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Mark It or Lose It: The Federal Circuit Clarifies Section 287’s Marking Requirement for Infringement Damages

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Introduction

On February 19, 2020, the Federal Circuit decided Arctic Cat Inc. v. Bombardier Recreational Products Inc.1 (hereinafter “Arctic Cat II”), and clarified that a patentee, in this case Arctic Cat, cannot recover damages during the period before it provided actual notice to the alleged infringer, Bombardier.  Neither Arctic Cat’s non-practicing its patents in its own products nor its licensee Honda’s cessation of sales of unmarked patented products excused Arctic Cat’s noncompliance with the notice requirement under Section 287 of the Patent Act.  The decision also explained that an alleged infringer’s willful infringement does not establish actual notice for a patentee to recover damages under Section 287. 

The decision adds more clarity to the Circuit’s previous decision in Arctic Cat Inc. v. Bombardier Recreational Products Inc.2 (hereinafter “Arctic Cat I”) in 2017.  In Arctic Cat I, the Federal Circuit confirmed that 35 U.S.C. § 287 requires that a patentee who makes or sells a patented article must mark the articles or notify the alleged infringer to recover damages.  The court further held that, for purpose of calculating when the patentee can recover damages, the alleged infringer must first identify any unmarked products before the burden shifts to the patentee to establish the identified products do not practice the patent.  If the patentee cannot establish that, damages cannot be recovered until the alleged infringer is given actual notice of the infringement.

Statutory Marking and Notice Requirements

     Section 287 of the Patent Act mandates the marking and notice requirements.3  It provides:

Patentees, 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, either by fixing thereon the word “patent” or the abbreviation “pat.”, together with the number of the patent . . . In the event of failure so to 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.  Filing of an action for infringement shall constitute such notice.4

The requirements do not apply to patents directed to processes or methods, nor do they apply when a patentee never makes or sells a patented article.5  If a patentee makes or sells a patented article and fails to mark pursuant to § 287, the patentee cannot collect damages until she provides actual notice to the alleged infringer and only for the period after notification.6

Arctic Cat I

Arctic Cat Inc. (“Arctic Cat”) sued Bombardier Recreational Products Inc. (“Bombardier”) for patent infringement, alleging Bombardier infringed two of Arctic Cat’s patents.  Apart from non-infringement and invalidity defenses, Bombardier argued that Arctic Cat failed to mark patented products, so any damages calculation should not start until Bombardier received actual notice.7  At trial, the jury found both patents infringed and not invalid, awarded a royalty to Arctic Cat, and found Bombardier’s infringement to be willful.8  The main issues in Arctic Cat I were which party bears the burden to identify the allegedly unmarked products and which party bears the burden to prove the alleged unmarked products practice the asserted patent.9

Arctic Cat had itself stopped selling products practicing the patents before either patent was issued.10  In 2002, Arctic Cat entered into a license agreement with Honda, wherein the initial draft included a provision requiring Honda to mark all licensed products, but in the final version the agreement expressly stated that Honda had no marking obligations.11  Bombardier alleged that Arctic Cat’s licensee, Honda, continued to sell unmarked products practicing the patents until 2009, and that Arctic Cat made no effort to ensure Honda marked the products.12

As an initial matter, the Federal Circuit reiterated that a patentee always bears the burden of pleading and proving she complied with § 287(a)’s marking requirement.13  Furthermore, a patentee’s licensees must also comply with the marking requirement, and courts consider “whether the patentee made reasonable efforts to ensure compliance with the marking requirements.”14

Second, the Federal Circuit resolved the split among district courts regarding which party must initially identify the unmarked products.  It held that the alleged infringer who challenges the patentee’s compliance with § 287 bears the initial burden to articulate the products it believes are unmarked.15  According to the Federal Circuit, imposing this burden on the alleged infringer would avoid “a large scale fishing expedition and gamesmanship” by the patent challenger.16  However, the burden of production presents a “low bar,” and the alleged infringer does not need to produce claim charts.17  Although the court did not set a threshold, it considered that (1) Bombardier introduced Honda’s license to practice the two patents, (2) Honda continued to sell the products until 2009, and (3) Bombardier’s expert testified that he reviewed the product information and believed Honda’s products practiced the patents, and concluded that Bombardier met its burden.18

Third, after the alleged infringer plausibly identifies the unmarked products, the burden shifts to the patentee to prove the products do not practice the patent-at-issue.19  The court chose the burden-shifting approach because the patentee is in a better position to know whether her products practice the patent.20  In this case, because Arctic Cat failed to establish Honda’s products did not practice its patents, the court remanded the case.

