False Marking

Refers to marking a product or service with a claim to an intellectual property right that does not exist (because of expiration, error, sale of the right or an overbroad construction of a patent.) Most intellectual property laws have a penalty for such false marking, typically a fine or damages.

Prior to the America Invents Act the US patent act had a false marking statute which provided that marking a product with a patent that did not apply to it could result in a penalty of $500 per item sold. As a result a type of patent troll activity developed where in qui tam actions purporting to be acting on behalf of the general public, plaintiffs sought to collect statutory damages of up to $500 per unit sold of products that were often mistakenly sold while marked with numbers of expired patents or patents that did not cover the products. In practice, most cases settled with the defendant making a nuisance value payment to the plaintiff.

Term posted by Origin on in