Patent licensors typically require their licensees to mark licensed products with the numbers of the licensed patents. By requiring the licensees to mark products, should the patent holders need to enforce their patents against infringers, the patent holders will be able to maximize their ability to recover profits. But what if, after the agreement has been signed, a number of the products have been marked, and a licensee has paid royalties for a period of time, the licensee comes to believe that its products are not within the scope of the patent claims? Having represented to the world that the products were covered by a patent, should the licensee be able to cease paying royalties on the products?
A number of courts have taken the position that by placing a patent number on a product, a manufacturer who has paid royalties is estopped from denying that its product embodies the patent for purposes of liability for both patent infringement damages and patent license royalties. However, despite being the court with appellate jurisdiction over all matters arising out of the patent laws, the U.S. Court of Appeals for the Federal Circuit had not until March 15 of this year ever directly confronted the issue. In Frolow v. Wilson,1 the Federal Circuit declined to endorse the doctrine of patent marking estoppel, which is in direct conflict with the U.S. Court of Appeals for the Second Circuit, and is an invitation for review by the Supreme Court.
