s licensees must also comply with § 287, because the statute extends to “persons making or selling any patented article for or under [the patentee].” [Motorola, Inc. v. United States, 729 F.2d 765, 770 (Fed. Cir. 1984)] (quoting § 287(a)).
Arctic Cat Inc. v. Bombardier Recreational Products, Inc., _________ (Fed. Cir. 2017) [Fed. Cir. Case 2017-1475 (12/7/2017), slip op. page 20].
… Marking under the statute is permissive, not mandatory. While permissive, there is a consequence if the patent owner chooses not to mark: “In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice.” [CITATIONS omitted.]
… The marking statute protects the public’s ability to exploit an unmarked product’s features without liability for damages until a patentee provides either constructive notice through marking or actual notice. [CITATIONS omitted.] …
Rembrandt Wireless Technologies, LP v. Samsung Electronics Co., LTD., _________ (Fed. Cir. 2017) [Fed. Cir. Case 2016-1729 (4/17/2017), slip op. page __].
Under the marking statute, an article can be marked by fixing onto it the word “patent” or the abbreviation “pat.,” together with the number of the patent (i.e., by physically applying the patent number to the article -- physical marking) or by affixing “patent” or “pat.” on the article along with an address of a posting on the Internet that associates the patented article with the number of the patent (i.e., referencing the patent number through an Internet site -- virtual marking). U.S. Pᴀᴛ. ᴀɴᴅ Tʀᴀᴅᴇᴍᴀʀᴋ Oғғ., Rᴇᴘᴏʀᴛ ᴏɴ Vɪʀᴛᴜᴀʟ Mᴀʀᴋɪɴɢ 12 (2014), page 5. “For either marking method, the statute also provides that if the character of the article prevents the patentee from placing the required information on the article itself, the patentee may instead mark the article by fixing to it or to its packaging a label containing the information.” Id.
The requirements of virtual marking in relation to a product are met “by fixing thereon the word ‘patent’ or the abbreviation ‘pat’ together with an address of a posting on the Internet, accessible to the public without charge for accessing the address, that associates the patented article with the number of the patent, …”. 35 U.S.C. § 287(a). For example, a patentee can satisfy the virtual marking requirements by marking the product with a URL, and maintaining a web page at that URL that identifies the patented product and provides an associated list of patent numbers relating to the patented product.
With virtual marking, changes to the list of associated patent numbers (e.g., when an additional patent issues after the product is already on the market) may be effected more easily and potentially at much lower cost by modifying the relevant web page rather than the product or associated labels or packaging.
“[A] delay between issuance of the patent and compliance with the marking provisions of section 287(a) will not prevent recovery of damages after the date that marking has begun.” American Med. Sys., Inc. v. Med. Eng’g Corp., 6 F.3d 1523, 1537 (Fed. Cir. 1993).
“[O]nce marking has begun, it must be substantially consistent and continuous in order for the party to avail itself of the constructive notice provisions of the statute.” Id. In AMS, the court held that full compliance with the marking statute was not achieved until the patentee “consistently marked substantially all of its patented products and it was no longer distributing unmarked products.” AMS, 6 F.3d at 1537, 1538. In Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1446 (Fed. Cir. 1998), the court held that to satisfy the constructive notice provision of the marking statute the patentee must have shown that substantially all of the products being distributed were marked, and that once marking was begun, the marking was substantially consistent and continuous.
… the issue of willfulness turns on the actual knowledge of the infringer, and is unrelated to the adequacy of constructive notice by the patentee. In determining whether the patentee marked its products sufficiently to comply with the constructive notice requirement, the focus is not on what the infringer actually knew, but on whether the patentee’s actions were sufficient, in the circumstances, to provide notice in rem. See Amsted Industries v. Buckeye Steel Castings, 24 F.3d 178, 187, 30 USPQ2d 1462, 1469 (Fed. Cir. 1994) (“The correct approach to determining notice under section 287 must focus on the action of the patentee, not the knowledge or understanding of the infringer.”); American Medical Systems v. Medical Eng’g Corp., 6 F.3d 1523, 1537, 28 USPQ2d 1321, 1331 (Fed. Cir. 1993) (it is not the number of articles seen by the defendant that controls the issue of marking, but whether the patentee performed his or her statutory duty).
Nike, 138 F.3d at 1446.
As virtual marking is relatively new (and has only been included in the statute as a form of marking since 2011), it is unknown at present how or in what ways the “substantially consistent and continuous” requirement would be applied to virtual marking. “For instance, … technical issues may interrupt Internet service or virtual marking Web page availability, or make the Web page inoperable for periods of time. [Citation omitted.] Prolonged unavailability of a virtual marking Web page or infrequent updates to patent status may raise issues concerning the continuity of the constructive notice.” U.S. Pᴀᴛ. ᴀɴᴅ Tʀᴀᴅᴇᴍᴀʀᴋ Oғғ., Rᴇᴘᴏʀᴛ ᴏɴ Vɪʀᴛᴜᴀʟ Mᴀʀᴋɪɴɢ 12 (2014), page 20.
Section 287 is a limitation on damages, not an affirmative defense (to patent infringement). Arctic Cat, slip op. page 20. “[A]n alleged infringer who challenges the patentee’s compliance with § 287 bears an initial burden of production to articulate the products it believes are unmarked ‘patented articles’ subject to § 287. To be clear, this is a low bar. The alleged infringer need only put the patentee on notice that he or his authorized licensees sold specific unmarked products which the alleged infringer believes practice the patent. The alleged infringer’s burden is a burden of production, not one of persuasion or proof.” Id., slip op. page 23.
