Last week, in its opinion in Rembrandt Wireless Technologies, LP v. Samsung Electronics Co., Ltd., the Federal Circuit resolved one question about patent marking under 35 U.S.C. § 287 but left another open—whether the marking statute applies on a claim-by-claim or patent-by-patent basis. The case stemmed from a jury verdict in the Eastern District of Texas finding that Samsung infringed two patents asserted by Rembrandt (US Patent Nos. 8,023,580 and 8,457,228) and awarding Rembrandt $15.7 million in damages. Samsung appealed, raising several issues, including whether the district court properly denied Samsung’s motion to limit damages in light of Rembrandt’s alleged failure to mark articles embodying the ’580 patent.
The patent marking statute, 35 U.S.C. § 287, provides that “[p]atentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented” by marking the article in a method provided by the statute. The statute further provides that if a patentee does not mark, “no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice.”
In this case, Rembrandt had licensed the ’580 patent to Zhone Technologies, and the license agreement did not require Zhone to mark its products with the patent number. Samsung alleged that Zhone sold unmarked products embodying claim 40 of the ’580 patent, a claim which had originally been asserted against Samsung in the litigation. Based on the alleged lack of proper marking and, therefore, lack of constructive notice, Samsung sought to limit damages to those incurred after Samsung had actual notice of Rembrandt’s patents (which occurred when Rembrandt filed its complaint). In response, Rembrandt withdrew claim 40 of the ’580 patent from its allegations against Samsung and filed a statutory disclaimer with the PTO disclaiming claim 40.
The district court denied Samsung’s motion to bar pre-notice damages. The trial court reasoned that “a disclaimed patent claim is treated as if it never existed,” citing Genetics Inst., LLC v. Novartis Vaccines & Diagnostics, Inc., 655 F. 3d 1291 (Fed. Cir. 2011), and agreed with Rembrandt’s argument that a statutory disclaimer removed any prior obligation to mark products embodying the claim.
The Federal Circuit disagreed, explaining that Rembrandt’s position “effectively provides an end-run around the marking statute and is irreconcilable with the statute’s purpose.” According to the court, the “marking statute protects the public’s ability to exploit an unmarked product’s features without liability for damages until a patentee provides either constructive notice through marking or actual notice.” More specifically, citing Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1443 (Fed. Cir. 1998), the court detailed how “[t]he marking statute serves three related purposes: 1) helping to avoid innocent infringement; 2) encouraging patentees to give notice to the public that the article is patented; and 3) aiding the public to identify whether an article is patented.” The court explained that “while we have held that a disclaimer relinquishes the rights of the patent owner, we have never held that the patent owner’s disclaimer relinquishes the rights of the public.” Accordingly, the court concluded that a “disclaimer cannot serve to retroactively dissolve the § 287(a) marking requirement for a patentee to collect pre-notice damages.”
Despite this holding, the Federal Circuit did not conclude that Rembrandt’s pre-notice damages were barred. Instead it brought up an argument that Rembrandt had made to the district court, but did not raise on appeal. Rembrandt had argued to the district court that the marking statute should apply on a claim-by-claim basis, rather than a patent-by-patent basis and, therefore, it should be permitted to recover pre-notice damages for infringement of claims other than claim 40 of the ’580 patent. The Federal Circuit declared that “[t]he patent-by-patent versus claim-by-claim marking dispute between the parties raises a novel legal issue not squarely addressed by our past decisions.” Even though Rembrandt had not actually raised this argument on appeal, the Federal Circuit remanded the case “to the district court to address in the first instance whether the patent marking statute should attach on a patent-by-patent or claim-by-claim basis.”
We suspect that this will not be the last we see of the claim-by-claim versus patent-by-patent marking issue. Stay tuned.