When it comes to selling and promoting a product, the law recognizes that a certain amount of puffery is acceptable. So how far can you go? Is it permissible to label a product “patent pending” if no patent application has been filed?
Slapping a patent pending label on a package sounds like a pretty nifty way to scare off the competition. Legally, such labeling is considered to be adequate and constructive notice to would be infringers that the goods are protected intellectual property. Notice is important because it entitles the patentee to recover damages from infringers. No notice, no damages. As a result the practice of labeling goods as “patent pending” has become popular in the software industry, an industry that aggressively enforces its intellectual property rights against counterfeiters.
But, aggressive marketers beware. Two recent U.S. District Court cases (Pequignot v. Solo Cup Co. and Pequignot v. Gillette) warn that this popular labeling practice could turn into a huge liability if the information is false.
False marking is the act of deceiving the public by labeling goods in a way that suggests there is patent protection when in reality no such intellectual property rights exist. Examples of false marking include identifying the goods as “patent pending” when no patent was ever applied for, using a patent number that doesn’t exist, using an expired patent number, using a patent number that applies to a different product, and even using broad language such as “this product may be covered by a patent.” False marking fines can be up to $500 per offense. That can add up fast with a product like software because each copy of the software is a separate violation.
To avoid unnecessary costs, smart marketing strategies include periodic packaging reviews that examine the accuracy of all packaging claims. Truthful representations are essential. Patent references must be authentic. The patent numbers should be valid and unexpired and the patents on the label should correspond to the goods, not something unrelated.
Legal packaging reviews should also document what you’re including or excluding and how you reached those conclusions. If your paper trail shows that there is no evidence of any intent to deceive the public, you will have a powerful piece of evidence to help defend against any false marking claims.
By planning ahead and engaging in a bit of defensive thinking you can avoid patent pending pitfalls and protect your competitive position in the marketplace.