Since late late year, more than 200 federal lawsuits alleging the “false marking” of patent numbers have been filed against a combined total of almost 250 defendants. While a qui tam
provision in the nation’s patent laws has always allowed citizen whistle-blowers to sue companies that deceive the public by marking products with false patent numbers—and to split any damages with the federal government—the U.S. Court of Appeals for the Federal Circuit made such suits much more attractive with its December 2009 decision in Forest Group Inc. v. Bon Tool Co.
. That ruling stated that a court can award a winning false-marking plaintiff damages of up to $500 per individual falsely marked product. So who exactly is behind all this litigation? An analysis of the suits filed since the Federal Circuit issued that decision shows that 107 defendant companies targeted amid the false-marking frenzy have been sued by small false-marking plaintiffs that appear to be controlled by lawyers, most of them with backgrounds in patents or other intellectual property matters. The onslaught of false-marking litigation hasn’t been well received in Congress. Bi-partisan bills pending in the House and the Senate would limit such suits to competitors that have actually been harmed by false marks. In both cases, the proposed legislation would limit those competitors to asking for damages “adequate to compensate for the injury.” Rep. Darrell Issa (R-CA), a co-sponsor one of the bills, said in a statement
that the suits were “abusive” and harmed consumers. “Our bill discourages deceptive patent marking while simultaneously moving to eliminate frivolous lawsuits,” said Issa, who has been active on patent issues in the past.
The spate of false marking suits—84 percent of which, according to the Docket Navigator service, are based on allegations related to expired patent numbers
—hasn’t been received well in all corners of the patent bar, either. Take Steve Sereboff of SoCal IP Law Group, for instance. Like most patent litigators, Sereboff works for patent owners who want to assert their patents as plaintiffs and who must also sometimes defend themselves against accusations of infringement. When it comes to false marking suits, Sereboff says he wouldn’t be comfortable on the plaintiffs’ side of the courtroom. “It just seems wrong to me” to bring false-marking lawsuits based on expired patents, says Sereboff, who is advising many of his clients on how to minimize the risk of being hit with such a suit. “The problem with these claims is that the false marking statute has an intent element,” he says, adding that an expired patent number is not good evidence that a patent holder wanted to deceive the public. “The false marking lawsuits I’ve read have been very speculative with regard to intent.” Sereboff argues that even a marketplace littered with expired patent numbers doesn’t hurt the public. In fact, he believes that expired patent numbers can even serve a positive, public-notice function adds. “It’s pretty easy to see if a patent is expired, and then a competitor or the general public knows that it’s okay to copy your product.” Even false-marking defendants with a solid argument that they have operated in good faith—and that they aren’t required to immediately remove expired patent numbers—could wind up facing hefty legal bills. And the prospect of those bills could result in quick settlements that favor the false-marking plaintiffs. Meanwhile, those bringing the false marking suits defend themselves by arguing that while they may make money for the plaintiffs, they’re also doing a public service by expunging expired patent marks from the marketplace. “The purpose of the false marking statute is to show that they [false markers] are taking advantage of a right that the government grants for a limited period of time, long after that right expired,” says Ken Good, an attorney at Kent, Good, Anderson & Bush who is currently litigating several cases on behalf of the newly-formed Patent Group LLC. “Now they’re just upset that they got caught at it.” (This is similar to the position taken by the Public Patent Foundation, which filed a pair of false-marking suits in early 2009—long before the current wave hit. PubPat, whose false marking campaign is led by an attorney who is also in the own patent enforcement business
