Reason 1: Marking your patented products is necessary to recoup damages from infringement
The primary purpose of a patent is to prevent infringement of your company’s intellectual property and to recover damages from your competitors when they infringe your patented technology. But if you fail to mark your patent numbers on your products, there is a rigid rule that will prevent you from recovering any money for the infringement of your patent before the infringer is given notice -- usually when a lawsuit is filed.
Depending on how long the infringement has been happening, not marking your patented products could mean forgoing significant amounts of money and letting your competitors keep the profits from using your technology. Getting full value out of your investment in patents requires taking some simple measures to mark your products. And as explained below, recent changes in the law have made complying with the statute easier than before.
Reason 2: Patent marking has never been easier
Before 2013, the only way to comply with the patent marking statute was to put each particular patent number on each patented product. This was cumbersome for many reasons. First, some products include technology protected by many different patents, and it can be hard for companies -- particularly companies that have many product lines and lots of patents -- to keep track of the matchup.
Second, finding space for a lengthy list of patents can be tricky, especially for products with limited space to begin with or where aesthetics are important. Just imagine if your smartphone had thousands of patent numbers printed on the back. Third, products often start selling before patents issue, or continue selling after patents expire. Updating the markings on products each time a patent issues or expires can be burdensome and costly, sometimes prohibitively so.
Recognizing the difficulties with physical patent marking, Congress updated the law to permit what’s called virtual marking, which is Congress’s way of saying you can use a website to list the patent numbers and put the URL of the website on the product instead a list of specific patent numbers. Updating a website is much easier than updating product markings, and in many ways, it is more convenient for the public, too.
The requirements for virtual marking are simple:
Make sure to keep records of when the website was updated with new patent numbers -- if you sue for patent infringement, it will be up to you to prove that you complied with the marking requirements. How this will play out in the courtroom is still undetermined, but a recommendable practice will be to keep track of all the changes you make to your patent website and when you made those changes.
Reason 3: The downside risk of false marking has been greatly diminished
Now that you know the benefits and procedure for marking your patented products, it is time to discuss the risk of false marking. Patent law prohibits falsely marking products as if they were patented when they are not. In the past, this exposed patent owners to significant liability for mistakes. For instance, a patent owner who continued to mark a product with a patent number after that patent expired could face exposure of up to $500 per mismarked unit -- with the total adding up fast for mass-produced products.
Another type of mistake that might be made is if the patent owner wrongly concludes that a particular patent covers a particular product, when it does not actually do so, and the same liability could flow to the patent owner from an incorrect marking in that situation. Adding insult to injury, anybody could bring a claim for false marking, even someone who suffered no harm from the mistake. One reason many companies elected not to mark their patented products was to avoid such exposure, even though the lack of marking also meant that the company would not have access to the full amount of damages that would otherwise be available due to the infringement of their patents.
Fortunately, Congress and the courts recently stepped in and updated the law on false marking. Several changes have taken the sting out of false marking. The first change is to remove liability for leaving the number of an expired patent on a product. The second change, which can be very significant, is to only apply one fee up to $500 "per false marking," rather than on a "per-article" basis.
The third and perhaps most important change is to limit who can bring a false marking claim: only the competitors who are harmed by the false marking or the government can now bring such a claim. And competitors can only recover for the damages they’ve suffered as a result of the false marking, which are not likely to be large, but will be difficult to prove. Needless to say, these changes mean that false marking claims are rare, and rarely successful. This makes sense in the modern world, where parties on notice that a product is patented are unlikely to be scared off by the marking alone, without analysis of what features that the patents in question actually cover and how the claims of those patents might read on the competitor products.
With little downside risk from marking your products, and easier procedures to do so, implementing a procedure to ensure that all your products are properly marked will allow you to capture the full value of your patents at little cost.
Amanda Tessar is a partner at Perkins Coie. Contact her here. Jonathan Allred contributed to this story.