Renzulli Law Firm has obtained a complete dismissal with prejudice of an alleged false patent marking lawsuit against an industry-leading product manufacturer in the U.S. District Court for the Eastern District of Texas. In 2010, the plaintiff filed a lawsuit alleging that the manufacturer had violated the federal false marking statute, 35 U.S.C. § 292(a), by marking products with expired patent numbers.
This lawsuit was one of hundreds of alleged false markings cases filed by several plaintiffs against numerous corporate defendants. In September 2010, leading intellectual property on-line magazine IP Frontline featured Renzulli Law Firm’s article, Sellers Beware: New Breed of Aggressive Plaintiffs Hunt Expired Patent Numbers; Demand Billions, which emphasized the explosive growth of false markings cases following several decisions by the Court of Appeals for the Federal Circuit. In one such case, Stauffer v. Brooks Bros., Inc., the Federal Circuit held that an individual, regardless of whether he or she suffered an injury, is free to file a case against any entity using expired patent numbers under the false marking statute. Consequently, following the deluge of false markings cases across the country, and in the Eastern District of Texas in particular, false markings cases drew widespread media, public and political scrutiny and criticism. The America Invents Act, which was recently enacted, substantially limits the ability of plaintiffs to file false marking cases without showing competitive injury.
Renzulli Law Firm led a vigorous defense on behalf of the manufacturer. Following the Federal Circuit’s decision in In re BP Lubricants USA, Inc., 637 F.3d 1308 (Fed. Cir. 2011), the manufacturer moved to dismiss the plaintiff’s complaint because it failed to satisfy the heightened pleading requirements for fraud under Federal Rule of Civil Procedure 9(b). The District Court subsequently ordered the plaintiff to file a complaint that satisfied Rule 9(b). The plaintiff then amended its complaint twice and the manufacturer again moved to dismiss the complaint for failure to satisfy Rule 9(b).
On August 26, 2011, the District Court granted the motion to dismiss. In the Memorandum Opinion and Order, the District Court reiterated and agreed with the points and authorities raised by Renzulli Law Firm on behalf of the manufacturer in the motion to dismiss. The District Court held that the plaintiff failed “to allege particularized facts that support a reasonable inference that [the manufacturer] marked the accused products with the requisite intent” required by Rule 9(b). The plaintiff had set forth only “generalized” or “conclusory” allegations that the manufacturer was a “sophisticated company” and had failed to set forth allegations establishing intent under the false marking statute.
The District Court also granted the manufacturer’s request that the amended complaint be dismissed with prejudice. As argued by Renzulli Law Firm, the District Court specifically recognized that the plaintiff had been given ample opportunity to amend its complaint to comply with Rule 9(b) and BP Lubricants. The Court was “unconvinced that allowing [plaintiff] another opportunity to amend its pleadings would cure its complaint’s deficiencies.” Accordingly, the complaint was dismissed with prejudice. For more information, please contact John F. Renzulli.