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IP Alert
IP Alert: Federal Circuit Settles Patent Marking Issue

December 7, 2017

Under the damages statute, 35 U.S.C. § 287, a patentee who makes or sells a patented article must mark the article with the patent number, or else the patentee cannot recover damages from the accused infringer until the patentee actually notifies the infringer of the patent. In some cases, there can be a question as to whether a particular product sold by or under the authority of the patentee is or is not covered by the patent. Today, the Federal Circuit settled a district court split regarding whether it is the patentee or the accused infringer who bears burden of proof on this question. In Arctic Cat Inc. v. Bombardier Recreational Products Inc., the court held that an alleged infringer who challenges the patentee’s compliance with the marking statute bears the initial burden of production to identify unmarked patented articles. Once satisfied, it becomes the patentee’s burden to show the unmarked products do not practice the patents.

Arctic Cat owns two patents on a thrust steering system for personal watercrafts. It licensed these patents solely to Honda, and the license agreement did not require Honda to mark the relevant products with Arctic Cat’s patent numbers. Arctic Cat subsequently learned that Bombardier Recreational Products Inc. (“BRP”) was selling products it believed to infringe these patents and filed suit accordingly.

At trial, the jury found that BRP had willfully infringed the Arctic Cat patents and awarded damages from the first date of infringement. After trial, BRP motioned for judgment as a matter of law that Honda failed to mark its products with the licensed patent numbers. The district court denied the motion, holding that BRP had failed to prove that the identified unmarked products practice the patents. BRP appealed.

On appeal, the Federal Circuit found the district court’s allocation of burden was improper. The court reasoned that the burden on the accused infringer to show which products are not marked with the relevant patent number would be much lower than it would be for the patentee to show that all products are so marked. Conversely, the court reasoned, the patentee has better knowledge of the patents and identified unmarked articles, thereby placing the patentee in a better position to show whether these products practice the patents. Accordingly, the court determined, the accused infringer should bear the initial burden of coming forward with evidence of products that are allegedly unmarked, saying, “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.” The court declined to state the minimum showing required for an accused infringer to meet its initial burden, but indicated that it is a “low bar.” Subsequently, “[o]nce the alleged infringer meets its burden of production,” the court held, “the patentee bears the burden to prove the products identified do not practice the patented invention.”

In this case, the court concluded that BRP had met the “low bar” of identifying allegedly unmarked products sold by Honda. Because the district court had incorrectly placed the burden on BRP to prove the absence of marking, the court vacated the district court’s judgment and remanded the case back to the district court, directing that the patentee Arctic Cat must prove that the subject Honda products do not practice the patents.

Today’s holding is favorable for accused infringers with a potential marking defense because it creates a uniform, low burden for raising the defense. This burden is much lower than it previously was in some district courts. If a marking defense is available, an accused infringer no longer faces the potential hurdle of having to prove that unmarked products practice the asserted patents.

For more information, please contact Fitch Even attorney Andrew C. Wood, author of this alert.
 

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