35 U.S.C. 292 False marking.
35 U.S.C. § 292, the false marking statute, reads as follows:
Whoever, without the consent of the patentee, marks upon, or affixes to, or uses in advertising in connection with anything made, used, offered for sale, or sold by such person within the United States, or imported by the person into the United States, the name or any imitation of the name of the patentee, the patent number, or the words “patent,” “patentee,” or the like, with the intent of counterfeiting or imitating the mark of the patentee, or of deceiving the public and inducing them to believe that the thing was made, offered for sale, sold, or imported into the United States by or with the consent of the patentee; or
Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article the word “patent” or any word or number importing the same is patented, for the purpose of deceiving the public; or
Whoever marks upon, or affixes to, or uses in advertising in connection with any article the words “patent applied for,” “patent pending,” or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public--
Shall be fined not more than $500 for every such offense. Only the United States may sue for the penalty authorized by this subsection.
(b) A person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury.
(c) The marking of a product, in a manner described in subsection (a), with matter relating to a patent that covered that product but has expired is not a violation of this section.
The false marking statute (35 U.S.C. § 292(a)) prohibits: placing a patent number on a product with the intent of counterfeiting or imitating the mark of the patentee; or using the words “patent,” “patentee,” or the like in advertising with the intent of deceiving the public and inducing them to believe that a product was made, offered for sale, sold, or imported into the United States by or with the consent of the patentee. Additionally, the false marking statute (35 U.S.C. § 292(a)) prohibits:
Under the false marking statute, only the United States may sue for the penalty, the $500-per-article fine, authorized by Section 292(a). 35 U.S.C. § 292(a); Sukumar v. Nautilus, Inc., 785 F.3d 1396, ___ (Fed. Cir. 2015).
However, Section 292(b) of the false marking statutes provides a private right of action to enforce § 292(a) to any “person who has suffered a competitive injury as a result of a violation of this section.” 35 U.S.C. § 292(b). “[A] potential competitor may suffer competitive injury if it has attempted to enter the market. An attempt is made up of two components: (1) intent to enter the market with a reasonable possibility of success, and (2) an action to enter the market.” Sukumar v. Nautilus, Inc., 785 F.3d 1396, ___ (Fed. Cir. 2015).
Satisfaction of this competitive injury requirement, however, does not mean that a party necessarily has standing under § 292(b). The statute also imposes a causation requirement. Standing under § 292(b) is limited to those who have suffered a competitive injury “as a result of a violation of [section 292(a)].” 35 U.S.C. § 292(b).
Id., fn. 3.
The marking of a product, in a manner described in [35 U.S.C. § 292(a)], with matter relating to a patent that covered that product but has expired is not a violation of [the false marking statute]. 35 U.S.C. § 292(c).
To avoid claims of false marking under 35 U.S.C. § 292, a patentee should adhere to the following marking rules or best practices:
35 U.S.C. § 154(d) Provisional Rights [Damages from Pre-Grant Publication]
35 U.S.C. § 154(d), the provisional rights statute (which provides in some limited circumstances a right to a reasonable royalty when an infringer had actual notice of a published application), reads as follows:
(d) PROVISIONAL RIGHTS.--
(1) IN GENERAL.— In addition to other rights provided by this section, a patent shall include the right to obtain a reasonable royalty from any person who, during the period beginning on the date of publication of the application for such patent under section 122(b), or in the case of an international application filed under the treaty defined in section 351(a)designating the United States under Article 21(2)(a) of such treaty, or an international design application filed under the treaty defined in section 381(a)(1) designating the United States under Article 5 of such treaty, the date of publication of the application, and ending on the date the patent is issued--
(A) (i) makes, uses, offers for sale, or sells in the United States the invention as claimed in the published patent application or imports such an invention into the United States; or
(ii) if the invention as claimed in the published patent application is a process, uses, offers for sale, or sells in the United States or imports into the United States products made by that process as claimed in the published patent application; and
(B) had actual notice of the published patent application and, in a case in which the right arising under this paragraph is based upon an international application designating the United States that is published in a language other than English, had a translation of the international application into the English language.
(2) RIGHT BASED ON SUBSTANTIALLY IDENTICAL INVENTIONS.— The right under paragraph (1) to obtain a reasonable royalty shall not be available under this subsection unless the invention as claimed in the patent is substantially identical to the invention as claimed in the published patent application.
(3) TIME LIMITATION ON OBTAINING A REASONABLE ROYALTY.— The right under paragraph (1) to obtain a reasonable royalty shall be available only in an action brought not later than 6 years after the patent is issued. The right under paragraph (1) to obtain a reasonable royalty shall not be affected by the duration of the period described in paragraph (1).
In some limited circumstances (patent issues with claims substantially identical to those in published patent application), a “reasonable royalty” can be sought under 35 U.S.C. § 154(d) (“Provisional Rights”) for making, using, offering to sell, or selling the invention as claimed in the published patent application between the period beginning on the date of publication of the application and ending on the date the patent is issued.
This right to a reasonable royalty is further limited by the requirement (of 35 U.S.C. § 154(d)) that the infringer had actual notice of the published application. In this regard, marking a product “patent pending” or “patent applied for” with the application publication number may provide evidence of the infringer’s actual notice.
The right to obtain a reasonable royalty under 35 U.S.C. § 154(d) is available only in an action brought not later than 6 years after the patent is issued.
Peter L. Holmes (Patent/IP Attorney)
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