March 16, 2011
On March 15, 2011, in In re BP Lubricants, Miscellaneous Docket No. 960, the Federal Circuit granted a writ of mandamus directing the U.S. District Court for the Northern District of Illinois to dismiss a complaint, with leave to amend, pursuant to the False Marking Statute, 35 U.S.C. § 292, for failing to satisfy the pleading requirements for fraud in Fed. R. Civ. P. Rule 9(b).
After acknowledging the question presented was one of first impression, the court held “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.” (This holding is consistent with regional circuit court decisions applying Rule 9(b) pleading requirements to claims under the False Claims Act.)
Rule 9(b) requires a plaintiff to plead with “particularity the circumstances constituting fraud or mistake” as “a safety valve to assure only viable claims … are allowed” to prevent complainants from using discovery as a fishing expedition.
The court concluded “permitting a false marking complaint [under 35 U.S.C. § 292] to proceed without meeting the particularity requirement of Rule 9(b) would sanction discovery and adjudication for claims that do little more than speculate that the defendant engaged in more than negligent action.”
This ruling is expected to make it much harder to file false marking complaints, and defendants in pending cases now have additional means for dismissing frivolous complaints.
If you have questions concerning this decision, please contact Fitch Even partner Kendrew Colton, the author of this alert.