, argues that false patent marks hinder competition and therefore hurt the public.) Good points out that two companies defending false marking suits brought by Patent Group—Copper-Brite, Inc., and P.F. Harris Manufacturing Company, LLC—have been marking—and marketing—their insecticides with patents that expired in the 1920s. “They say it’s on there because their patent number is in the one million range and they advertise it as one of the oldest patents in the industry,” says Good. Patent Group LLC, which has brought 20 false marking lawsuits in the Eastern District of Texas, is owned by Michael Collins, whom Good describes as a businessman who resides in Tyler, Texas. Daniel Fingerman, an attorney at Mount & Stoelker representing false-marking plaintiff San Francisco Technology Inc., says that his client isn’t just jumping on the Bon Tool
bandwagon. “We had been looking at this for some time, and we were preparing our complaint when the [ Bon Tool
decision] came out,” says Fingerman. San Francisco Technology, which is owned by Mount & Stoelker name partner Dan Mount, has sued 32 companies for false marking, ranging from Maybelline LLC, to Brita Filter and Delta Faucet Co., to Adobe Systems software products. (Those claims were originally filed as just two lawsuits in the Northern District of California, but one lawsuit was broken up into separate suits against each defendant company.) The number of defendants it has sued has made SF Technology stand out even in a field of heavy litigators. How it finds so many falsely marked products is the company’s secret sauce, says Fingerman. “That’s something that SF Technology is going to guard closely,” he says. “I can’t tell you how we find them, but we do have an effective method for finding products that are falsely marked. While SF Technology may be unusual in its success at finding falsely marked products, it’s not unusual in that the principal owner of the newly formed “marking enforcement” company is an IP attorney. A review of false marking lawsuits filed since the Bon Tool decision came down on Dec. 28, 2009 by The Prior Art shows that allegations against 107 defendant companies have been brought by lawyers or companies that appear to be controlled by lawyers. Below is a summary of false marking cases fitting that description. This research was based on the list of false marking lawsuits
maintained by the Docket Navigator service and published by Foley & Lardner attorney Justin Gray. ————————————– Matthew Pequignot (3 lawsuits, 1 since Bon Tool)
Matthew Pequignot is a patent attorney and a pioneer among false marking litigants: He sued the Solo Cup Co. alleging that it was falsely marking cup lids with U.S. Patent No. 4,589,569 in September 2007. Pequignot overcame Solo Cup’s motion to dismiss, but lost on summary judgment in 2009 when the district court found that Pequignot had not presented even “a scintilla of evidence” that Solo Cup had intended to harm the public with its expired patent marking. His appeal was heard by the Court of Appeals for the Federal Circuit in April and a decision is pending. Pequignot also sued Gillette Co. and parent company Procter & Gamble for false marking in 2008, but voluntarily dismissed the complaint a few months later without prejudice. More recently, Pequignot sued the Arrow Fastener company in New Jersey District Court in March, alleging its staplers bore a variety of expired patent markings. San Francisco Technology (2 lawsuits, 32 defendants)
San Francisco Technology is a Delaware corporation based in San Jose. The company is represented by attorneys from San Jose law firm Mount & Stoelker, and owned by Dan Mount, a name partner at that firm. SF Tech filed its first lawsuit on December 30, 2009, not long after the Federal Circuit issued its Bon Tool decision. That suit, which named 14 defendants, was broken into 14 separate lawsuits, three of which were transferred to different venues on April 13, and 11 of which have been stayed pending a decision in Stauffer
v. Brooks Bros.
, a false-marking case now pending at the Federal Circuit.
