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Monday, May 24, 2010
Law - "Outdated patents are new company liability: Court opens the door for lawsuits that threaten to yield big fines for companies"
An interesting article yesterday in the Indianapolis Star business section reported by Bruce C. Smith. Some quotes:
Those tiny patent numbers printed on everything from plastic cup lids to kitchen faucets increasingly are turning into big headaches for Carmel-based Delta Faucet and hundreds of other companies across the country.The companies have been sued by private whistleblowers or lawyers for allegedly using outdated or bogus patent numbers on their products or in their advertisements, potentially subjecting them to millions of dollars in fines.
The floodgates for "false marking" lawsuits opened in December when a federal appeals court substantially expanded the potential fines for bogus patents. Since that time, nearly 200 such lawsuits have been filed in federal courts against more than 100 companies. Only 40 false marking suits were filed in the previous five years.
Lawyers for some of the targeted companies argue that the change has spawned a cadre of fine-seekers prowling the aisles of retail stores in search of bad patent numbers, and they note that large fines could drive up the cost of consumer goods.
According to federal law, whistleblowers are entitled to half the fines, while the government gets the rest. And any private citizen can file such a lawsuit, regardless of whether they've suffered any injury.
Attorneys filing the lawsuits say enhanced fines are necessary to deter companies from using bogus patent numbers to discourage competitors from launching similar yet better products and from misleading customers into thinking the products are unique.
Posted by Marcia Oddi on May 24, 2010 08:41 AM
Posted to General Law Related