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Recap: Bill Ragland Discusses “Intellectual Property Marking: Benefits, Costs and Litigation” with the ACC’s Georgia Chapter

July 1, 2011

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The Georgia Chapter of the Association of Corporate Counsel hosted a lunch program for in-house counsel entitled “Intellectual Property Marking: Benefits, Costs and Litigation.” The event, which took place June 14, 2011, was sponsored by Womble Carlyle Sandridge & Rice, PLLC.  Womble Carlyle’s Bill Ragland gave an intriguing presentation. Ragland, a prominent intellectual property litigator based in Womble Carlyle’s Atlanta office, has been named as one of the top 250 IP strategists in the world by Intellectual Asset Magazine (IAM).
 
Ragland first explained in-depth the proliferation of false patent marking cases in the last 18 months.  The legal basis for these lawsuits is an obscure, 140-year-old statute. The law effectively deputizes any member of the general public to enforce and seek damages for products incorrectly marked with patent information, if the mismarking was “for the purpose of deceiving the public.”  The statute sets the fine at $500 per mismarking “offense.”  A December 2009 U.S. Court of Appeals ruling, Forest Group, Inc. v. Bon Tool Co., clarified that each mismarked article constitutes a separate offense.  The ruling spurred a cottage industry of opportunistic false marking plaintiffs.
 
The most common targets are:
 
  • Products with expired patent numbers (most 4 million series patents have expired);
  • Mass produced or high visibility consumer goods;
  • Pharmaceuticals or other goods with labels accessible online;
  • Financial institutions with software and business process patent numbers displayed on Web sites and credit, debit and gift cards.
 
More than 700 false patent marking cases have been filed recently.  Approximately 300 of those have been settled at an average of about $50,000 per case. Relief for defendants may be on the way. In the BP Lubricants decision, the Federal Circuit Court of Appeals recently held that in order to state a viable claim, a plaintiff’s complaint must provide greater details regarding a defendant’s intent to deceive the public. Congress is also considering legislation that would limit false patent marking claims to those brought by competitors rather than any member of the public.
 
Ragland discussed patent marking audits and monitoring systems, and provided attendees with a sample “audit check list.” Ragland also discussed marking issues involving other types of intellectual property, such as trade secrets and confidential information, trademarks and copyrights.
 
U.S. companies lose an estimated $300 billion annually in misappropriation of trade secret and proprietary information. The vast majority of that comes at the hands of employees or business partners. Properly marking intellectual property can be essential to preserving both the status of information as a trade secret and the ability to enforce non-disclosure agreements with third parties.
 
Likewise, proper marking of trademarks and copyrights strengthens the owner’s position in infringement disputes. Use of a ® symbol may only be used if there is federal registration of the mark. “TM” and “SM” may be used to signify common law trademark rights.
 
Any ACC-Georgia member who would like a copy of the presentation materials should contact Kay Newman at knewman@wcsr.com or 404-888-7497.
 
Please contact Joe Freeman (404-843-7682; Joe.freeman@cox.com) if you are interested in participating in or sponsoring a future ACC-Georgia program.