The second SF Tech lawsuit, filed on March 5 against 18 defendants, is pending in the Northern District of California. Perfection Product Management LLC (4 lawsuits)
Ohio corporate records show that Perfection Product Management LLC was created on February 26 by David Hrina, a patent attorney in the Akron office of Ohio law firm Buckingham, Doolittle & Burroughs. Together with a colleague from his law firm, Hrina filed four false marking suits the week after PPM was formed. One suit was filed on March 3, alleging that PowerLock tape measures produced by The Stanley Works feature expired patent numbers. PPM filed more lawsuits the next day. Those suits—against Allway Tools Inc., American Safety Razor Co., and Homer TLC, Inc.—involve expired patent numbers on various types of sanders and scrapers. People Protecting Patents (3 lawsuits) Patect LLC (7 lawsuits)
People Protecting Patents, LLC, is a Texas company that formed in March, and then changed its name to Patect, LLC the following month. The company’s only listed officer is Stephen Brochstein, an attorney at DeLange Hudspeth McConnell & Tibbets, a Houston law firm. In March, under the People Protecting Patents name, Brochstein sued United Parcel Service, Inc., Fujifilm Corp., and Clorox Corp., for marking various products with expired patent numbers. Then, acting as Patect LLC, Brochstein filed five false marking suits on April 26 and two more on May 6. In those suits, Brochstein alleges that products such as Fisher-Price’s Power Wheels child’s ATVs and discs made by Champion Discs for used in a golf-type game allegedly bore false patent markings. Brochstein is represented by an attorney with the same last name—Tyler Brochstein, a Dallas IP lawyer formerly with Sidley Austin LLP. O&G Searchquest (5 lawsuits)
O&G Searchquest is a Texas corporation, and its sole director is IP lawyer Martyn Hill, a name shareholder at the Houston firm Pagel Davis & Hill. Formed in 2008, O&G had no history of federal litigation until March. Since then, the company has filed five false marking suits. Hill is also the lawyer representing O&G in its lawsuits.
O&G has filed five false marking lawsuits, noting expired patent numbers on products made by Bausch & Lomb, Procter & Gamble, Merck, and McNeil-PPC. (Two of the cases were voluntarily dismissed without explanation. ) Patent Compliance Group (12 lawsuits)
Court records and Texas corporate documents indicate that the president and secretary of Patent Compliance Group is Dallas lawyer Michael Zweber
. Zweber has filed 12 false marking suits since February against a variety of companies over a variety of products, including Dyson Inc. (toasters and vacuums), International E-Z Up Inc. (a collapsible shelter), and Activision (the Guitar Hero and DJ Hero video games). (It’s worth noting that the claims against Activision are based on 10 patents, none of which are expired. Rather, Zweber notes that the games are marked with patents that seem to describe arcade and karaoke-type games, and argues that the newer Activision video games fall outside the scope of these patents and are thus falsely marked.) Promote Innovation LLC (8 lawsuits, 15 defendants)
Promote Innovation LLC is a Texas company that has filed lawsuits against several pharmaceutical companies, as well as against Little Kids, Inc., which allegedly stamped an expired patent number on its Big Bubble Bucket products for kids. While most false marking lawsuits name individual defendants, Promote Innovation’s first suit—filed on March 22—named against eight large electronics companies: Toshiba, Sony, Philips, Memorex, Lenovo, Imation, Audiovox, and Acer. Promote alleges that the companies stamp their DVD players with four Macrovision Corp. patents that were issued in the 1980s. State records indicate that Promote Innovation is owned by Houston attorney Zachariah Harrington. Harrington is representing his own company in court, and all of his lawsuits are filed in the Eastern District of Texas. Paul Luka (3 lawsuits)
Paul Luka is a Chicago attorney who filed three false marking suits in April and May: one against Revlon, noting an expired patent number marked on “Fabulash” mascaras; another against Procter & Gamble alleging a false marking on SureMax antiperspirant; and a third against Easy Gardner, Inc. for type of “fertilizer spike.” Luka is represented by another Chicago attorney, Jeffrey Friedman. Heathcote Holdings Corp. (9 lawsuits, 7 since Bon Tool)
Illinois corporate records indicate that Heathcote is owned by Paul Hletko, a Chicago patent attorney. Hletko has filed nine lawsuits, alleging false marking against Revlon’s Fabulash mascara, Arm & Hammer shower products, Brita water filters, Swiffer cloths, the “Leapster” learning game made by Leapfrog Enterprises, and a 3-D chalk-activity set made by Crayola. One of Hletko’s lawsuits, Heathcote Holdings Corp. Inc.
v. Church & Dwight Co. Inc.
