(CN) – The Federal Circuit ruled that a manufacturer of disposable cups, bowls, plates and utensils did not intend to deceive customers when it failed to change the patent markings on its products after the patents expired.
The appellate panel in Washington, D.C., affirmed a district court’s dismissal of what could have been a trillion-dollar lawsuit brought against the Solo Cup Co. by patent lawyer Matthew Pequignot.
Federal law calls for a fine of $500 for every offense when a company marks an unpatented article for the purpose of deceiving the public. In this case, Pequignot accused Solo of falsely marking “at least” 21 billion items, which would have resulted in a $5.4 trillion award for the U.S. Such an amount, according to Judge Alan Lourie, “would be sufficient to pay back 42 percent of the country’s total national debt.”
The three-judge appellate panel found that Solo had not intended to deceive the public and had neglected to change the patent markings on its products for logistical and financial reasons alone.
The company’s thermoforming stamping machines contain mold cavities that stamp each product with a patent number. The cavities are expensive to replace, and generally last 15 to 20 years, according to the ruling.
After some of its patents expired, Solo developed a policy to change the expired patent markings whenever a mold cavity needed to be replaced or repaired.
Pequignot sued the company in 2007, alleging that Solo had falsely marked its products in order to deceive its customers.
The district court found for Solo, determining that it had no intent to deceive and had not violated the law.
Pequignot appealed, but the Federal Circuit ruled for the manufacturer.
The appellate panel agreed with the attorney that the items were falsely marked, and that Solo had knowingly marked its products with expired patent numbers. However, the false marking statute requires that the marker act “for the purpose of deceiving the public,” and that Solo did not do, according to Lourie.
“Mere knowledge that a marking is false is insufficient to prove intent if Solo can prove that it did not consciously desire the result that the public be deceived,” the judge wrote. “Rather than continuing to manufacture mold cavities with the expired patent markings, Solo took the good faith step of replacing worn out molds with unmarked molds. Solo’s leaving the expired patent numbers on its products after the patents had expired, even knowingly, does not show a ‘purpose of deceiving the public.'”
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