Virginia District Court Upholds Constitutionality of False Marking Statute

    1 April 2009

    Judge Leonie M. Brinkema recently ruled that the federal False Marking Statute is not unconstitutional. The statute, 35 U.S.C. § 292, prohibits any person from falsely marking a product with a patent number, the word "patented" or any other word or number that suggests that the product is patented for the purpose of deceiving the public. The penalty is a fine of up to $500 for every offense. Significantly, under section 292(b), any person may sue for the penalty, in which event one-half shall go to the person suing and the other half to the United States.

    In Pequignot v. Solo Cup Co., 2009 U.S. Dist. Lexis 26020 (E.D. Va. Mar. 27, 2009), the plaintiff, Pequignot, a patent attorney, sued the defendant Solo Cup Company under section 292 for allegedly falsely marking several of its products with expired patent numbers and improperly marked other products with conditional patent markings. Solo moved to dismiss, arguing that Pequignot lacked standing to bring suit under Article III of the U.S. Constitution. It alternatively argued that if Pequignot was found to have standing to sue under § 292(b) as a qui tam relator, the suit would violate the constitutional separation of powers doctrine, specifically the Take Care clause of Article II, § 3. The United States intervened in the case to defend the constitutionality of the qui tam provision.

    The Court denied the motion to dismiss. The Court first held that Pequignot had standing to sue, even though he was not a competitor of Solo Cup or had any actual injury, because the statute provided that “any person” may sue as a qui tam relator. The Court went on to rule that the qui tam provision did not violate the separation of powers doctrine. The Court based its finding on the numerous cases that have held the qui tam provisions of the False Claims Act to be constitutional. In addition, delegation to a person not controlled by the Executive Branch to enforce the False Marking Statute in a civil suit does not raise serious Article II questions. Further, there is nothing to preclude the United States from either filing its own separate action to enforce section 292 or move to intervene in the qui tam action. The United States also could intervene and seek a protective order under Fed. R. Civ. P. 26(c) if the qui tam action was interfering with any government investigation or prosecution. Finally, the fact that the government intervened to support Pequignot’s case was “persuasive evidence” that no separation of powers principles were violated.

    While the Federal Circuit has considered appeals of cases brought under the False Marking Statute (such as Clontech Labs., Inc. v. Invitrogen Corp., 406 F.3d 1347 (Fed. Cir. 2005)), it has never expressly ruled on its constitutionality.

    Written by Richard J. Oparil