Judge Feinerman granted defendant BP Lubricants’ Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff Simonian’s false patent marking case with prejudice. After the Federal Circuit held Simonian’s intent allegations lacking, Simonian amended its Complaint. The Court held that the amended complaint did not meet Rule 9(b) pleading standards for the following reasons:
Simonian’s allegation that a license agreement proved BP Lubricant’s knowledge of the patent’s expiration failed because the Agreement did not reference the patent’s expiration date.
General allegations that BP Lubricants understand that patents expire did not create intent. Allegations that BP Lubricants briefly litigated the patent may have been sufficient.
The fact that the term of the patent was printed on its face was also not sufficient to show intent. Allowing this allegation to create intent would render the BP Lubricants decision a “dead letter.”
While BP Lubricants allegedly revised its front labels three times after the patent’s expiration, BP Lubricants did not revise the back label containing the marking. Because the marking was never revised, the label revisions were irrelevant.
Finally, because Simonian was fully aware of the BP Lubricants decision when he prepared his amended complaint, and because he did not seek leave to replead the dismissal was made with prejudice.

Continue Reading Revised Label Does Not Create False Marking Intent

Simonian v. Mead Westvaco Corp., No. 10 C 1217 Slip. Op. (N.D. Ill. Sep. 1, 2011) (Castillo, J.).
Judge Castillo granted defendant Mead Westvaco’s motion to dismiss plaintiff Simonian’s false patent marking suit claiming that Mead Westvaco marked envelopes with expired patents. Simonian’s general allegation of intent did not meet the Fed. R. Civ. P. 9 (b) heightened pleading standards. In fact, they mirrored the allegations held insufficient in BP Lubricant. And Simonian did not:
· Identify specific Mead Westvaco individuals with knowledge of the alleged false marking;
· Allege that Mead Westvaco sued a third party asserting the patents after they expired; or
· Allege that Mead Westvaco made multiple revisions to the packaging on the markings after the patents expired.

Continue Reading False Marking Requires More than General Intent Allegations

Hollander v. Hospira, No. 10 C 8151, Slip Op. (N.D. Ill. May 12, 2011) (Kendall, J.)
Judge Kendall granted defendant Hospira’s motion to dismiss plaintiff Hollander’s false patent marking claims for failure to sufficiently plead intent. But the Court gave Hollander 30 days to replead because its complaint was filed before the BP Lubricants decision on intent pleading was entered. The following items were of particular note:
The fact that some of Hospira’s patents expired for failure to pay maintenance fees was not sufficient.
The fact that one patent was held unenforceable was not sufficient to show intent.
Hospira’s 10-K statements regarding its attention to third party patents were not relevant to Hospira’s knowledge of its own patents.
Packaging inserts inside a consumer package were not relevant because a consumer could not see them before purchasing the product, and therefore, could not be swayed its decisions based upon allegedly false marking.

Continue Reading Marking With An Unenforceable Patent Does Not Create Intent to Deceive

Luka v. The Proctor & Gamble Co., No. 10 C 2511 (N.D. Ill. Mar. 28, 2011) (Kennelly, J.).
Judge Kennelly granted certain defendants’ motions to dismiss plaintiff’s false patent marking case for failure to sufficiently plead intent, and held that the statute was constitutional. Note that this case was decided before President Obama signed the America Invents Act which removes expired patents from the false marking statute.
Proctor & Gamble
Plaintiff’s general allegations against defendant Procter & Gamble were insufficient, particularly in light of the license agreement requiring defendant Innovative to comply with the marking statute.
Innovative
Plaintiff sufficiently pled intent as to Innovative by attacking the P&G-Innovative license agreement. In that agreement, Innovative accepts the responsibility of complying with the marking statute.
Helen of Troy & Idelle
Plaintiff’s claims as to Helen of Troy and Idelle failed because they were the sort of generalized pleadings that BP Lubricants held insufficient.
Constitutionality
The Court held that § 292, the false marking statue was constitutional:
For these reasons, the Court agrees with the district court in the Pequignot case that “[a]though these mechanisms concededly do not rise to the same level of government control provided by the FCA, the FCA’s strict safeguards are not required because . . . § 292(b) represents a minimal intrusion onto Executive Branch power.” Peguignot v. Solo Cup Co., 640 F. Supp. 2d 714, 728 (E.D. Va. 2009), vacated in part on other grounds, 608 F.3d 1356 (Fed. Cir. 2010).

