Cross-posted at Forbes.com’s “On The Docket”
The bounty hunting lawsuit crusade known as “patent marking litigation” was relatively obscure when Washington Legal Foundation featured a short video on the subject in late June on its Legally Brief website, and then published a short paper on it by three Arnold & Porter attorneys early last month. Now, thanks to an August 31 U.S. Court of Appeals for the Federal Circuit ruling in Stauffer v. Brooks Brothers Inc., the issue has leapt onto the front pages of The Wall Street Journal (subscription-required link here; WSJ Law Blog here) which noted how scores of product manufacturers are rushing to confirm the validity of the patents marked on their packaging.
Mr. Stauffer, a self-described “sharp-dressed man” according to the Journal, who just happens to be a patent lawyer, somehow noticed Brooks Brothers’ bow ties were marked with expired patents. Determined, as he noted to the Journal, to “do a service to the United States” (and of course make some money in the process), Stauffer sued Brooks Brothers under the federal patent law’s “qui tam” or private attorney general provision, putting the venerable clothier at risk of up to $500 in damages for each mismarked bow tie. A federal trial judge dismissed his suit, ruling Stauffer had proven no injury in fact to himself or the U.S. government and thus had no standing to sue under the Constitution’s Article III. Stauffer appealed with the help of the U.S. government, which filed an amicus brief on his side.
The Federal Circuit has now reversed, reasoning that by the simple act of creating a qui tam provision empowering “relators” like Mr. Stauffer to sue, Congress defined the injury to the federal government, which in turn confers standing to relators. An amicus brief filed by CIBA Vision Corporation argued that Congress cannot delegate Article II, Section 3’s power that the Executive Branch “take Care that the Laws be faithfully executed” to private citizens without retaining ultimate control over the litigation. The court acknowledged that CIBA “raises relevant points,” but since the federal trial court did not decide, nor did the parties appeal, the constitutionality of the controlling federal law, the Federal Circuit panel declined to address the issue. No doubt it will only be a matter of time before a target of a patent marking suit raises the constitutional issue.
Considering the significant opportunities for mischief these qui tam patent marking suits provide, as well as the considerable costs they could impose on businesses unfortunate enough to be snared as defendants, that time can’t come soon enough.