Arctic Cat II

While Arctic Cat I provided a good framework for analyzing a failure-to-mark defense, questions remained.  The first question Arctic Cat II addressed is whether the damages limitation of § 287 applies only while  a patentee is actively making, using, or selling unmarked products.21  The court also addressed whether the cessation of sales of unmarked products excuses noncompliance with the notice requirement of § 287.22  Additionally, the court provided a ruling on whether Bombardier’s willful infringement establishes actual notice under § 287.23

As an initial matter, the Federal Circuit held that although § 287 describes the conduct of the patentee in the present tense, the consequence of a failure to mark is not “so temporarily limited.”24  The statute prohibits a patentee from receiving any damages after a failure to mark, rather than merely a reduced amount of damages in proportion to the amount of time the patentee was actually practicing the asserted patent.25  However, a patentee or its licensee who is selling unmarked products can become compliant on a going-forward basis by beginning to mark its products in accordance with § 287, and thus begin recovering damages.26

Second, the Federal Circuit held that the notice requirement of § 287 cannot be “switched on and off” as the patentee or licensee starts and stops making or selling its products, because some unmarked products may remain on the market creating confusion.27  Section 287 mandates that once a patentee or its licensee begins making or selling a patented article, actual or constructive notice must be provided.28  A patentee can provide actual notice to the alleged infringer by “affirmative communication of a specific charge of infringement by a specific accused product or device.”29  Alternatively, the patentee can provide constructive notice by marking her products.30

Finally, the Federal Circuit held that the infringer’s willful infringement does not cure the patentee’s noncompliance.31  Arctic Cat argued that because the jury found Bombardier willfully infringed its patents, and therefore was found to have had knowledge of the infringement, that knowledge was sufficient to establish actual notice under § 287.32  However, the court held that whether a patentee provided actual notice under § 287 “must focus on the action of the patentee, not the knowledge or understanding of the infringer,” so Bombardier’s knowledge is irrelevant.33

Conclusion

After two episodes of Arctic Cat, the major takeaway is that, for a patentee who makes or sells a patented article, she should mark the products pursuant to § 287 as soon as the patent is issued to be able to recover infringement damages for the full period of an alleged infringement.  If the patent is licensed to third parties, she should either delegate the duty in the license agreement or make reasonable efforts to ensure the third parties’ compliance.  If unmarked products are discovered, noncompliance can be cured going forward by marking them.  Otherwise, in most cases, a court will only grant damages from the date when actual notice is provided to the alleged infringer, potentially negating all pre-complaint damages, regardless of an infringer’s actual knowledge.


1 950 F.3d 860 (Fed. Cir. 2020).

2 876 F.3d 1350 (Fed. Cir. 2017).

3 See 35 U.S.C. § 287(a) (2018); Dunlap v. Schofield, 152 U.S. 244, 248 (1894).

4 35 U.S.C. § 287(a).

5 See Wine Ry. Appliance Co. v. Enter. Ry. Equip. Co., 297 U.S. 387, 395, 398 (1936).

6 See Am. Med. Sys., Inc. v. Med. Eng’g Corp., 6 F.3d 1523, 1537 (Fed. Cir. 1993).

7 See 876 F.3d at 1356.

8 See id. at 1358.

9 See id. at 1367.

10 See 950 F.3d at 862.

11 See id.

12 See 876 F.3d at 1366.

13 See id. (citing Maxwell v. J. Baker, Inc., 86 F.3d 1098, 1111–12 (Fed. Cir. 1996)).

14 See 876 F.3d at 1366 (quoting Maxwell, 86 F.3d at 1111–12).

15 See 876 F.3d at 1368.

16 Id.

17 See id. at 1368–69.

18 See id. at 1368.

19 See id. at 1369.

20 See id. at 1368.

21 See 950 F.3d at 863.

22 See id.

23 See id.

24 Id. at 865.

25 See id.

26 See id. at 864.

27 Id. at 865.

28 See id.

29 Id. at 864 (quoting Amsted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 187 (Fed. Cir. 1994)).

30 See id. at 864. 

31 See id. at 866.

32 See id.

33 Id. (quoting Amsted, 24 F.3d at 187).

 

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