Federal Circuit Finds That Cessation Of Sales Of Unmarked Patented Articles Does Not Excuse Noncompliance With The Statutory Notice Requirement
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  • Federal Circuit Finds That Cessation Of Sales Of Unmarked Patented Articles Does Not Excuse Noncompliance With The Statutory Notice Requirement

    On February 19, 2020, the Court of Appeals for the Federal Circuit (CAFC) affirmed the judgment of the United States District Court for the Southern District of Florida concerning the notice requirement for collecting back-damages in cases of patent infringement.  Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., ___ F.3d __ (Fed. Cir. Feb. 19, 2020).  In particular, the CAFC found that the statutory patent marking requirement continues to limit damages after a patentee or licensee ceases sales of unmarked products, and that willful infringement does not establish actual notice under the statute.  35 U.S.C. § 287. 
    35 U.S.C. § 287 provides that “[p]atentees, and persons making, offering for sale, or selling … any patented article for or under them… may give notice to the public that the same is patented … by fixing thereon the word ‘patent.’”  Moreover, “[i]n 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.” 
    In the instant case, the patentee, Arctic Cat, never made or sold a patented article, but its licensee, Honda, did.  Honda did not mark the patent articles as it had no marking obligations under the license agreement.  Honda stopped selling the unmarked products approximately one year before Arctic Cat sued Bombardier for patent infringement. 
    At the district court, Artic Cat posed two arguments to excuse it from the notice requirement.  First, Artic Cat argued that § 287 did not apply after the time that Honda stopped selling unmarked products.  Second, it argued that it is entitled to damages for the full six-year pre-suit damages period because Bombardier’s infringement was willful and that willful infringement is sufficient to demonstrate actual notice.  Bombardier argued that Honda’s products were unmarked patented articles and that Arctic Cat failed to provide notice under § 287, and, as such, Arctic Cat cannot receive pre-complaint damages.  The district court granted summary judgment in favor of Bombardier and Arctic Cat appealed to the Federal Circuit.
    The Federal Circuit affirmed the district court’s finding that the language of the statue is not temporally limited as to the consequence of a failure to mark.  Once a patentee or its licensee begins making or selling a patented article, the notice requirement attaches.  Accordingly, the cessation of sales of unmarked products does not excuse noncompliance with the notice requirement of § 287 such that a patentee may recover damages for the period after sales of the unmarked products ceased but before the filing to a suit for infringement.  The Federal Circuit explained that the policy of § 287 is to encourage marking, not just to discourage the sale of unmarked products. 
    The Federal Circuit also found that a finding of willful infringement is not sufficient to satisfy the notice requirement because the notice requirement under § 287 is directed to the conduct of the patentee, not the knowledge of the infringer.
    CATEGORY: Damages