Possible New Approach to Negate Failure to Mark as a Limitation on Damages Under 35 U.S.C. § 287

By: N. Scott Pierce

In Rembrandt Wireless Tech. v. Samsung, 853 F.3d 1370 (Fed. Cir. 2017), the Court of Appeals for the Federal Circuit, on April 17, 2017, remanded to the district court a question of first instance: “whether the patent marking statute should attach on a patent-by-patent or claim-by-claim basis.”  The suit involves two patents, U.S. 8,023,580, and a continuation patent, U.S. 8,457,228, both of which are directed to communication among modems that would otherwise be incompatible.  Rembrandt Wireless Technologies (Rembrandt), the owner of the patents, sued Samsung Electronics Company, Ltd. and related companies (collectively “Samsung”) in United States District Court for Eastern District of Texas for infringement of the two patents.  Samsung, in its defense, relied in part on a failure by Rembrandt’s licensee, Zhone Technologies, Inc. (Zhone), to mark a product covered by a single asserted claim, claim 40 of the ‘580 patent.

Title 35 of the United States Code at section 287 (35 U.S.C. § 287) limits damages to the date of actual notice when a patented article is made, offered for sale, or sold within the United States “for or under” a patentee (such as by a licensee, as was Zhone in this case) without the article bearing an appropriate mark of patent protection.  Following Samsung’s attempt to limit damages consequent to Zhone’s sale of unmarked products, Rembrandt retracted its allegation of infringement under claim 40 and filed a statutory disclaimer of this claim in the United States Patent and Trademark Office (Patent Office) in order to avoid forfeiture of damages pursuant to § 287.

The district court negated the issue of failure to mark under 35 U.S.C. § 287 on the premise that, pursuant to “Federal Circuit precedent, a disclaimed patent claim is treated as if it never existed.”  On appeal, the Federal Circuit vacated this portion of the district court’s decision, characterizing Rembrandt’s tactic as “an end run around the marking statute” that “is irreconcilable with the statute's purpose” of public notice.  The retroactive effect of disclaimer, for the court, does not apply where the “rights of the public” are relinquished as a result.  Examples of such rights cited by the court included an infringer’s inequitable conduct defense, misuse counterclaims, and jurisdiction over interference proceedings.

Rembrandt also presented what the Federal Circuit viewed to be a “novel legal issue,” that compliance with the statutory marking requirement should be applied only on a claim-by-claim basis, and not a patent-by-patent basis.  Doing so would obviate any need to rely on a retroactive disclaimer of a claim “as if it never existed” and the competing attendant rights of the patentee and public.  Under Rembrandt’s theory, recovery of pre-notice damages resulting from infringement of the remaining asserted claims would be enabled without disclaimer since there had been no failure to mark products covered by those claims.  The Federal Circuit remanded this issue to the district court to address this issue “in the first instance.”

Although United States patents are limited to a single “invention,” it is, nevertheless, possible for articles marked with a single patent number to be covered by one or more claims of that patent, but not to be covered by at least one other article claim of that same patent.  If the marking provision of § 287 is to be applied on a patent-by-patent basis rather than a claim-by-claim basis, failure to mark a species of products covered by one set of claims may preclude recovery for infringement of another species covered by a different set of claims. 

A parallel can be drawn with judicial precedent holding that patented processes are not subject to marking under § 287.  More specifically, if a patent issues with only process claims, enforceability of that patent is not affected by unmarked articles made, used, or sold by the patentee.  If, on the other hand, the patentee includes claims within that same patent that are directed to an unmarked article, application of the statutory marking requirement on a patent-by-patent basis bars collection of damages for infringement of any process claim only when the patentee also asserts claims covering those articles (Devices for Medicine v. Boehl, 822 F.2d 1062 (Fed. Cir. 1987); Crown Packaging Tech. v. Rexam Beverage Can, 559 F.3d 1308 (Fed. Cir. 2009)).  The same consequences do not follow, however, if those same process claims were issued in a separate patent (State Contracting v. Condotte America, 346 F.3d 1057 (Fed. Cir. 2003)).  By substituting article claims for process claims in this parallel, the marking provision of § 287 would affect asserted article claims that were properly marked or for which no marking was required only if the patent also included asserted claims that covered articles not marked as required.  If the district court were to apply § 287 on a claim-by-claim basis, then the penalty for failure to mark would limit damages only to the extent claims that covered unmarked articles were asserted; asserted claims that did not cover unmarked articles would not be affected.   Also, the “rights of the public” that might disappear under disclaimer, and which was a concern of the Federal Circuit, would also be unaffected.

Patent applicants should be careful to follow the decision of the district court on remand.  If the notice function is to apply on a claim-by-claim basis, as suggested by Rembrandt, then strategic options for enforcement of claimed subject matter could be expanded. 

The opinions expressed herein are solely those of the respective author or authors, and do not necessarily represent those of Hamilton Brook Smith Reynolds, or any client or organization.

