Qui Tam False Marking Patent Cases Increase

The past few months have seen a dramatic increase in Qui Tam cases based on the false-marking section of the Patent Act. This section of the Act allows for whistleblowers to bring a company to court for falsely marking products as being patented or patent ending. If the company is found guilty of falsely claiming patent, the whistleblower and government receive compensation, as outlined in the Patent Act.

A recent case, Forest Group, Inc. v. Bon Tool Co. interprets the false-marking section as incurring a fine of $500 for every printed instance of false patent claim. Previous cases had interpreted the section to mean that a $500 fine should be incurred for every intention of falsely marking a product. The older interpretation was less harsh on manufacturers, whereas the newer interpretation in the Forest case offers hefty incentives for whistleblowers to turn in companies they have found to be fraudulently marking products.

The $500 fee is not automatic nor required. District courts are allowed to strike a balance in cases where mass-produced smaller items have been marked. For low-cost items, an $500 fine per item might be too steep and disproportionate to the benefits garnered by the company that fraudulently marked the product. Still, the potential of up to $500 in fines per item is enough to discourage companies from fraudulently marking future product and is more than enough to cause a substantial and steady increase in Qui Tam cases by whistle blowers who are ready to hold companies accountable for their patent law violations under the new interpretation of the Patent Act.

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