February 19, 2020
Licensee’s Failure to Mark Licensed Products Limits Patent Owner’s Recovery
In Arctic Cat inc. v. Bombardier Recreational Products Inc., [2019-1080] (February 19, 2020), the Federal Circuit affirmed the district court’s determination that the patent owner was not able to recover pre-suit damages for infringement of U.S. Patent Nos. 6,793,545 and 6,568,969 because the licensee did not mark covered products with the patent number.
On a previous appeal, the Federal Circuit held that once an alleged infringer identifies products that it believes are unmarked patented articles subject to the notice requirements of § 287, the patentee bears the burden of proving that the identified products do not practice the claimed invention.
On remand, Arctic Cat conceded that it could not show that the licensee’s products did not practice the asserted claims, but nonetheless moved for summary judgment that it is entitled to pre-suit damages because the damages limitations under §287 only apply while the patentee is actively making, using, and selling unmarked products, and not to the period when its licensee has ceased selling the accused products. Arctic Cat also argued that the jury’s finding of willful infringement is sufficient to demonstrate actual notice under § 287.
As to Arctic Cat’s first argument, the Federal Circuit held that the cessation of sales of unmarked products does not excuse noncompliance with the notice requirement of § 287 such that a patentee may recover damages for the period after sales of unmarked products ceased but before the filing of a suit for infringement.
The Federal Circuit noted that in American Medical Systems, 6 F.3d at 1537, it interpreted § 287 to allow a patentee who had sold unmarked products to begin recovering damages after the patentee began marking, so that a patentee who had sold unmarked products would have an incentive to begin marking, contrary to the objective of the statute. The Court said that where a party merely stops selling unmarked products but takes no action to remedy prior noncompliance or to provide notice that the articles were actually patented, it has not complied with the notice requirement of § 287 and cannot recover damages for any period prior to the filing of its complaint.
The Federal Circuit made quick work of Arctic Cat’s second argument — that the finding of willfulness dispensed with the need to show notice — pointing out that in Amsted Indus. Inc. v. Buckeye Steel Castings Co. it held that the determination whether a patentee provided actual notice under § 287 “must focus on the action of the patentee, not the knowledge or understanding of the infringer,” and that “[i]t is irrelevant … whether the defendant knew of the patent or knew of his own infringement.”
The Federal Circuit reiterated that willfulness, as an indication that an infringer knew of a patent and of its infringement, does not serve as actual notice as contemplated by § 287.
Patent marking, including by licensees, has been made considerably easier by the AIA, which permits “virtual” patent marking. Rather than let a licensee negotiate out a marking provision, patent owners should require their licensees to include a URL to patent information in order to protect subsequent damage claims against infringers.