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By: N. Scott Pierce

In Rembrandt Wireless Tech. v. Samsung, 853 F.3d 1370 (Fed. Cir. 2017), the Court of Appeals for the Federal Circuit, on April 17, 2017, remanded to the district court a question of first instance: “whether the patent marking statute should attach on a patent-by-patent or claim-by-claim basis.”  The suit involves two patents, U.S. 8,023,580, and a continuation patent, U.S. 8,457,228, both of which are directed to communication among modems that would otherwise be incompatible.  Rembrandt Wireless Technologies (Rembrandt), the owner of the patents, sued Samsung Electronics Company, Ltd. and related companies (collectively “Samsung”) in United States District Court for Eastern District of Texas for infringement of the two patents.  Samsung, in its defense, relied in part on a failure by Rembrandt’s licensee, Zhone Technologies, Inc. (Zhone), to mark a product covered by a single asserted claim, claim 40 of the ‘580 patent.

Title 35 of the United States Code at section 287 (35 U.S.C. § 287) limits damages to the date of actual notice when a patented article is made, offered for sale, or sold within the United States “for or under” a patentee (such as by a licensee, as was Zhone in this case) without the article bearing an appropriate mark of patent protection.  Following Samsung’s attempt to limit damages consequent to Zhone’s sale of unmarked products, Rembrandt retracted its allegation of infringement under claim 40 and filed a statutory disclaimer of this claim in the United States Patent and Trademark Office (Patent Office) in order to avoid forfeiture of damages pursuant to § 287.

The district court negated the issue of failure to mark under 35 U.S.C. § 287 on the premise that, pursuant to “Federal Circuit precedent, a disclaimed patent claim is treated as if it never existed.”  On appeal, the Federal Circuit vacated this portion of the district court’s decision, characterizing Rembrandt’s tactic as “an end run around the marking statute” that “is irreconcilable with the statute's purpose” of public notice.  The retroactive effect of disclaimer, for the court, does not apply where the “rights of the public” are relinquished as a result.  Examples of such rights cited by the court included an infringer’s inequitable conduct defense, misuse counterclaims, and jurisdiction over interference proceedings.

Rembrandt also presented what the Federal Circuit viewed to be a “novel legal issue,” that compliance with the statutory marking requirement should be applied only on a claim-by-claim basis, and not a patent-by-patent basis.  Doing so would obviate any need to rely on a retroactive disclaimer of a claim “as if it never existed” and the competing attendant rights of the patentee and public.  Under Rembrandt’s theory, recovery of pre-notice damages resulting from infringement of the remaining asserted claims would be enabled without disclaimer since there had been no failure to mark products covered by those claims.  The Federal Circuit remanded this issue to the district court to address this issue “in the first instance.”

Although United States patents are limited to a single “invention,” it is, nevertheless, possible for articles marked with a single patent number to be covered by one or more claims of that patent, but not to be covered by at least one other article claim of that same patent.  If the marking provision of § 287 is to be applied on a patent-by-patent basis rather than a claim-by-claim basis, failure to mark a species of products covered by one set of claims may preclude recovery for infringement of another species covered by a different set of claims. 

A parallel can be drawn with judicial precedent holding that patented processes are not subject to marking under § 287.  More specifically, if a patent issues with only process claims, enforceability of that patent is not affected by unmarked articles made, used, or sold by the patentee.  If, on the other hand, the patentee includes claims within that same patent that are directed to an unmarked article, application of the statutory marking requirement on a patent-by-patent basis bars collection of damages for infringement of any process claim only when the patentee also asserts claims covering those articles (Devices for Medicine v. Boehl, 822 F.2d 1062 (Fed. Cir. 1987); Crown Packaging Tech. v. Rexam Beverage Can, 559 F.3d 1308 (Fed. Cir. 2009)).  The same consequences do not follow, however, if those same process claims were issued in a separate patent (State Contracting v. Condotte America, 346 F.3d 1057 (Fed. Cir. 2003)).  By substituting article claims for process claims in this parallel, the marking provision of § 287 would affect asserted article claims that were properly marked or for which no marking was required only if the patent also included asserted claims that covered articles not marked as required.  If the district court were to apply § 287 on a claim-by-claim basis, then the penalty for failure to mark would limit damages only to the extent claims that covered unmarked articles were asserted; asserted claims that did not cover unmarked articles would not be affected.   Also, the “rights of the public” that might disappear under disclaimer, and which was a concern of the Federal Circuit, would also be unaffected.

Patent applicants should be careful to follow the decision of the district court on remand.  If the notice function is to apply on a claim-by-claim basis, as suggested by Rembrandt, then strategic options for enforcement of claimed subject matter could be expanded. 

The opinions expressed herein are solely those of the respective author or authors, and do not necessarily represent those of Hamilton Brook Smith Reynolds, or any client or organization.

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