, was filed in 2008 in East Texas. The others were all filed in October 2009 or later in federal court in Chicago. Two Heathcote lawsuits have been stayed pending the Pequignot and Stauffer cases; the others are pending. Hletko actually filed an amicus brief in the the Bon Tool case
. In that filing, he argued for the more expansive interpretation of the damage statute that the panel ultimately adopted. Heathcote Holdings Corp. is represented by Hinshaw & Culbertson, a 500-lawyer law firm headquartered in Chicago. FLFMC, LLC (7 lawsuits)
FLFMC, LLC was formed as a Pennsylvania company in January. State corporate records show the company is run out of the same Pittsburgh office suite as patent lawyer Debra Parrish
. FLFMC is represented in its false marking suits by a different Pittsburgh law firm, Meyer, Unkovic & Scott. The company has filed seven lawsuits, asking for damages connected to Frisbees made by Wham-O, peppermills made by William Bounds Ltd., Trimline Edgers sold by ACE Hardware, Etch-A-Sketch pads sold by Ohio Art Company, and the Jitterbug brand artificial bait made by EBSCO Industries. All seven FLFMC lawsuits are pending in federal court in Pennsylvania. Shizzle Pop, LLC (2 lawsuits)
Shizzle Pop is a California company formed in February by attorney Stephen Raucher. Racher also represents Shizzle Pop in its lawsuits against two toy companies over expired patent numbers, Wham-O (Frisbees) and Aviva Sports, Inc. (Cosmis Slide waterslide). Accord Patents LLC (GA): 7 lawsuits
Accord Patents’ seven lawsuits have all been filed by Steven R. Risley, an attorney at Sentry Law Group, an Atlanta-based IP law firm. State corporate records show that the sole officer of Accord Patents LLC is a Georgia attorney with the same last name, Jennifer Risley. Accord Patents filed its seven suits in February and March, all in the Northern District of Georgia. The accused products include a flying ring toy made by Aerobie Inc., a screw remover made by Alden Corporation, CD and DVD players made by Onkyo USA Corporation, and shoe inserts made by Superfeet Worldwide Inc. Notable Non-Attorney False Marking Plaintiffs Thomas A. Simonian (39 lawsuits)
Tom Simonian has sued more companies for false marking than any other plaintiff. Simonian, identified only as an individual residing in Geneva, Illinois, is represented by the Chicago law firm of Vanek, Vickers & Masini. Lead attorney Joseph Vanek declined to speak on the record about any of Simonian’s lawsuits when contacted by The Prior Art. When asked who Simonian was, he said simply, “I decline the interview,” and hung up. Illinois state bar records indicate that Simonian is not an attorney in that state. Simonian has sued 39 companies in separate lawsuits alleging false marking, and is represented in those suits by both Vanek, Vickers & Masini and the law office of Eugene M. Cummings. Lead attorney Joseph Vanek is experienced in patent enforcement has well, and has represented several small patent-holders in East Texas. Charles R. Baker (6 lawsuits)
Identified in court documents only as “a person residing in Lakeland, Tennessee,” Baker is not registered as an attorney in Tennessee. Baker has focused on litigation against drug and consumer product companies, and has sued Novartis, Bayer, GlaxoSmithKline, Bausch & Lomb, and Pfizer for featuring expired patents on various pharmaceutical products. He has also sued Procter & Gamble, alleging that it marked an expired patent number on Crest Tartar Control toothpaste. Bentley Hollander (8 lawsuits)
Bentley A. Hollander is a Philadelphia radiologist. He has filed eight lawsuits, mostly alleging false marking against medical and pharmaceutical products. Hollander defendants include MTD Products, Hospira, Timex Group USA, EUSA Pharma, Etymotic Research, Ranbaxy Laboratories, B. Braun Medical, Inc., and Ortho-McNeil-Janssen Pharmaceuticals. Hollander is represented by Philadelphia law firm Cozen O’Connor. More Resources