Continue Reading False Patent Marking Statute is Constitutional

Heathcote Holdings Corp., Inc. v. Maybelline LLC, No. 10 C 2544, Slip Op. (N.D. Ill. Mar. 15, 2011) (Pallmeyer, J.).
Judge Pallmeyer granted in part defendants’ (collectively “Maybelline”) motion to dismiss plaintiff Heathcote’s false patent marking case. The Court also granted Maybelline’s motion to transfer the case to the Southern District of New York. In this pre-BP Lubricants case, the Court held that Heathcote had sufficiently pled intent to deceive by pleading the allegedly false statement and Maybelline’s knowledge of the false statement. These are the type of allegations specifically held to be in sufficient by BP Lubricants.
Heathcote did not oppose Maybelline’s motion to dismiss L’Oreal USA Creative, so long as it was given leave to replead if it later found Maybelline’s representations were wrong.
Finally, the Court transferred the case to Maybelline’s home district, the Southern District of New York. One key factor was that the alleged conduct would have largely occurred at Maybelline’s headquarters, in New York. The Court also held that the sources of proof in the case will be more accessible in New York than in Illinois.

Continue Reading Pre-BP Lubricant Case Allows General Pleading for Intent to Deceive

Newt LLC v. Nestle USA, Inc., No. 09 C 4792, Slip Op. (N.D. Ill. Mar. 28, 2011) (Coleman, J.)
Judge Coleman denied defendants’ Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, but dismissed the false patent marking case pursuant to Rule 12(b)(6) for failure to sufficiently plead intent to deceive. The Court held that plaintiff Newt had standing to sue without proof of particularized injury, citing Stauffer v. Brooks Bros., Inc., 619 F. 3d 1321, 1327 (Fed. Cir. 2010).
Newt alleged that defendant Graphic Packaging (“GPI”) falsely marked the products and sold them to the customer defendants. GPI made no allegations that the customer defendants marked the accused products. The customer defendants were, therefore, dismissed.
Further, all defendants were dismissed because Newt only made generalized intent allegations — e.g., that defendants were “sophisticated companies.”
Finally, the Complaint was dismissed because Newt made only general allegations against all defendants, rather than particular allegations against each defendant.

Continue Reading False Patent Marking Requires Particular Allegations That Each Defendant Marked

Heathcote Holdings Corp. v. William K. Walthers, Inc. d/b/a Darda Toys, No. 09 C. 6722, Slip Op. (N.D. Ill. Mar. 11, 2011) (Bucklo, J.).
Judge Bucklo granted defendants summary judgment that it lacked the intent to deceive required by the false patent marking statute, 35 U.S.C. § 292. While an employee and her team were responsible for the information on the packaging, there was no evidence that the employee or her team were aware that the patents had expired, were (in one case) not the correct patent number or otherwise had any knowledge of the false marking statute. Indeed, plaintiff acknowledged that defendant “makes an effort to ensure that its packaging is truthful.” Furthermore, upon learning of plaintiff’s allegations, defendant created an “action plan” to resolve the issues. Defendant segregated the accused inventory, removed the patent information and held new production until its suppliers could change the markings. Based upon these facts, the Court held that no reasonable jury could find that the defendant had the required intent to deceive.
The Court went on to hold that the concepts of agency and collective corporate knowledge, or “collective scienter” were not applicable. The Seventh Circuit had specifically held that intent to deceive is not a corporate attribute.

Continue Reading Collective Scienter Does Not Apply to False Patent Marking

Simonian v. Edgecraft Corp., No. 10 C 1263, Slip Op. (N.D. Ill. Sep. 20, 2010) (Grady, Sen. J.).
Judge Grady granted defendant Edgecraft’s Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff Simonian’s false patent marking claims. The Federal Circuit’s recent decisions rejected two of Edgecraft’s three arguments. In Stauffer, the Federal Circuit held that any individual had standing to sue for false marking without regard to injury in fact. And in Solo Cup, the Federal Circuit held that marking with an expired patent could constitute false patent marking.
The Court, however, held that Fed. R. Civ. P. 9(b) heightened pleading standards applied to the intent to deceive requirement. Simonian’s “bare allegations” – and otherwise only “mere labels and conclusions” – at best suggested a “possibility of misconduct,” not intent. While Rule 9(b) does allow intent to be pled generally, the allegations must create a reasonable inference that defendant acted with the necessary intent.

Continue Reading False Patent Marking Plaintiff Must Meet Rule 9(b) Pleading for Intent

McNamara v. Natural Organics, Inc., No. 10 C 3544, Slip Op. (N.D. Ill. Sep. 1, 2010) (Shadur, Sen. J.).
Judge Shadur denied defendant’s motion to stay this false patent marking case pending the Federal Circuit’s standing decision in Stauffer (Stauffer has since been decided). The Court also dismissed plaintiff’s second amended complaint for failure to plead the requisite intent to deceive pursuant to Fed. R. Civ. P. 9(b) heightened pleading standards. Plaintiff attempted to plead intent upon information and belief using a nine-year-old statement made on defendant’s behalf about its skilled legal representative in an FTC proceeding. But that quoted language referred to a lawyer who was deceased, and he had passed away even before the FTC proceeding. Because plaintiff had already been given two chances to replead, the Court dismissed the case.

Continue Reading False Marking Case Dismissed With Prejudice for Failure to Plead Intent